Background
This case arose from a commercial dispute between the appellant, Veepee Industries Limited, and the respondent, Cocoa Industries Limited. The appellant had supplied polypropylene products to the respondent under a credit agreement that stipulated payment within 30 days, alongside interest at the bank rate for any unpaid invoices. After delivery, when the respondent failed to make payment, the appellant sought recovery of N553,316.08 with a claimed interest rate of 35% per annum since February 24, 1992, until full payment was made.
Issues
The Supreme Court was primarily tasked with determining the following key issues:
- Whether the appellant adequately proved the interest rate of 35% awarded by the trial court.
- Whether the absence of proof for the claimed interest rate should invalidate the request for pre-judgment interest.
Ratio Decidendi
The court held that in commercial transactions, claims for interest rates must be supported by credible evidence. They must be specifically pleaded, and unsupported interest claims cannot stand. As there was no admissible evidence proving the claimed rate of interest at the trial court, the award was deemed improperly granted.
Court Findings
The Supreme Court concluded the following:
- The appellant did not substantiate the claim of 35% interest due to vague evidence presented in the affidavit from a clerk, lacking necessary details and proof.
- The trial court's award of interest based solely on the plaintiff's claims without credible evidence was erroneous and therefore set aside by the Court of Appeal, which acted correctly.
- The principle of stare decisis means that the Supreme Court is bound by its previous decisions unless they are found to perpetuate injustice or are rendered per incuriam.
Conclusion
The Supreme Court upheld the Court of Appeal's decision to dismiss the appellant's claim for the interest rate. The judgment emphasized that claims must be substantiated by concrete evidence and that trial courts must refrain from granting relief not specifically sought by the parties.
Significance
This ruling underscores the importance of providing sufficient and credible evidence in commercial claims, particularly regarding interest rates. It clarifies that unsupported claims, especially those made in default of defence, cannot simply be assumed or awarded by courts, reinforcing the need for adherence to due process in legal proceedings.