PARRY & COMPANY LTD v. PIONEER FOOD CANERY & SAHEL SAHARA BANK
2016
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP ERIC KYEI BAFFOUR JUSTICE OF THE HIGH COURT
Areas of Law
- Contract Law
- Banking and Finance Law
- Civil Procedure
2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
Plaintiff sought interlocutory injunction to prevent the 1st Defendant from enforcing an unconditional bank guarantee provided by the 2nd Defendant, alleging detrimental business practices and ensuing financial losses. The 1st Defendant moved for arbitration per their agreement, accepted by the court. However, the court had to determine if an injunction should be granted to restrain the bank guarantee's invocation pending arbitration. Upon review, the court ruled that the standard exceptions to enforce such guaranteesfraud and irreparable harmwere not demonstrated by the Plaintiff. Consequently, the court denied the Plaintiff's injunction request and mandated the arbitration process to proceed.
RULING
The Plaintiff/Applicant prays for a two headed order of interlocutory injunction. The first injunction he seeks is to restrain the 1st Defendant from having recourse to a security in the form of Bank guarantee which the 2nd Defendant Bank provided. The second injunction he seeks is directed at the 2nd Defendant/Respondent, the Bank that gave the unconditional guarantee to the 1st Defendant on behalf of the plaintiff in relations to the Plaintiff’s obligations under a Sales Stock Handling Agreement it had entered into with the 1st Defendant. The Applicant intends to stop 2nd Defendant from honouring any call on it to perform or make payment to 1st Defendant to the tune of Ghc 1,650.000.00.
The 1st Defendant is a manufacturer of a variety of canned tuna products whiles the Plaintiff until recently, a distributor of 1st defendant’s products. The parties have been in a long standing business relationship where the Plaintiff was mandated as the authorized distributor of 1st defendant’s products. The parties renewed their contract in 2014 for the supply of starkist brand of canned fish.
The Plaintiff claim that with time the sale and distribution of the 1st defendant’s product was affected due to infiltration of counterfeit products on the market and this has occasioned losses to the Plaintiff. The renewal agreement called for a period of 60 days payment on invoices failing which it will lead to a call in of the Bank guarantee provided by the 2nd Defendant.
And it was under such circumstance that Plaintiff claims that 1st Defendant dumped on it quantities of dented, rusted, near expiry and inferior goods which had been rejected in the European market for distribution. As a result the Plaintiff has been unable to pay an amount of US$ 1,376.271.56 plus an interest of US$ 33.770.14 and has led to 1st defendant making demands on the 2nd Defendant to make good its obligation under the guarantee it provided.
To Plaintiff the guarantee given should not be honoured because the 1st defendant is indebted to it in
terms of accumulated losses he the plaintiff has suffered, and that the 1st defendant need to reimburse it for costs expended on advertisement, brand development, promotion etc, a compensation that ought to be paid it and other reliefs he seeks from the court.
Before the application for injunction was heard 1st defendant filed a motion to stay proceedings pending arbitration. Counsel for Plaintiff conceded that it was in principle not opposed to goi