Two Limited Liability Companies In Legal Battle Over Disputed Debt

The cordial business relationship between two Limited liability companies Tata Africa Services limited and Jasper Biochemicals and Allied Products Limited over the years has degenerated to legal hostility over a disputed debt.     

In a suit filed before a Lagos High Court sitting at Ikeja, Lagos, Nigeria by Tata Africa, the company is claiming the sum of N39,088,877 from Jasper Biochemicals Company being the money allegedly owed it for the purchase of Industrial and food chemicals, while Jasper Biochemicals Company is counter claiming in the sum of N60,371,110 in breach contract of sale of expired, inferior and substandard chemicals, N20million for breach of contract and N23,286,048 as outstanding rent of its warehouse and cost of repairing the warehouse.

In a statement of claim filed before the court by Metrocrest Legal practitioners, the Claimant Tata Africa alleged that by a local purchase order dated 3rd September, 2018, the defendant, Jasper Biochemicals purchased some industrial and food chemicals from the Claimant worth N44,352,357.59, but only paid marginal part of the purchased sum leaving an outstanding balance of N39,088,877.     

The Claimant has demanded for the payment of the outstanding debt from the defendant but the defendant remain adamant and have refused to pay up the outstanding debt.     

Whereupon the Claimant claims from the defendant is: an order that the defendant pay the Claimant the total sum of N39,088,877 being the outstanding sum owed the Claimant by the defendant for the purchase of Industrial and food chemicals from the Claimant.

Interest on the said sum at the agreed rate of 2% per month from the 3rd of September, 2018 until Judgement is delivered and thereafter at the rate of 10% until final liquidation.       

However, in a statement of defence and counter claim accompanied by witness statement on oath of the Managing Director/Chief Executive Officer of Jasper Biochemicals and Allied Products Ltd, Dr Emmanuel Okworigho and filed before the court by a Lagos Lawyer, Barrister Frank Eke, the defendant Company denied almost all the claims of Tata Africa.

He averred that on the 20th of August, 2018 Tata Africa in the process of closing down its chemical division and planning to give up its rented warehouse was desperately looking for outlets to dispose off the industrial and food chemicals, knowing full well that the majority of its Products had expired, while the remaining few orders were near expiration dates of less than 2 to 3 months.

According to him, the company was trying to avoid heavy punitive sanctions from NAFDAC  for selling expired industrial food to the public.   

The company requested Jasper Biochemicals as a trusted and reliable Company for help to evacuate the last batch of unsold expired and nearly expired chemicals, and to enable the Claimant invoice the expired goods for the purpose of evacuation into the defendant warehouse to enable the defendant dispose them on behalf of the Claimant and also due to the fact that the Claimant was paying heavily for rented warehouses.     

At the instant of request, the Claimant chemicals were kept in the defendant’s warehouse, therefore at no time did he acceded to the indebtedness of N39,088,877.00, or any amount whatsoever because as at the time the Claimant was closing its chemical business, the transaction the Claimant allegedly had with the defendant’s credit line had also expired. 

The local purchase order for the goods was not addressed to the defendant and no contract was envisaged with the Claimant.

Dr Okworigho averred further that N10million was paid into the Claimant account by his company on account of chemicals the defendant was able to dispose off, and in the course of chemical business, in situation where goods were found to be substandard or expired, such goods would be returned to the Claimant as a rule of chemical business.       

When the Claimant was invited to come and take stock of the balance of their chemicals, the Claimant refused but opted for payment, by that time there was no known warehouse to return the chemicals which are highly hazardous to Human consumption having closed and given up her warehouse.     

Consequently, by way of counter-claim, the Jasper Biochemicals and Allied Products Limited counter -claims against Tata Africa Services (Nigeria) Limited as follows: 

A declaration that Tata Africa is in breach of sale of chemical Products of merchantable quality in the sum of N60,371,110 being the cost of chemical purchased in cash from the company which are expired, inferior and substandard.   

The sum of N17,286,000 being the cost to repair Jasper Biochemicals warehouse which damage was caused as a result of expired chemicals stored in the warehouse.   

N6,000,048 being the outstanding unpaid rent of the warehouse. 

Damages in the sum of N20 million for breach of contract arising from the loss in cured as a result of sale of unfit and unsellable bad stock of food and industrial chemical Products which were returned by costumers as unsold. 

Meanwhile, the presiding Judge, Mrs. Lateefat Folami has adjourned till 15th of April, 2021 for hearing to commence.