Facts:

The appellant and the respondent are companies engaged in the business of providing telecommunications services. In 2001, the parties entered into an interconnection agreement. One of the terms of the agreement was that calls to and from each party’s network to the other will be billed at the official call rate approved by the Nigerian Communications Commission (NCC). Under the agreement, parties were to reconcile accounts by preparing invoices and serving same on the other party after settlement of accounts for a particular period of time. In line with the agreement, the respondent reconciled accounts for all calls made to and from the parties networks to each other for the accounting period between 2004 and 2006 and demanded payment of N56,768,193.05 (Fifty Six Million, Seven Hundred and Sixty Eight Thousand, One Hundred and Ninety Three Naira, Five Kobo) from the appellant. In its reply, the appellant admitted indebtedness of N46,588,817.00 (Forty Six Million, Five Hundred and Eighty Eight Thousand, Eight Hundred and Seventeen Naira) and proposed a repayment plan of Four Million Naira per month.
The respondent accepted the proposal without prejudice to its right to recover the entire sum. However, after admitting the indebtedness, the appellant refused to make any payment but instead filed a suit against the respondent at the Federal High Court, Lagos Division. The appellant alleged that the official billing rate per minute approved by the NCC in 2004 was N11.52 (Eleven Naira, Fifty Two Kobo) and that instead of applying the official billing rate, the respondent used N18.00 (Eighteen Naira) for a total of 25,946,716 (Twenty Five Million, Nine Hundred and Forty Six Thousand, Seven Hundred and Sixteen) minutes call thereby overbilling it N6.48 (Six Naira, Forty Eight Kobo) for all the calls from January to December, 2004. The appellant contended that as a result of the overbilling, the total sum amounted to N168,177,096.16 (One Hundred and Sixty Eight Million, One Hundred and Seventy Seven Thousand, Ninety Six Naira, Sixteen Kobo) out of which the sum of N111,408,903.11 (One Hundred and Eleven Million, Four Hundred and Eight Thousand, Nine Hundred and Three Naira, Eleven Kobo) was payable to it by the respondent after deducting the N56,768,193.05 (Fifty Six Million, Seven Hundred and Sixty Eight Thousand, One Hundred and Ninety Three Naira, Five Kobo) demanded by the respondent.
The respondent filed its defence and incorporated a counter claim of N56,768,193.05 (Fifty Six Million, Seven Hundred and Sixty Eight Thousand, One Hundred and Ninety Three Naira, Five Kobo). The respondent also filed an application for judgment on admission of the appellant to pay N46,588,817.00 (Forty Six Million, Five Hundred and Eighty Eight Thousand, Eight Hundred and Seventeen Naira) to the respondent to liquidate the debt. The court however refused to grant the application. In its defence to the counterclaim, the appellant set up the defence of set-off but failed to plead material facts and adduce evidence to prove the set-off. After hearing the parties, the court dismissed the suit of the appellant and granted the counterclaim. The appellant was dissatisfied and filed a notice of appeal at the Court of Appeal, Lagos Division urging the court to reverse the trial court.