Court Fines L.M. Ericsson N800m Over Breach of Contract

A FCT High Court has awarded a cumulative fine of N800 million against L.M. Ericsson Nigeria Ltd, a foreign international company, for breaching a contract it entered with a Nigerian firm, Aqua Oli Nigeria Ltd, in 2006.

Justice Chizoba Orji, in her judgment, held that though the initial contract sum was N171 million, she cannot but agreed with the claimant on a 21 per cent per annum interest sum on the initial amount from February 2006 when the job was executed.

Justice Orji also ordered a 10 per cent per annum interest thereafter on the said amount until the judgment sum is fully liquidated.
She held that the court took judicial notice that naira had drastically lost its value from 2006 to 2023, 17 years after the contract was executed.

“In the instant case, the claimant has been deprived of his money for services rendered to the 1st defendant (Ericsson) since 2006 which has paralysed the business of the claimant ,” she said.

The judge, who ordered an award of N10 million as general damages against the company, declared that “by failing to pay for the three clearing contract jobs which culminated in this suit, the 1st defendant is in breach of contract.”

“Therefore, I enter judgment in favour of the claimant against the 1st defendant only,” she said.

Although claimant’s counsel, Chief Duro Adeyele, SAN, asked for N500, 000 cost of filing the case against Ericsson, the company’s lawyer, Adeleke Adepoju, urged the court to dismiss the application.

Adeyele, who applied for N500, 000 cost, said: “We have spent 17 years on this matter and since 2007, we have been in court. We have spent money bringing our witnesses to court.”

But Adepoju argued that the delay in the matter was most contributed by Nigeria Telecommunications Ltd (the 2nd defendant) being liquidated, among others. The judge, however, awarded the sum of N200, 000 against Ericsson as cost of instituting the suit.

“A successful litigant is entitled to costs. The suit lasted 16 years in court. This is a very long time.

“However, this matter unfortunately suffered some serious hiccups before its determination today,” the judge said in the judgment delivered on April 17 but its certified true copy (CTC) made available on Thursday.

Justice Orji, who agreed with the claimant that the 2nd defendant did not breach any contract with it, dismissed all the reliefs sought against the Nigeria Telecommunications Ltd.

“I have carefully read Exhibits P2 & D2 and I am unable to agree with the 1st defendant that the 2nd defendant engaged the claimant to clear and deliver three consignments (at the Apapa Port and Murtala Mohammed Airport, Lagos State) that resulted in this suit.

“It was therefore the 1st defendant that engaged the claimant to clear and deliver the three consignments of equipment.

“If the 2nd defendant had engaged the claimant, it would not be talking about ‘reimbursement’ of clearing expenses but payment as it would be paying the claimant directly,” she held.

The News Agency of Nigeria (NAN) reports that while the claimant called two witnesses, the 1st defendant called a witness in the matter that lasted for no fewer than 16 years, while the 2nd defendant did not call any witness.

Aqua Oli Nigeria Ltd had, in the suit number: FCT/HC/CV/1244/08 filed by Chief Duro Adeyele, SAN, sued L.M. Ericsson Nigeria Ltd and Nigeria Telecommunications Ltd as 1st and 2nd defendants.

In the amended statement of claim filed on March 29, 2019, the claimant sought four claims against Ericsson. These include “a declaration that by failing to pay for the three clearing contract jobs which culminated to this suit, the 2nd defendant is in breach of contract.

“The sum of N171, 409, 606.71 being agreed liquidated sum owing, due and payable by either or both 1st and 2nd defendants to the claimant for services rendered by the claimant at the Apapa Port and Murtala Mohammed Airport, Lagos and cost of haulage of the consignments to the 2nd defendant’s warehouses at the request of the 1st defendant on three different occasions for three clearing jobs in the year 2006.

“Interest on the said sum of N171,409, 606.71 at the rate of 21 per cent per annum from February, 2006 to the date of judgment and thereafter at the rate of 10 per cent per annum until the Judgment debt is finally liquidated.

“General damages in the sum of N10 million for breach of contracy.