U.B.A. Plc v. BTL Ind. Ltd.  19 NWLR (Pt. 1013) 61 at 104, paras. B-C, per Onu, JSC:
“As the claim has nothing to do with monetary or fiscal policy of the Federal Government of Nigeria in the pleadings and evidence before the court, the mere fact that the unit of account is foreign currency for which the respondent paid the Naira equivalent does not make it a foreign exchange matter.”
The facts of the above case would enable us digest the above quoted statement of law by the Supreme Court. The Respondent, a Nigerian company, was involved in the business of importation and distribution of building materials, industrial chemicals, and raw materials. The Respondent imports items on credit from its overseas suppliers and the items were usually sent with bills of exchange, or bills for collection or by letter of credit denoted in various foreign currencies. The Respondent maintained a current account with the Appellant. The role of the Appellant in relation to the Respondent’s transactions with its overseas suppliers was that, based on agreement and for the settlement of these bills, the Appellant appropriated the relevant sums by debiting the current account of the Respondent (with the Naira equivalent) and was expected to apply to the Central Bank of Nigeria (CBN) for approval and foreign exchange allocation for onward remittance of the foreign currencies to the Respondent’s overseas suppliers, being payment for the goods supplied. It however turned out that the Respondent cleared the goods supplied but the Appellant was unable to effect payment on behalf of the Respondent to its foreign suppliers/creditors. The reason was that although the Appellant duly transferred the money (Naira equivalent) it drew from the Respondent’s account to CBN to procure foreign exchange, the application was unsuccessful. Consequently, CBN returned the money to the Appellant. However, the Appellant failed to disclose this fact and also failed to return the money to the Respondent but kept making empty and deceitful assurances to the Respondent that the money would be transmitted. The Respondent, upon discovering through a circular that CBN had returned the money to the Appellant, sued the Appellant principally for the refund of the money it paid to the Appellant for remittance to its overseas suppliers. The trial Court (Lagos High Court) delivered judgment in favour of the Respondent and same was affirmed by the Court of Appeal.
The Appellant appealed to the Supreme Court. Continue reading The mere fact that a contract is in foreign currency does not make a dispute arising a foreign exchange matter.