GHANA COCOA BOARD v. UNIQUE INSURANCE LTD.

INTRODUCTION

This is a matter in which Ghana Cocoa Board, the Plaintiff herein offered seed money in the sum of GHS1,500,000.00 to its Licenced Buying Company (LBC), Farmers Alliance in 2020. The said LBC was to purchase cocoa beans from cocoa farmers for the 2020/2021 cocoa season with the said facility for delivery to the Plaintiff. As a condition for the grant of the said facility, the Defendant offered a guarantee for the payment of any debt of the LBC to the Plaintiff. Farmers Alliance was unable to supply the requisite tons of cocoa beans and at the time this Writ was issued it owed the Plaintiff an outstanding sum of GHS748,747.67. The Writ was instituted against the Defendant alone and Farmers Alliance was not a party and was never joined. The Defendant denied the claim on the grounds that it had not been served with the requisite notices and that Farmers Alliance, the primary obligor ought to be a party to the suit which Plaintiff did not do.

SUMMARY OF THE RESPECTIVE CASES OF THE PARTIES

From the pleadings of both parties the following material facts can be deduced. That Farmers Alliance sometime in 2020 applied for money (seed fund) from Plaintiff to enable the said Farmers Alliance purchase cocoa beans from cocoa farmers for delivery to Plaintiff for the 2020/2021 cocoa season. That as a condition precedent for the financial assistance, the said LBC was to provide a guarantee from an acceptable financial institution. The Defendant an insurance Company provided a Credit Guarantee Bond on behalf of the LBC and undertook to pay any debt of the LBC to Plaintiff under GHS5,000,000.00.

A term of Exhibit “B” stated that:-

The Guarantor hereby undertakes to pay COCOBOD upon first written demand without cavil or argument any sum or sums within the limit of FIVE MILLION GHAN CEDIS (5,000,000.00) as aforesaid together with any interests thereon without your needing to prove or to show grounds or reasons for your demand for the sum specified therein.

The LBC was given the financial assistance by the Plaintiff in the sum of GHS1,500,000.00 for the 2020/2021 cocoa season but was unable to deliver the total value. Farmers Alliance’s indebtedness with the Plaintiff as at 8th June, 2022 was GHS748,747.67 and Plaintiff’s claim remained unpaid despite the Credit Guarantee of the Defendant to Plaintiff. On 1st July, 2022, the Plaintiff issued a Writ of Summons against the Defendant alone claiming the following: -

a) The sum of GHS