INTEREST IS NOT PAYABLE ON ORDINARY DEBT

NATURE OF PRE-JUDGEMENT INTEREST

The law on pre-judgment interest is that it is to be awarded where there is an agreement for payment of interest or under mercantile custom or under principle of equity, as in breach of fiduciary duty. In all such cases the law is that pre-judgment interest is as of right. The Appellant is no doubt a licensed Commercial Bank and thus bound by its trade custom to give interest on money lodged with it. The law requires a person claiming such right to pre-judgment interest to so plead and prove at the trial. In law generally the Courts have the power to award post-judgment interest but not pre-judgment interest since pre-judgment interest which must be based on pleadings and proof by the party so claiming entitlement to it save if it is part of the mercantile custom of the transaction involving the parties. In all therefore, it is never granted as of course, but must either be part of the contemplation of the parties by virtue of their contract terms or mercantile custom of fiduciary duty or it is specifically pleaded and proved. In Ferrero and Company Ltd. v. Henkel Chemicals Nigeria Ltd. (2011) LPELR 12 (SC). His Lordship, Onnoghen, JSC (as he then was, now CJN) had expatiated on the rationale behind this principle of law inter alia thus: It follows that before a party can claim pre-judgment interest, he has to plead not only his entitlement to the interest but the basis of the entitlement either by Statute or contract/agreement between the parties, or mercantile custom or principle of equity, such as breach of fiduciary relationship. It is not for the Court to speculate or conjecture or assume the facts relevant to the claim. The relevant facts must be pleaded, as fact not pleaded goes to no issue. In addition to the requirement of pleading the relevant facts, the Plaintiff must adduce evidence at the trial in proof of the relevant facts. Where there is no evidence in proof of the facts, then the pleadings are deemed abandoned. See also UBA Plc. v. Oranuba (2013) LPELR- 20692 (CA). See also Hausa v. FBN Plc (2000) 9 NWLR (Pt. 671) 64; Ekwunife v. Wayne W/A Ltd (1989) NWLR (Pt. 122) 422: Hinma Merchant Ltd v. Alhaji Inuwa Aliyu (1994) 5 NWLR (Pt. 347) 667 @ pp. 676-677; Stabilini Visinoni Ltd v. Metalum Ltd. (2007) LPELR-8661 (CA) UBN Ltd v. Salami (1998) 3 NWLR (Pt. 538) 347: Idakula v. Richards (2000) FWLR (Pt. 14) 2439; Jallco Ltd. v. Owoniboys Tech Serv. Ltd. (1995) 4 NWLR (Pt. 391) 534 @ p. 550; Petgas Resources Ltd. v. Louts N. Mbanefo (2007) 6 NWLR (Pt. 1031) 545 @ p. 549; Consolidated Resources Limited v. Abofar Ventures Nigeria Limited (2007) 6 NWLR (pt. 1030) 225.

— B.A. Georgewill JCA. Stanbic IBTC Bank Plc V. Longterm Global Capital Limited & Ors. (CA/L/427/2016, 9 Mar 2018)

TWO CIRCUMSTANCES WHERE INTEREST MAY BE AWARDED

Interest may be awarded in a case in two distinct circumstances, namely: (i) As of right: and (ii) Where there is a power conferred by statute to do so, in exercise of the Court’s discretion. Interest may be claimed as a right where it is contemplated by the agreement between the parties, or under a mercantile custom, or under a principle of equity such as breach of a fiduciary relationship. Where interest is being claimed as a matter of right, the proper practice is to claim entitlement to it on the writ and plead facts which show such an entitlement in the statement of claim. See Per NNAEMEKA-AGU, JSC in EKWUNIFE V. WAYNE WEST AFRICA LTD (1989) LPELR-1104(SC) (PP. 33-42, PARAS. C-A).

— U.M. Abba Aji, JSC. Cappa v NDIC (2021) – SC.147/2006

INTEREST WILL BE AWARDED WHERE PROVED EVEN IF NOT CLAIMED

In fact, where interest is not even claimed on the Writ, but the facts are pleaded as did the Appellant in its amended Statement of Claim and evidence was given which showed entitlement thereto, the Court may award interest as a general rule. See EKWUNIFE V. WAYNE (W/A) LTD (1989) 5 NWLR (PT.122) 428.

— U.M. Abba Aji, JSC. Cappa v NDIC (2021) – SC.147/2006

ADMISSION AGAINST INTEREST

An admission against interest, in order to be valid in favour of the adverse party, must not only vindicate or reflect the material evidence before the court; it must also vindicate and reflect the legal position. Where an admission against interest does not vindicate or reflect the legal position, it will be regarded for all intents and purposes as superfluous. And a court of law is entitled not to assign any probative value to it.

– Tobi JSC. Odutola v. Papersack (2007)

EVEN WHERE INTEREST IS NOT CLAIMED, COURT MAY AWARD INTEREST

It has been held in effect “that in purely commercial transactions a party who holds on to the money of another and keeps it for a long time without any justification and thus deprives that other of the use of funds for the period should be liable to pay compensation by way of interests.” See; Nigerian General Superintendence Co. Ltd. Vs Nigeria Ports Authority (1990) 1 NWLR (Pt.129) 71, Adeyemi V. Lan & Baker (Nig.) Ltd (2000) 7 NWLR (Pt.653) 33. However even where interest is not claimed in the Writ of Summons, the Court is entitled, in appropriate cases, to award interest in the form of consequential order. See; N.G.S.O. Ltd V. N.P.A. (supra) Ferrero & Co. Ltd. V. Henkel (Nig) Ltd. (2011) 8 SCM1 at 11.