FRANSTEL LIMITED v. MERCHANT BANK LIMITED
2016
HIGH COURT
GHANA
CORAM
- ANGELINA MENSAH-HOMIAH (MRS.) JUSTICE OF THE HIGH COURT
Areas of Law
- Contract Law
- Evidence Law
- Civil Procedure
2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
The Plaintiff sued the Defendant Bank over the Defendant's failure to open an L/C for the Plaintiff's importation of sugar, causing alleged financial losses. The court found the Plaintiff did not prove the Defendant initially advised ordering in tranches or that the Defendant accepted landed property as a deposit. Instead, the Plaintiff failed to meet the 10% upfront margin requirement binding for the US$ 3,000,000.00 L/C. Consequentially, the Defendant was not liable for breach of contract or the Plaintiff’s financial losses and was only held to refund the Plaintiff's deposit minus legitimate charges, with interest applied. The case emphasized documentary evidence over oral evidence and the Plaintiff's burden of proof in civil suits.
JUDGMENT
The Plaintiff Company commenced the instant action against the Defendant Bank on 03/10/06. By its amended writ of summons and statement of claim filed on 31/10/13, the Plaintiff claimed five reliefs, namely:
a. An order for recovery of cash the sum of four hundred and fifty million cedis ( ¢450,000,000.00) being monies the defendant demanded from the Plaintiff as a deposit for the opening of Letters of Credit for the Plaintiff for importation of sugar.
b. Interest on all monies payable to the Plaintiff at the prevailing bank rate from 1st December, 2004 to date of final payment.
c. Damages for breach of contract
d. Cash the sum of GH¢916, 976.02 being anticipated profit lost by the Plaintiff as a result of the defendant's breach of the contract to open Letters of Credit for the Plaintiff.
e. Cash the sum of $90,000.00 representing 3% of the contract sum of $3,000,000.00 the Plaintiff forfeited to Zar Limited as a result of the abrogation of that contract, which abrogation was occasioned as a result of the defendant's breach of contract to issue a letter of credit for the Plaintiff.
THE PLAINTIFFF'S CASE.
The plaintiff's case as gleaned from its amended statement of claim filed on 31/10/13, the Further Amended Reply filed on 28/04/14 and the evidence-in-chief of its Managing Director, Francis Amankwaa ( now deceased) is that it obtained a contract to supply sugar to some reputable institutions in Ghana. The Plaintiff, per its MD approached the Defendant and proposed its intention to import a ship load of sugar worth US$ 3,000,000.00, which the Bank agreed, but advised that the importation be done in tranches of US$ 500,000.00. Based on the Bank's advise, the first tranche of US$ 500,000.00 was approved for the Plaintiff on these conditions: (i) the plaintiff's MD was to provide payment guarantee to secure the entire US$ 500,000.00 worth of goods; (ii) he was also asked to pay 10% of the value of the letter of Credit which was C450,000,000.00( now GH¢45,000). The Plaintiff then obtained a loan of GH¢ 45,000.00 and a payment guarantee of US$ 500,000.00 from UT Bank in favour of the Defendant after which the Defendant opened the Letter of Credit. The loan from UT Bank attracted a compound interest of 6% per month and the payment guarantee was at the cost of 2% per month. However, the supplier informed the Defendant that it was not commercially viable to charter a whole ship and put only US$ 500,000.00 worth of sugar in it. Through an email cor