AMEL GHANA LTD vs COUNTY FARMS AND PROCESSING LTD

The Plaintiff and Defendant entered into a Finance Lease Agreement on 1st October, 2021, upon an offer by Plaintiff on 27th September, 2021. This Agreement was referred to by the Plaintiff as Agreement (A).

The parties subsequently on 28th July, 2022, entered into another Finance Lease Agreement, upon an offer, by Plaintiff on 12th July, 2022. This Agreement was referred to by the Plaintiff as Agreement (B).

Both finance lease agreements were contractual and under terms. This notwithstanding, the contractual relationship is primarily and generally also regulated by statute or legislation. This is the Finance Lease Act, 1993, PNDCL 331.

Section 21 of this Act defines Finance Lease Agreement. It provides:

“finance lease agreement” means a written agreement between two parties by which the lessor undertakes to lease to lessee for the lessee’s use only and against payment of mutually agreed lease rentals over a specified non cancellable period,

(a) either the lessor’s own already acquired assets, or

(b) an asset that the lessor agrees to acquire from a third party, known as the supplier, chosen and specified by the lessee so that the lessorretains full title to the asset during the period of the lease,

and, under which, subject to agreement by the lessor, the lessee may exercise an option to purchase the asset outright after the period of the lease at a price agreed on by the parties.”

This definition exposes the “anatomy” of the agreement the parties in this suit decided to contract. In the peculiar facts of this case, the lessor is the Plaintiff whiles the Defendant is the lessee.

The Plaintiff, as lessor acquired from a third party known as Mantrac Ghana Ltd, herein known also, as the supplier, two hydraulic excavators, 330GC and 320GX in respect of Agreements (A) and (B) respectively.

Per Section 21 of the Financial Lease Act, the lessor, that is the Plaintiff herein retains full title to these two assets, the 330GC and 320GX Excavators during the period of the lease.

Under the law, the assets, that is the excavators, is acquired by the lessor or the Plaintiff for the lessee’s, the Defendant’s use only and against payment of mutually agreed lease rentals, over a specified non-cancellable period.

The Act defines non-cancellable lease. It provides:

“non-cancellable lease” means a lease that is cancellable only

(a) on the occurrence of a remote contingency,

(b) by mutual agreement, or

(c) by opera