Facts:

The respondent Petroleum Special Trust Fund awarded a contract to Aurora Ventures Nigeria Limited (“Aurora Ventures”) for the supply and distribution of motorized grinding machines and made an advance payment of N5,916,000.00 (Five million, Nine hundred and sixteen thousand naira) to Aurora Ventures for this purpose. The appellant Equity Indemnity Company Limited guaranteed the performance of the contract by its Bond issued under the seal of the company on the 11th of September 1998. Aurora Ventures failed to perform the contract and the respondent as plaintiff instituted a suit at the High Court of the Federal Capital Territory for the recovery of the advance payment. In addition, the respondent filed an application to have the suit placed on the undefended list. The appellant filed notice of intention to defend the suit. The court heard the suit on the 18th of September 2001 and delivered judgment in favour of the respondent on the 12th of November 2001. Being dissatisfied with the judgment, the appellant filed an appeal at the Court of Appeal.