AMALGAMATED BANK v. FRAGA OIL GHANA LTD. and ORS
2012
COURT OF APPEAL
GHANA
CORAM
- I. D. DUOSE, J. A [PRESIDING]
- K. A. ACQUAYE, J. A
- E. K AYEBI, J.A
Areas of Law
- Banking and Finance Law
- Contract Law
- Evidence Law
- Civil Procedure
- Commercial Law
2012
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
The Ghana Court of Appeal, per Duose JA with Acquaye JA and Ayebi JA concurring, reviewed a banking dispute arising from an overdraft facility between a bank and Fraga Oil Ghana Ltd, guaranteed by two individuals. The bank sued for over GH¢2.26 billion (old cedis) and interest, mischaracterizing the overdraft as a loan, while Fraga Oil counterclaimed for unauthorized deductions, non-payment of five CEPS cheques, and interest refunds. The High Court dismissed the bank’s claim, found the guarantors not liable, and granted part of the counterclaim. On appeal, the Court of Appeal emphasized pacta sunt servanda and the burden of proof under the Evidence Act, criticized the bank’s unreliable records and implausible excuses, and agreed that cheques were paid from the company’s funds. Most grounds of appeal were dismissed. However, the court partially allowed an additional ground, invoking CI 19 to order an enquiry to calculate a proportionate interest refund to the bank tied to the five cheques; all other grounds failed.
DUOSE JA:-
This is an appeal against the judgment of the Automated Fast Track High Court, Accra dated 2nd day of July 2010.
The plaintiff/appellant hereinafter to be described as the appellant issued out a writ of summons against the defendants/respondents hereinafter to be described as the respondents.
In a) The refund of the sum of two billion two hundred and sixty seven million, nine hundred and thirty-six thousand four hundred and sixty one cedis, eighty three pesewas, ($2,267,936,461.83) being the balance due and owing to the plaintiff on a loan granted to the defendants which they have failed to pay.
b) Interest on the said sum at the prevailing commercial bank rate from May 2005 till date of final payment.
The respondent counter claimed against the appellant for the following:-
a) Payment of Gh¢208,901.69 being the value of the five cheques issued to CEPS and debited to 1st Defendant's account but the value of which were not paid to CEPS.
b) Payment of GH¢115,905.22 being the total value of the unauthorised debits made to the 1st defendant's account.
c) Refund of the sum of GH¢10,053.73 being the interest charged on the 1st defendant's debit balance for the month of July 2004.
d) Refund of the GH¢11,483.59 being the interest charged on the 1st defendant's debit balance for the month of august 2004.
e) Interest on the total of all the aforesaid sums at the prevailing bank rate from July 2004 in respect of reliefs (a) (c) and (d) and from 2006 in respect of relief (b) until the date of final payment.
The statements of claim and defence have been variously amended and many issues were set out for determination of the matter.
The original issues were:-
a) Whether or not the defendants owe the plaintiff the sum endorsed in
b) Whether or not the 2nd and 3rd defendants guaranteed the repayment of the debt in a memorandum to that effect signed by the 2nd and 3rd defendants.
c) Whether or not the plaintiff is in breach of the provisions of the guarantee.
d) Whether or not the defendants have funds in their accounts in excess of the sum claimed by the plaintiff and in consequence of which the latter rather is indebted to the defendants.
The following additional issues were filed
e) Whether or not accounts should be gone into as between the parties and a set-off made of any sums found due and owing to plaintiff from all sums held by plaintiff on behalf of 1st defendant.
f) Whether or not the plaintiff should be ordered to return all sums in