The plaintiff (respondent) an incorporated company, carried on business as importer, exporter and manufacturer. As manufacturer, it imports part of its raw materials from overseas into the country. As the importation of the raw materials involved international trade it operates through its banker.

Its banker is the defendant (appellant) in this action. The appellant is a Commercial Bank incorporated under the Banking Act 1969.

In December, 1986 the respondent and the appellant agreed orally at the latter's Orlu branch, that for the consideration of paying the appellant the usual bank charges and commission, the appellant was to transmit to the respondent's customer Musashi Trading Company Kobe. Japan the sum of US (American Dollars) $16,180 for the importation of raw materials by the respondent.

The parties also agreed that the appellant would open a confirmed letter of credit in favour of the overseas supplier of the respondent to wit Musashi Trading Company Kobe, Japan.

To raise the US Dollars of $16,180.00 the respondent funded the purchase of the said amount through the appellant at Week 11 of the Second Tier Foreign Exchange Market (SFEM) for the sum of N55,699.95 kobo.

On 12th December, 1986 Appellant issued a Documentary Credit No. ORL.4/86. The confirmed letter of credit was to remain valid till 13/1/87. As appellant failed to deliver the confirmed letter of credit to its overseas suppliers, Musashi Trading Company Kobe Japan, on 4th 8th and 11th May, 1987 respondent wrote letters to the appellant wherein it complained repeatedly the non payment of the letter of credit to the said overseas suppliers. On 19th May, 1987 appellant by letter requested the respondent to grant it an extension of the life span of the letter of credit to 15th July, 1987. Reluctantly, respondent granted the request for extension of the life span of the letter of credit by letter dated 17th June, 1987. As appellant still failed to send the letter of credit to Japan the respondent instructed its Solicitor to write letter of complaint to the appellant.

The overseas suppliers of the respondent hereinafter referred to in this judgment as Musashi wrote three letters dated 11th 28th May, 1987 and 2nd September, 1987 wherein they expressed non receipt of the letter of credit were later admitted without objection and marked Exhibits F-F2. Respondent was served with photocopies of Exhibits F-F2.

Notwithstanding its inactivity about the non-delivery of the letter of credit documents relative to the Bank charges were admitted in evidence and marked Exhibits G-G8.

As appellant was not forthcoming, respondent issued with of summons at the Orlu High Court on 6th October, 1987 against the appellant. Whether by coincidence or design on that very day 6th October, 1987 appellant requested the respondent for consent to further extend the life span of the letter of credit which was admitted as Exhibit H, obviously respondent rejected the idea of further extension of the life span of the letter of credit.

The appellant was later served with the writ of summons after which pleadings were served and exchanged. Trial Judge entered Judgement in favour of the respondents thereby rejecting the contention of the appellant that the UCP for documentary credits is applicable in Nigeria. Appellant went to the Appeal court.