April 28, 2022
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
The Court of Appeal of Ghana addressed a banking dispute between National Investment Bank Ltd (NIB) and its customer, ABM Logistics Terminal Ltd, arising from two facilities used to equip and upgrade an inland container terminal. ABM failed to repay, and NIB sued for recovery and enforcement against guarantors and collateral. ABM counterclaimed for damages alleging NIB breached a promise to operate a banking facility at its terminal—required by CEPS and GPHA—and that interest computation was excessive. The High Court entered judgment for NIB, finding over‑capitalization and double fees, ruling the mortgage ineffective for lack of registration, and declining damages. On appeal, the Court held no enforceable contract existed because the alleged agreement was contingent on Bank of Ghana approval, so no breach or damages lay, and dismissed the appeal. In an interlocutory appeal, the Court set aside the trial court’s post‑judgment variation as functus officio, otherwise dismissing that appeal.
RICHARD ADJEI-FRIMPONG JA:
This suit was premised to be a simple debt recovery action. The National Investment Bank Ltd (NIB) sued its customer the ABM Logistics Terminal Ltd and others joined in the suit as the credit guarantors. By the defence and counterclaim however, a different twist phased in, which rather, as will be observed, became the pre-occupation of the trial. To add to the twist were other post-judgment matters which, culminating in an interlocutory appeal, is also before us to be determined compositely with the main appeal.
The basic facts of the dispute are however not unusual, and we set them out briefly to launch into our discourse. For ease of identification of the parties, we shall throughout this discourse, refer to the plaintiff, National Investment Bank Ltd by its popular acronym “NIB” and refer to the defendants simply as such.
NIB granted two facilities to the 1st defendant. The first facility, in the sum of GH¢ 584,444.63 was to be used to purchase some handling equipment, motor vehicle, ICT infrastructure and to upgrade the Makoadze Fisheries building into a container terminal for its operations. The second facility, also for the sum of GH¢ 137,637.43 and described as supplementary, was to go into additional ground works for upgrading the container terminal.
The basic terms of the facilities as contained in the documents tendered at the trial as Exhibits 1 and B were that, the supplementary facility was to be consolidated with the capitalized principal existing of the first facility and interest charged thereon on the date of the first disbursement of the supplementary loan.
Further, the rate of interest was 24% per annum provided that the rate was to be adjusted from time to time by NIB. The consolidated loan was repayable by monthly instalments over a period of 36 months including a 6-month moratorium on the principal and interest commencing on the date of first disbursement of the supplementary loan.
As is commonly the case, the parties agreed on a tall list of security for the facilities including joint and personal guarantees by the 2nd 3rd and 4th and 5th defendants. Also important to mention, the 1st defendant was to channel all proceeds from the operation of the terminal through NIB and the proceeds were to be lodged into an escrow account to be shared on pari-pasu basis between NIB and Ghana Leasing Company Ltd, apparently, the supplier of the equipment and machinery.
It was established at the trial that the facil