Facts:

Reagan Renaissance Limited (Respondent) a licensed importer of cement, entered into a contract with a foreign company known as He Trading Malta Limited, for the supply of 300,000 metric tonnes of bagged ordinary Portland cement into Nigeria. The supply was to be made in September, October, or November 2009. Pursuant to that contract, the Respondent entered into an agreement with Standard Chartered Bank Nigeria Limited (Appellant), to issue a Bank Guarantee on its behalf, to HC Trading Malta Limited in the initial sum of, $1 million, which sum was later increased to $2.36 million, so as to cover the financial exposure of HC Trading Malta Limited and any attendant demurrage costs. As consideration for issuing the said Bank Guarantee, the Respondent provided an equal cash collateral in its fixed deposit account with the Appellant. HC Trading Malta Limited however defaulted in supplying the cement. Within the supply period of the cement by HC Trading Malta Limited, the Respondent was informed that the Federal Government of Nigeria had banned the importation of bagged cement into Nigeria. As a result of the ban, the Respondent instructed the Appellant to cancel the Bank Guarantee.

The Appellant however refused to do so and on 31/12/2009, notified the Respondent that it had debited its account in the sum of ₦47,068,875 in favour of HC Trading Malta Limited in adherence to the Bank Guarantee issued by the Appellant. The Respondent, by a letter, immediately demanded a refund of the debited money, which the Appellant refused to make. Consequently, the Respondent at the High Court (trial Court) prayed for an order directing the Appellant to credit the Respondent’s account with the sum of ₦47,068,875.00 and interest on the sum till judgment and thereafter, till the final liquidation of the judgment sum. The Respondent also sought damages to the tune of ₦100,000,000.00. At the conclusion of the trial, the trial Court acceded to the claims of the Respondent.

Dissatisfied with the decision of the trial Court, the Appellant appealed to the Court of Appeal.