ECOBANK GHANA LIMITED v. ALUMINIUM ENTERPRISE LIMITED

PROF. KOTEY, JSC:-

1. Introduction

This is an appeal against the judgment of the Court of Appeal substantially affirming the decision of the trial High Court, but reversing it in one small respect.

The background to the controversy is that in the early 1990s, following negotiations between the Plaintiff/Appellant/Appellant (Plaintiff), the Defendant/ Respondent/ Respondent (Defendant) and the European Investment Bank (EIB), a number of transactions were entered into for the financing of a project to expand the factory and operations of the Defendant.

1. These agreements included a loan agreement between EIB and the Plaintiff, dated 30th January 1992 and 7th February 1992 (Exhibit ‘1’), by which EIB lent to the Plaintiff, One hundred and sixty-five thousand Ecus (165,00.00 Ecus) which was to be on-lent by the Plaintiff to the Defendant.

2. A second loan agreement was entered into by the Plaintiff and the Defendant, dated 11th March 1992 (Exhibit ‘A’), by which the Plaintiff granted the Defendant a loan of One hundred and sixty-five thousand Ecus (165, 000.00 Ecus).

3. Pursuant to Exhibit ‘1’, EIB granted the Plaintiff a loan of Thirty-five thousand Ecus to part finance the subscription by the Plaintiff of shares in the Defendant.

4. The Plaintiff and the Defendant entered into a share purchase agreement dated 7th April 1992 (Exhibit ‘5’) by which the Plaintiff bought 30,000,000 shares, representing 10% shares in the Defendant, subject to terms and conditions.

5. EIB granted the Defendant a loan of Two million, eight hundred thousand Ecus (2,800,000.00 Ecus). The said sum of 2.8 million Ecus was to be disbursed through the Plaintiff.

By Exhibit ‘5’, one (1) representative of the Plaintiff was appointed to serve on the five-member board of directors of the defendant. This representative became the chairman of the Finance Committee of the board.

The contract between the Plaintiff and the Defendant for the loan of 165,000 Ecus (Exhibit ‘1’) provided for a five-year moratorium for the payment of the principal sum after which the loan was to be paid in seven annual installments commencing on 30th September 2003.

Pursuant to Exhibit ‘1’, two European expatriate consultants were engaged by the Defendant from 1991 to 1993. Further, on 29th September 1994, a German expatriate consultant was appointed as the Managing Director of the Defendant.

The loan agreement between the Plaintiff and the Defendant (Exhibit ‘A’) also provided that in the event of