GHANA CABLE CO. LTD v. BARCLAYS BANK (GH.) LTD
November 25, 2009
SUPREME COURT
CORAM
- ATUGUBA JSC,
- ANSAH, JSC,
- OWUSU (MS), JSC,
- ANIN YEBOAH, JSC,
- BAFFOE-BONNIE, JSC
Areas of Law
- Contract Law
- Banking and Finance Law
- Civil Procedure
- Evidence Law
November 25, 2009
SUPREME COURT
CORAM
AI Generated Summary
The Supreme Court of Ghana, per Atuguba JSC, resolved a commercial dispute between Ghana Cable and Barclays Bank over whether the bank was obliged to continue extending credit facilities, including funds to clear imported machinery at the Tema Port. Ghana Cable had earlier executed an unlimited debenture (1979) and a directors guarantee (1981) in favour of Barclays and argued that these instruments, coupled with a longstanding course of dealing, created a corresponding right to unlimited advances or an estoppel preventing the bank from refusing further credit. The High Court had agreed, but the Court of Appeal reversed. Affirming that reversal, the Supreme Court held that lending was within the banks discretion, the stamped facilities showed ceilings, and neither estoppel nor course-of-dealing replaced the original terms. Although the Bill of Lading issue was pleaded, there was no admission or evidence of wrongful detention. The appeal was dismissed unanimously.
J U D G M E N T
ATUGUBA, JSC:-
The Plaintiff per its Writ of Summons against the defendant claimed the following:
“ a.) Plaintiff Company’s claim against defendant is for damages for the total collapse of
the plaintiff company’s business, loss of good will loss of profits resulting from breach of contract by defendant for unlawfully withdrawing credit facilities for plaintiff company under credit facility agreement for making funds available for plaintiff company for importation of much needed machinery and equipment, spare parts appliances etc, for rehabilitation and repair of plaintiff company’s factory as manufacturers of electric cables etc. and to enable plaintiff company remain in business.
b) Alternatively, for a declaration that defendants are liable to make substantial funds available for plaintiff company under credit facility agreement with defendants to enable plaintiff company bounce back into business by rehabilitation, repairing, replacing machinery and for importation of raw materials and generally for doing all acts that are necessary for plaintiff’s company to commence production and remain in business.
c) Further or other reliefs as to this Hon. Court may seem fit.”
The crux of the plaintiff’s case is tersely put thus in its statement of case dated 23/5/2007:
“My Lords, the short point to be determined in this appeal is whether Barclays Bank (Respondent Bank) was right in refusing to grant Ghana Cable (Appellant Company) further credit facilities despite the existence of a debenture dated 20th December 1979 under which the appellant charged all its assets as security for payment of credit facilities advanced to the appellant by respondent from time to time. See page 281 to 283 of the Record of Appeal and Ex 1 (the guarantee) executed by the appellant’s Directors and Respondent on 20th May 1981: See page 290 of Record of Appeal.”
This question was answered in the plaintiff’s favour by the trial High Court but was reversed by the Court of Appeal.
The plaintiff’s grievances with the decision of the Court of Appeal’s judgment may be summarised as follows: By reason of the unlimited security by way of a debenture dated 20/12/1979 and a guarantee dated 20/5/1981 in favour of the defendant against all its monetary liabilities towards the latter the plaintiff also had a corresponding unlimited right to monetary advances from it for the purpose of operating its business properly. At times the contention is that by a course of dealing be