Breach of Contract: Court Rules in Favour of R&B, Dismisses CMB’s Suit As Frivolous

By Eric Elezuo

The Lagos State High Court sitting in Ikeja, and presided over by Justice A. O. Ipaye, has given judgment on the matter between R&B Nigeria Limited and CMB Building Maintenance and Investment Limited over breach of contract.

The suit, with number LD/7881GCM/2024, was decided in favour of  R & B Nigeria Limited, the owner of the Pearl Nuga Park Estate, Sangotedo, Lekki, Lagos, in which CMB Building Maintenance & Investment Limited, a property developer in Lagos owned by Mr. Kelechi Mbagwu, was mandated to perform every due diligence to R&B in terms of fulfillment of all agreed contracts rhat were breached as well as payment of all apurtenances.

Describing the landmark judgement, which has dragged for an upward of 14 years, a statement by the management of R&B, and made available to The Boss, noted as follows:

“This dispute typifies the inherent challenge in property development contracts where the developer such as Mr. Kelechi Mbagwu after taking advantage of the land owner’s property, seeks to evade his obligation to transfer an agreed part of the built property back to the landowner.

“The facts of the dispute are basic. On 22 April 2011, R & B Ltd entered into a developers contract with CMB Building, whereby CMB Building agreed to build 92 houses, comprising 38 units of 4-bedroom detached houses and 54 units of 3-bedroom terrace houses on the Pearl Nuga Park Estate, within 36 months from execution of the agreement. The parties also agreed that, CMB Building would deliver 28 housing units to R & B Ltd, comprising 19 units of 3-bedroom terrace and 9 units of 4-bedroom Detached houses, plus 10 plots of vacant land on the Estate.

“Regrettably, after constructing a total of 109 houses in the Estate, CMB Building reneged on the developer’s contract and failed, till date, to deliver a single housing unit to the land owner, R & B Ltd. This prompted R & B Ltd to invoke the arbitration clause in the contract in 2019, to recover its contractual entitlement of 28 housing units plus 10 plots of vacant land at the Estate, plus damages for loss of use of the houses and interest.

“Subsequently, the arbitration tribunal made up of three eminent jurists issued a Final Award dated 17th April 2023 (corrected on May 23, 2023) in favor of R & B Ltd. The arbitral tribunal ordered CMB Building to: (1) deliver vacant possession of 19 units of 3-bedroom terraces, 9 units of 4- bedroom detached houses and 10 plots of vacant land in the Estate to R & B Ltd; (2) pay a sum of money based on accrued charges for real estate, penalty and special damages to R & B Ltd for breach of contract; (3) refund to R & B Ltd the sum of N19,019,047.05 being the unused balance of the sum of N25,000,000.00 received by CMB Building for the construction of a personal residence for the owner of R & B Nig. Ltd (4) to pay the sum of N8,500,000.00 to R&B as cost of the arbitration paid solely by R&B Nig. Ltd; and (5) pay interest at the rate of 10% on the various monies ordered to be paid above.

“Following the publication of the award, CMB Building hastily filed a law suit at the Lagos High Court to set aside the arbitration award (Suit No: LD/7149GCM/2023) based on various accusations of misconduct levelled against the arbitral tribunal, all in a bid to delay execution of the judgment while CMB continues to develop and sell the property illegally as it has been fraudulently doing. In response, R & B Ltd also filed an application (Suit LD/7881GCM/2024) seeking for the enforcement of the arbitration award as if it were a judgment of the High Court of Lagos State.

“In her judgment, Honourable Justice A.O. Ipaye dismissed CMB Building’s law suit as a frivolous venture, and ordered that R & B Ltd’s rights, as granted by the arbitral tribunal, be fully enforced.

“Any past, present of future transactions with CMB Building with respect to this real estate development is at the owners risk.

“R & B Nigeria Ltd remains the bona fide and sole owner of this parcel of land in Lagos State.”

The judgment has therefore, put to rest years of loggerheads between the two contending parties.