IN RE TIMBER AND TRANSPORT KUMASI-KRUSEVAC CO., LTD. ZASTAVA BONSU AND ANOTHER

JUDGMENT OF SOWAH J.S.C.

Sowah J.S.C. delivered the judgment of the court. It is appropriate for the proper appreciation of the issues involved, to start with the history of the company, Timber and Transport Kumasi-Krusevac Co., Ltd., hereinafter referred to as TAT-KK Co., Ltd.

On 8 March 1966 there was registered with the Registrar of Companies, a private limited liability company, under the name and style of Timber & Transport Co., Ltd. (TAT) whose object, inter alia, was the exploitation and exportation of timber. The company had a subsidiary known as TAT Furniture and Construction Co., Ltd. The shareholders of the Timber and Transport Co., Ltd. were principally Osei Bonsu, Snr. who held over 95 per centum, the others being his son Osei Bonsu, Jnr. and his nephew Osei Tutu.

It does appear from the affidavits filed by the parties that from the period 1966 to 1971 the company ran at a loss and that by 1971 the losses had exceeded the million-cedi mark. In the words of the appellant, by 1971 the company was in a "paralytic state of malignant insolvency." In passing, it ought to be mentioned that Osei Bonsu, Snr. admits in his affidavit the company's insolvency but says its liabilities were over a million but about ¢791,890.90. He also admitted that by 1971 one of the company's creditors, namely, Barclays Bank (Ghana) Ltd., had found it necessary to appoint a receiver to the company.

It is not quite clear how the Yugoslavian company came into the picture, whether upon the invitation of Osei Bonsu, Snr. or at its own request. Suffice it to note that on 20 July 1971 an agreement was entered into between Timber and Transport Co., Ltd. (TAT) acting by its managing director, Osei Bonsu, Snr. of the one part and Sumako Industrijski Kombinat Crvena Zastava, a corporation registered under the laws of Yugoslavia (hereinafter referred to as Zastava or the petitioner) of the other part.

The substance of the agreement was that the two companies would merge and a new company would be established under the name and style of Timber and Transport Kumasi-Krusevac Co., Ltd. which would engage in a common enterprise in the timber industry. Osei Bonsu, Snr. would transfer 50 per centum of the shares in TAT to Zastava; the shares in the furniture company would be transferred to the new company. Zastava would contribute the sum of US$250,000 as a consideration for its shareholding. The new company would be responsible for all the debts of the Timber and T