Keystone Bank in $778,118 breach of contract mess

A Federal High Court in Lagos, Southwest Nigeria has ordered Keystone Bank Limited to pay a Chinese company, Hexing Electrical damages in the sum of $778,118.72 over a breach of contract.

The judgement of the court was sequel to a suit filed before the court against Keystone Bank Limited by Chris International Agencies company and Central bank of Nigeria as defendants, claiming the sum of $778,118.72 being the total outstanding sum of the money due and payable under the irrevocable letter of credit issued by the bank sometime in September, 2015 to the Chinese company.

Keystone Bank on 16th of September, 2015 was said to have issued letter of credit in favour of Hexing Electrical Company Limited, a company registered under the laws of the Peoples Republic of China in the sum of $1,134,545, subject to the provisions of uniform custom and practice for documentary credit.

The bank paid $336,421.28 in varying installments to the company, however, despite all demands for the payment of the balance of $798,108.70 the bank was said to have refused and only paid additional $20,000.

Consequently, the company petitioned the Central bank of Nigeria, thereafter the company instituted the suit against the bank and two others.

The case of the third defendant Chris International Agencies was that by memorandum of understanding with Hexing Electrical, they formed a consortium known as Chris Ejike Hexing consortium for the purpose of carrying on the business of production, supply and installation of meters in Nigeria, the company entered into a supply and installation agreement with the Enugu Electricity Distribution company, for the supply and installation of indoor, ring type meters with sealable terminal cover.

At the hearing of the case, Keystone Bank did not file any counter affidavit, its lawyer said the bank would abide by whatever decision the court took.

In his judgement, the presiding Judge, Nicholas Oweibo, said the bank did not deny the existence of contract between it and the Hexing Electrical Company and that the company had through its affidavit in support shown that the bank failed to completely honour its own part of the contract.

He said the evidence had indeed established that Keystone Bank was in breach of its contract with the company.

“The complaint of fraud in this case is not in respect of the documentation of the letter of credit. The fraud complaint is with respect to the goods that the plaintiff did not meet the specification.  In the light of the above, I enter judgment for the plaintiff and grant its prayers by ordering that Keystone Bank pay damages to Hexing Electrical company limited in the sum of $778,118.72 being the money due and payable under the irrevocable letter of credit, an order that the bank pay the company interest at the rate of 10% per annum from the date of judgement until the liquidation of the judgement debt,” he said.