Facts:

The appellant, a bank in liquidation, instituted an action against the respondent in the Federal High Court Lagos claiming the sum of N2.9 million being the value of its goods kept in the custody of Panalpina World Transport (the respondent) pursuant to a collateral management protocol of agreement. The appellant bank, while it was engaged in banking business extended a credit facility to a company called Aramco Nigeria Limited to enable it import gas toxins which when imported were to be secured by a lien of hypothecation. By a tripartite agreement, the goods were deposited in a Panalpina warehouse by Aramco Nigeria Limited to the order of the appellant in furtherance of the appellant’s right of lien. The respondent was to release the goods only on the written instruction or confirmation of the appellant.

While the goods were in the respondent’s custody, the bailiff of the High Court of Lagos seized the goods in execution of the judgment in suit No.LD/94/91 between Fidelity Union Merchant Bank and Najem Holdings Limited. Shortly after the judgment was executed, the respondent brought inter-pleader summons. The appellant sued, claiming that the respondent was negligent in releasing the goods to a third party.