BSIC GHANA LIMITED VS SAKORANT LIMITED & ANOR
2016
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP JUSTICE GEORGE BUADI J.
Areas of Law
- Banking and Finance Law
- Contract Law
- Civil Procedure
2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
This case involves a dispute between a bank (plaintiff) and two defendants (a company and its managing director) over an unpaid credit facility. The bank extended a GH¢55,000 credit facility to the company, secured by a mortgage on property owned by the managing director and a personal guarantee. When the company defaulted on repayment, the bank sued to recover the debt of GH¢79,249.28 plus interest, or alternatively, for judicial sale of the mortgaged property and company assets. The court found that the bank had complied with legal requirements for notifying the defendants of their default and providing an opportunity to redeem the mortgage. The defendants' defense was struck out for failure to attend pre-trial review. The court ruled in favor of the bank, granting all reliefs as endorsed on the writ of summons against the defendants. The case highlights the importance of proper notification procedures in banking and finance law, as well as the enforcement of security and guarantees in loan agreements.
1. 0 Background The parties in this case are both registered limited liability companies doing business in Ghana.
Plaintiff is engaged in banking business whilst 1st defendant is engaged in the sale and distribution of alcoholic drinks and a customer of the plaintiff bank.
2nd defendant is the managing director of 1st defendant company who the bank claimed provided security over a credit facility the bank claims to have granted to 1st defendant.
1. 1 On 20 January 2014, the bank commenced this action by writ of summons against defendants for the following reliefs: a Recovery of the sum of GH¢79, 249. 28 as at 25th November, 2013. b Interest at the contracted rate of 30. 25% on the said sum GH¢79, 249. 28 from 26th November, 2013 to the date of full and final payment.
In the alternative; c Order for judicial sale of House No. 104, Kwabenya and the fixed and floating assets of 1st defendant company in full satisfaction of the sum of GH¢79, 249. 28 plus accrued interest at the contracted rate of 30. 25% per annum as at the date of full and final payment.
d Cost on full indemnity basis.
2. 0 Plaintiff’s case Plaintiff says upon request of 1st defendant, it extended a 12 month duration credit facility of GH¢55, 000 made up of an overdraft of GH¢25, 000 and a bank guarantee of GH¢30, 000 to 1st defendant to facilitate its business operations.
The said credit facility was contained in a facility letter which expressed the terms of the loan agreement that included interest rate of 30. 25% per annum calculable on the principal loan amount and default rate of 2% per annum.
The facility was to be paid before expiration of 12 month term from the date of disbursement.
2. 1 Plaintiff avers that the credit facility was secured first with a mortgage by 2nd defendant over her landed property - House No. 104, Kwabenya, Accra, and second with debenture over the assets and stocks of 1st defendant company, and third by a personal guarantee by 2nd defendant to redeem the facility in event of 1st defendant’s default in repaying the facility.
2. 2 Plaintiff says 1st defendant has defaulted in its repayment obligations and that the bank has notified 2nd defendant of the default, as well as 1st defendant’s indebtedness to the bank.
Plaintiff says that defendants have failed to liquidate the debt despite several demands, and that 1st defendant’s total indebtedness as at 25 November 2013 stood at GH¢79, 249. 28 inclusive of interest. Plaintiff’s case is that defendant