Facts:

The 1st respondent is an insurance policy holder with the 2nd respondent. The policy covered certain risks concerning the business equipment of the 1st respondent. The 3rd respondent is a Federal Government agency responsible for the management of Nigerian Ports. The appellant is the insurer of the 3rd respondent. The 1st respondent alleged that the 3rd respondent vandalized its 1250 KVA Gas Generator and Sync Panel which was in its possession, which was part of the 1st respondent’s consignment. The 3rd respondent admitted liability and consequently informed the 1st respondent to make a claim with the appellant for indemnity. The 1st respondent made a claim to the 2nd respondent for the sum of N14,044,210.00 (Fourteen Million, Forty Four Thousand, Two Hundred and Ten Naira) being the value of the missing spare parts from the vandalized 1250 KVA Gas Generator and Sync Panel.
The 2nd respondent made a part payment of N11,119,594.33 (Eleven Million, One Hundred and Nineteen Thousand, Five Hundred and Ninety Four Naira, Thirty Three Kobo) to the 1st respondent and relying on the principle of subrogation, proceeded to make a demand on the appellant for it and a balance ofN2,924,810.67. (Two Million, Nine Hundred and Twenty Four Thousand, Eight Hundred and Ten Naira, Sixty Seven Kobo). In the correspondence between the 2nd respondent and the appellant, the latter requested for certain documents and information which were promptly supplied. The appellant later reneged and refused to pay the amount requested on the ground that the 3rd respondent was in possession of the 1250 KVA Gas Generator and Sync Panel for 133 days and that this was a breach of the policy with it which only made provision for damage occurring within 90 days after discharge. The 1st and 2nd respondent filed a suit at the Federal High Court, Lagos Division against the appellant and the 3rd respondent for the sum ofN14,044,210.00 (Fourteen Million, Forty Four Thousand, Two Hundred and Ten Naira) and pre judgment interest of 21% interest from October, 2004 when the cause of action arose and accrued.
The appellant filed its defence and also a preliminary objection challenging the jurisdiction of the court. The objection was based on the allegation the 1st and 2nd respondents did not serve pre-action notice on it before proceeding to file the suit and that the suit was statute barred. After hearing the parties, the preliminary objection was dismissed and judgment entered in favour of the 1st and 2nd respondents. The appellant was dissatisfied with the judgment of the trial court and filed a notice of appeal at the Court of Appeal, Lagos Division. The 1st and 2nd respondent also filed a cross appeal. One of the issues for determination whether the trial court had jurisdiction to entertain the suit of the 1st and 2nd respondents.