Facts:

In August 2007, the appellant entered into contract with the 1st respondent for the supply and installation of fitted kitchens at Cluster A of the 1004 Estate, Victoria Island, Lagos belonging to the 1st respondent. The entire contract sum was N67,263,000.00 (Sixty Seven Million, Two Hundred and Sixty Three Thousand Naira) out of which the sum of N50,447,250.00 (Fifty Million, Four Hundred and Forty Seven Thousand, Two Hundred and Fifty Naira) was paid by the 1st respondent to the appellant as mobilization fee in accordance with the agreement. The 2nd respondent provided an advance payment guarantee in favour of the appellant. It was further stipulated that the contract will be executed within 16 (sixteen) months of commencement and that a periodic valuation of the quantum of work done will be carried out by the 1st respondent’s consultant. The appellant commenced work and by November, 2008 when the first valuation was done, the 1st respondent issued its report and stated that the quantum of work already done by the appellant was worth N41,747,000.00 (Forty One Million, Seven Hundred and Forty Seven Thousand Naira).
Additional work was carried out by the appellant and by March, 2009 another valuation was done and the 1st respondent’s consultant issued its report stating that the quantum of work done was worth additionalN1,281,200.00 (One Million, Two Hundred and Eighty One Thousand Naira, Two Hundred Naira). It was also stated that the work done had reached 85%. Relying on these valuations, the appellant approached the 2nd respondent for additional funds for continuation of the project. The 1st respondent did not give the required consent to the 2nd respondent to pay the appellant on the ground that the valuation reports were not yet confirmed. The 1st respondent was dissatisfied with the quantum of work done by the appellant and the fact that the project had lingered for almost two years as against the sixteen weeks stipulated in the contract for completion. It therefore, directed the appellant to engage the services of a certain company, Marbol Kitchen Cabinet Co. Ltd, one of its listed companies for the completion of the remaining work. Shortly after this directive, the 1st respondent terminated the contract with the appellant. In the letter of termination, the 1st respondent stated inter alia, that it decided to terminate the contract because the appellant was incompetent in handling the project and that the appellant failed to deliver the project within the time agreed. The 1st respondent also stated that it re-awarded the contract to another firm for the sum of N11,448,731.00 (Eleven Million, Four Hundred and Forty Eight Thousand, Seven Hundred and Thirty One Naira). The appellant was aggrieved and filed a suit at the High Court of Lagos State against the respondents. The appellant sought among several reliefs, a declaration that the termination of the contract by the 1st respondent is illegal, null and void and that the sum of N31,460,100.00 (Thirty One Million, Four Hundred and Sixty Thousand, One Hundred Naira) be paid to it by the respondent as damages for wrongful termination of contract, loss of revenue and cost of valuation reports and architect certificates.
The appellant also sought orders of the court declaring that the 1st respondent is not entitled to collect the advance payment guarantee sum of N10,787,600.00 (Ten Million, Seven Hundred and Eighty Seven Thousand, Six Hundred Naira) from the 2nd respondent and perpetual injunction restraining the 2nd respondent from paying the guaranteed sum to the 1st respondent and also costs of the suit. The 1st respondent on it part filed its defence and incorporated a counter claim of the sum ofN11,448,731.00 (Eleven Million, Four Hundred and Forty Eight Thousand, Seven Hundred and Thirty One Naira) being the money spent in re awarding the contract. At the end of trial, the Judge ruled partly in favour of the appellant by granting some of its prayers and also granted the counterclaim of the 1st respondent. In granting the counterclaim, the court found that the appellant had been incompetent in handling the project and was in breach of the contract between the parties and that the 1st respondent was right in terminating the contract. The appellant was dissatisfied with the decision of the trial court and consequently filed a notice of appeal at the Court of Appeal, Lagos Division. One of the issues for determination is whether the 1st respondent was right in terminating the contract between the parties.