MTN NIGERIA COMMUNICATION LIMITED V. CORPORATE COMMUNICATION INVESTMENT LIMITED (2019)

Background

Corporate Communication Investment Limited was a trade partner of MTN Nigeria Communication Limited. Their commercial relationship began in about 2005 and was regulated by successive trade-partner agreements. In January 2011, MTN issued a fresh Trade Partner Agreement, identified as exhibit A and numbered 381730. The agreement stated that it superseded earlier agreements and prescribed the parties’ respective rights and obligations. Among other things, the respondent could terminate upon giving three months’ written notice, while MTN could terminate upon giving 60 days’ written notice.

The respondent signed exhibit A and returned it to MTN. MTN did not append its own signature, but the parties continued trading in accordance with the terms of the document. On 18 March 2011, MTN issued a termination letter, exhibit B. The respondent contended that the letter was invalid because it did not comply with the agreed notice period and was addressed to Corporate Communication Limited rather than Corporate Communication Investment Limited. After the termination, MTN rejected orders placed by the respondent, withdrew 27 SIM-registration kits and failed to resolve the respondent’s complaints. The respondent alleged that it had incurred substantial expenditure on facilities, equipment, personnel and other resources needed to operate as MTN’s trade partner.

The respondent commenced proceedings at the High Court of Rivers State seeking declarations that the termination was invalid, oppressive and wrongful, a declaration that exhibit B was not a proper notice of termination, and N500 million as general damages. The trial court found the appellant’s statement of defence incompetent and treated the evidence of its witness, DW1, as of no moment. Nevertheless, the court held that exhibit A was enforceable, found MTN in breach and awarded N250 million general damages and N20,000 costs. The Court of Appeal affirmed the decision. MTN appealed to the Supreme Court.

Issues

1. Whether the Court of Appeal relied on extraneous matters, including evidence elicited from DW1 under cross-examination.
2. Whether exhibit A created an implied, binding and enforceable contract notwithstanding MTN’s failure to sign it.
3. Whether the awards of N250 million general damages and costs were justified.

Ratio Decidendi

The Supreme Court dismissed the appeal and affirmed the concurrent decisions of the two lower courts. The Court held that an appellate court is primarily concerned with the correctness of the decision appealed against, not necessarily with the correctness of every reason given for reaching it. A wrong reason will not invalidate a right decision unless the misdirection caused a miscarriage of justice or led to an incorrect conclusion.

The Court further held that evidence elicited from an opposing witness under cross-examination may constitute evidence in support of the cross-examining party’s case where it relates to facts pleaded by that party. Cross-examination is not confined to attacking credibility; answers obtained may affirm or strengthen the cross-examiner’s case. In this matter, DW1’s admissions that MTN relied on exhibit A in issuing exhibit B, that the respondent was entitled to N100 million in respect of SIM-kit activation and that a trade partner could earn substantial commissions supported facts already pleaded by the respondent. The evidence was therefore relevant and was not extraneous.

On the contract issue, the Court held that exhibit A contained the essential terms of a concluded bargain. MTN drafted and issued the agreement, sent it to the respondent for signature, accepted the respondent’s execution and thereafter continued to transact business on its terms. The absence of MTN’s signature could not be used as a weapon against the respondent, particularly since MTN itself relied on exhibit A when purporting to terminate the relationship. The case was distinguished from an agreement or memorandum expressly made subject to the later execution of a formal contract. Here, no vital term remained unsettled and the parties’ conduct demonstrated an intention to be bound.

Court Findings

The Supreme Court applied the principle that a party should not benefit from its own wrong. It also relied on section 169 of the Evidence Act 2011, which embodies estoppel by conduct. By its acts and omissions, MTN caused the respondent to believe that exhibit A governed their relationship. Equity therefore treated as done that which ought to have been done and looked to the parties’ intention and the substance of the transaction rather than allowing MTN to rely on a formal defect deliberately created by itself.

The Court noted that the respondent seeking declaratory reliefs had to succeed on the strength of its own case, not merely on the weakness of MTN’s defence. The respondent discharged that burden through its pleadings, witness deposition, exhibits and the admissions made during cross-examination. The Court also respected the concurrent findings of fact because MTN failed to demonstrate that those findings were perverse, unsupported by the record or founded on a wrongful admission or rejection of evidence.

In relation to damages, the Court explained that general damages are intended to compensate for loss naturally and unavoidably flowing from a breach and to place the injured party, so far as money can, in the position it would have occupied had the breach not occurred. The award is discretionary but must be grounded in the evidence. The respondent’s evidence concerning its investment in the trade-partner business, cancelled orders, SIM-kit activation and lost commissions was substantially uncontradicted. The trial judge was therefore entitled to accept it, and the Court of Appeal correctly declined to interfere with the discretionary award.

Conclusion

The appeal was dismissed for want of merit. The judgment of the Court of Appeal affirming the High Court’s judgment was upheld. The Supreme Court made no order as to costs.

Significance

The decision confirms that a written commercial agreement may be enforceable notwithstanding the absence of one party’s signature where the essential terms have been settled, the document has been accepted by the other party and the parties’ subsequent conduct shows that they acted under it. It also illustrates the operation of estoppel by conduct and the equitable rule preventing a party from profiting from its own default. The case is important on evidential procedure because it confirms that relevant admissions obtained in cross-examination may be relied upon, provided they relate to pleaded facts. Finally, it restates the restrained approach of the Supreme Court to concurrent findings of fact and to discretionary awards of general damages.