Facts:

The appellant, by offer letters dated 27th March, 2008 and 27th May, 2008, offered to sell some of its shares to the respondents at a certain amount. Parties entered into negotiations and finally agreed on the price to be paid for the offered shares. The respondents paid for the shares offered at the negotiated price.

Later in 2009, after payment for the shares but before its transfer, the respondents by a letter addressed to the appellant expressed their intention to discontinue with the transaction and demanded for a refund of the money paid for the shares on the ground that the appellant failed to disclose an encumbrance on the shares. Aggrieved by appellant’s refusal to refund, the respondents instituted an action against them at the High Court. The appellant responded by filing its defence and objected to the trial court’s jurisdiction over the matter. In its final decision the trial court granted the reliefs sought by the respondents and held that it had jurisdiction over the matter.

Dissatisfied with the decision of the trial court the appellant appealed to the Court of Appeal.