Sparkling Breweries Limited and 5 Others v. Union Bank of Nigeria Ltd. (UBN) (SC 113/1996, 13 July 2001)


Sparkling Breweries Limited and 5 Others v. Union Bank of Nigeria Ltd. (UBN) (SC 113/1996, 13 July 2001)

by Branham Chima.

Unlawful interference with business.

In summary, the appellants’ case is that sometime in March 1986, the third to sixth appellants applied to the respondent for irrevocable letters of credit for the importation of hops and other raw materials for the use of the first and second appellants. As a result of this, the respondent set out certain conditions (see Exhibit 2) for the appellants to meet before the letters of credit were established. The appellants substantially complied with Exhibit 2 except conditions 2, 3 and 8 which they by Exhibit 3 asked the respondent to waive. The appellants stated that they entered into a further contract whereby the import licences of the third to sixth appellants were to be utilised for the benefit of the first and second appellants for the production of beer and soft drinks. According to the appellants the profit accruing from this arrangement would be shared 15 percent to the holders of the import licences and the rest to defray the outstanding loan of the first and second appellants. The appellants contended that the respondent eventually waived the remaining conditions, registered their Form M and processed the letters of credit which it later cancelled without any reference to them. The appellants tendered Exhibits 10, 10(a) and 10(b) as copies of the established letters of credit which the Chairman/Managing Director of the appellants took with him when he travelled overseas and used in inducing their trade creditors as to payment to them and thus enabled him to secure from the creditors some quantities of hops. It is appellants’ further case that when they learnt of the cancellation of the letters of credit they made several appeals to the respondent to reconsider the position and warned it of the attendant damages the cancellation would cost them. When the respondent would not yield, they instituted the action leading to this appeal.

The respondent, on the other hand, contended that the appellants failed to comply with all the conditions set out in Exhibit 2. The respondent further contended that if the facts were as claimed by the appellants, the right to sue did not lie in them but in their trade creditors. It finally contended that Exhibits 10, 10(a) and 10(b), that is the alleged letters of credit, were mere forms as they did not contain such details as the name of the corresponding bank that would transform the forms into valid letters of credit. It is the respondent’s case that the contract was not concluded.

Available:  Arjandas Hiranand Melwani V. Five Star Industries Limited (SC.15/1994, 25 January 2002)

The action proceeded to trial at the conclusion of which, the learned trial Judge, in a reserved judgment, found for the appellants.

The respondent appealed to the Court of Appeal against the judgment of the trial court both as to liability and damages. That court allowed the appeal, set aside the judgment of the trial court and dismissed appellants’ claims. The appellants’ cross-appeal on quantum of damages was dismissed. The Court of Appeal found that the findings made by the trial court were perverse and, unhesitatingly, set them aside. The court found the respondent not liable for breach of contract nor for unlawful interference with appellants’ business. On damages, the Court of Appeal found that the evidence was not sufficient or credible to support the awards made by the trial court and set aside these awards. The appellants being aggrieved by the decision of the Court of Appeal have, with leave of that court, appealed to this Court upon 9 grounds of appeal.


I. Whether the Court of Appeal was right in reversing the finding of the lower court that the defendant/respondent unlawfully interfered with the business of the third to sixth plaintiffs/appellants?

RESOLUTION: IN RESPONDENT’S FAVOUR. (There was no unlawful interference with business of the Appellant).
[‘Again, it cannot be said that this verdict was based on unlawful retention of import licences, a fact that was not pleaded. In light of all I have said above, appellants cannot now in this Court base their claim in tort on the retention by the respondent of the import licences and their eventual expiration. That claim was based on the alleged breach of contract occasioned by the respondent cancelling the purported letters of credit. In my respectful view, Ayoola, JCA, (as he then was) was on a terra firma when in his judgment he observed:- “Although the Judge purported to find the claim for unlawful interference established, it is clear that the alternative claim was predicated on there being a contract and a breach of that contract.” In the case on hand, the Court of Appeal having held that there was no breach of contract (and this was the unlawful means relied on to ground the tort) it must necessarily follow that the alternative claim in the tort of unlawful interference with business must fail. This, in my respectful view, was the point being made by Ayoola, JCA in his judgment.’

Available:  General Sani Abacha & Ors v. Chief Gani Fawehinmi (2000)

‘The alleged breach of contract arose from the cancellation of the letters of credit at the instance of the respondent. Clearly, if the respondent did not issue any letters of credit there was nothing to cancel. Indeed, it became obvious that where some of the conditions precedent for the issuance of letters of credit were not performed, it was extremely difficult, in legal circle, to appreciate how one can either picture the existence of the alleged contract or objectively analyse the fancied contract between the parties in terms of “offer” and “acceptance.” Thus on appellants’ admission that some conditions precedent to the conclusion of a legally binding contract were yet to be complied with, it became certainly unarguable that there was no meeting of the minds between the parties that could lead to the conclusion that the parties were ad idem to the obligation on the issuance of a contract. Had the learned trial Judge adverted his mind to this basic principle of the law of contract, he would have easily appreciated that it was wishful thinking to hold that the parties had concluded a legally binding contract. This clearly explains why the Court of Appeal had no difficulty in holding that the respondent was not liable in contract. It is worthy of note that the appellants never appealed against that finding.’]
II. Whether the award of damages made in favour of the third to sixth plaintiffs/appellants is sustainable in law?

RESOLUTION: (No need considering the issue on damages).
[‘In view of the conclusion reached on Issue (a), no useful purpose will be served by discussing this issue. The respondent was found not liable for breach of contract and for unlawful interference with appellants’ business. It is not necessary any longer to consider the issue of damages. Suffice it to say that the court below was right in its decision setting aside the award of damages made by the trial court. I affirm that decision.’]
‘In conclusion, I find no merit in this appeal which I dismiss with N10,000 costs to the respondent.’

Available:  Oyebamiji & Ors. v. Iyabo Afusat Lawanson & Ors. (2008)

The tort of unlawful interference with the business of another consists in one person using unlawful means with the aim and effect of causing damage to another. To constitute the tort, the means used must be unlawful otherwise the tort is not established. — Ogundare, JSC.

The nature of the plaintiffs/appellants’ claim, as averred in their amended Statement of Claim, which of course they failed to prove, was that there was a subsisting contract between the parties. Whether or not there is a semblance of a legally binding agreement between the parties, that is, a situation where the parties to the contract confer rights and impose liabilities on themselves, will largely depend on whether there exists a mutual assent between them. Where there is doubt on whether the parties have concluded a legally binding agreement, the court has the responsibility to analyse the circumstances surrounding the alleged agreement and determine whether the traditional notion of ‘offer’ and “acceptance” can be distilled from the purported agreement. The mutual assent must be outwardly manifested. The test of the existence of such mutuality is objective. See Norwich Union Fire Insurance Society v Price (1943) AC 455 at 463. When there is mutual assent, the parties are said to be ad idem. Now the two items, “offer” and “acceptance”, earlier referred to, call for some explanation in order to recognise whether or not the parties are ad idem. An ‘offer’ is an expression of readiness to contract on the terms specified by the offeror (i.e. the person making the offer) which if accepted by the offeree (i.e. the person to whom the offer is made) will give rise to a binding contract. In other words, it is by acceptance that the offer is converted into a contract. — Achike, JSC.

Sparkling Breweries Limited and 5 Ors.

Union Bank of Nigeria Limited

Ogundare, JSC

Mr Nweze.









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