Facts:

The case of the Appellant, as Plaintiff at the High Court of Lagos State (Trial Court), is that on the 14th and 15th of July 1995 delivered to the Respondent 60 Metric Tons of Titanium Dioxide and 3.75 Metric Tons of Busam 11m2 worth N21.9 million Naira (Twenty Million, Nine Hundred Thousand Naira) only by virtue of a Local Purchase Order (LPO) based on the agreement that the Respondent was to complete payment within Thirty (30) days of delivery. The Appellant in its contention stated that it had sourced the money to execute the contract from a financing firm, Summit Finance Company Limited. It claimed that the loan facility was secured and facilitated by the agreement of the Respondent to pay within 30 days of delivery via the LPOs issued by the Respondent’s company. By the terms of the loan facility, the Appellant was liable to pay a penalty charge of N1,135,750.00 (One Million, One Hundred and Thirty-Five Thousand Naira, Seven Hundred and Fifty Naira) monthly in the event of default in repayment. The Appellant also stated that the Respondent was at every material point aware that the execution of the contract was financed by a loan as the supplies were ordered and transported from abroad. The Appellant alleged that it could not repay the loan due to the default of the Respondent to pay within Thirty (30) days of delivery. The Respondent acknowledged that it received the goods delivered by the Appellant but denied knowledge of the loan facility from Summit Finance Company Limited and the stipulation of payment within 30 days of delivery and hence, refused to pay the defaulting sum and the lost interest accrued against the Appellant. The Appellant sued to contend that its losses in the transaction arose purely from the failure of the Respondent to honour its due obligations.

At the conclusion of trial at the trial Court, rhe trial Court held that the Respondent knew that the Appellant sourced funds from Summit Finance Company Limited to finance the execution of the contract and the Respondent was also aware of the interest rates and charges to be incurred. The trial Court granted the first two heads of claim made by Appellant but dismissed the third claim for being too remote and ordered interest rate of 6% per annum on the Judgment debt till it is fully paid.

Aggrieved by the decision of the trial Court, the Respondent appealed to the Court of Appeal. The Court of appeal allowed the appeal and set aside the judgment of the trial court.

Aggrieved by the decision of the Court of Appeal, the Appellant appealed to the Supreme Court.