ROYAL DUTCH AIRLINES (KLM) AND ANOTHER v. FARMEX LTD. (No. 2)
November 11, 1981
SUPREME COURT
GHANA
CORAM
- ADADE
- WUAKU
- AMUA-SEKYI
- AIKINS
- EDWARD WIREDU JJ.S.C
Areas of Law
- Conflict of Laws
- Civil Procedure
- Commercial Law
- Contract Law
November 11, 1981
SUPREME COURT
GHANA
CORAM
AI Generated Summary
The Supreme Court of Ghana addressed a post‑judgment application by Royal Dutch Airlines (KLM) and British Caledonian Airways (BCal) seeking review and clarification of the interest rate applicable to a £23,800 damages award in favour of Farmex Ltd for breach in the carriage and delivery of mangoes. The damages had been expressed in pound sterling, and the question was whether interest should follow Ghana’s bank rate under the Courts (Award of Interest) Instrument, 1984 (L.I. 1295) or the UK (London) sterling commercial rate. By a majority (Wuaku, Amua‑Sekyi and Edward Wiredu JJ.S.C.), the Court granted the application, holding L.I. 1295 applies to cedi‑denominated awards and adopting the London rate for sterling, payable only as simple interest from the date of breach, with the parties to ascertain the rate as at 19 December 1990. Adade and Aikins JJ.S.C. dissented, favouring the Ghana bank rate and dismissal of the application.
JUDGMENT OF ADADE J.S.C.
On 19 December 1990, this court, by a majority of four to one, gave judgment in favour of the plaintiff-company (hereinafter called the plaintiffs) for £23,800 damages for breach of a contract of carriage. The court also ordered interest to be paid on the said damages. The two defendants, Royal Dutch Airlines (KLM) and British Caledonian Airways (BCal), contending that the judgment is [p.685] ambiguous as to the rate of interest applicable, have applied to the court, on a review, to clarify the position. The question to be determined, therefore, is whether the judgment is foggy as to the rate of interest applicable: the UK rate or the Ghana rate. If the rate is clear on the face of the judgment, the subsidiary question arises as to whether there exist any special circumstances to warrant our reviewing the rate and changing it.
It is worth observing that in the trial court, the learned judge, Lutterodt J. (see [1987-88] 2 G.L.R. 650) awarded interest to the plaintiffs at the prevailing bank rate, and expressed herself as guided by the Courts (Award of Interest) Instrument, 1984 (L.I. 1295) which she quoted extensively as follows:
"Where in any civil cause or matter the Court makes an order for the payment of interest on any sum due to the plaintiff . . . the rate at which such interest shall be payable shall be the Bank rate prevailing at the time the order was made by the Court, but no compound interest shall be awarded."
(The emphasis is mine.) Surely the bank rate in the Instrument can be no other than the bank rate in Ghana; it cannot be the rate in any other country, otherwise it will have been expressly stated in the instrument. The Court of Appeal (by a majority of two to one) affirmed the award of damages (see [1989-90] 1 G.L.R. 46 ante at 62, C.A.), but set aside the award of interest on the ground that:
"The plaintiffs have been indemnified in full [i.e. by the award of the £23,800 damages] and there is no justification for awarding interest on that sum of money."
The defendants appealed to the Supreme Court against the award of damages. The plaintiffs cross-appealed on the award of interest. The defendants' appeal was dismissed. This court, by a four to one majority decision: see [1989-90] 2 G.L.R. 623, SC ante allowed the plaintiffs' cross-appeal and restored the award of interest. It is clear that the restoration could not have been at any other rate than that specified by the trial High Court. My brothe