SIMAVI COMPANY LTD VS BARCLAYS BANK OF GHANA LTD.
2019
HIGH COURT
GHANA
CORAM
- JUSTICE JENNIFER ABENA DADZIE
Areas of Law
- Banking and Finance Law
- Contract Law
- Tort Law
- Evidence Law
2019
HIGH COURT
GHANA
CORAM
AI Generated Summary
Justice Jennifer Abena Dadzie of the Ghana High Court (Commercial Division) decided a negligence suit arising from a failed recall of a US$200,000 wire transfer. The Plaintiff, a rice importer and customer of the Defendant bank, instructed an MT103 transfer to CV Thai Malleable Iron and Steel Co. Ltd at Bank Negara Indonesia. After discovering fraud, the Plaintiff sought an urgent recall on Sunday July 7; the bank sent recall messages via Barclays Bank New York and JP Morgan Chase. Barclays reported the beneficiary had been credited on July 8 and later withdrawal was indicated, aligning with Plaintiff’s own findings. Although the court held industry practice favored MT192 or MT199 with /FRAD/, it found that even proper coding would not have prevented loss due to timing, time zones, and the receiving bank’s control. Contract terms also limited the bank’s liability. All claims, including refund, interest, and travel expenses, were dismissed, with costs awarded to the bank.
Wire transfers allow banks, individuals and large corporations and many more such entities effect payments involving astounding volumes of money more efficiently, more conveniently with remarkable speed, in-country and across international boundaries, particularly with the advent of complex computer network systems. In such a world, there is very little or no room for mistakes. It has been stated that “[M]ost wire transfers proceed without difficulty: the beneficiary receives the funds, the banks settle and the wheels of commerce turn smoothly on.” But that is not what happened here in the case before me. The Plaintiff herein employed this mode to effect payment to its suppliers, resulting in substantial economic losses being occasioned to the Plaintiff, which losses it now seeks to recover from the Defendant herein.
I will recount the facts that led to this dispute, much of which, it is noted, are not in dispute. The Plaintiff, a customer of the Defendant, is a company incorporated under the laws of Ghana whose core business relates to the importation of rice, and the Defendant, also referenced hereafter as the “Bank” is a financial institution licensed by Bank of Ghana to engage in and is engaged in the business of banking.
On the 5th day of July, 2013, Plaintiff issued instructions to the Bank, comprising a written application letter and the completed standard international transfer form of the bank known as the Form E17 for the transfer of the sum of US$ 200,000.00 out of its USD account to CV Thai Malleable Iron and Steel Co. Ltd, its trading partner in Indonesia, as an advance payment on a shipment of rice. These documents were tendered in evidence as the Exhibits “1” and “1A” of the Defendant Bank. This transfer was to be effected in lieu of an earlier transaction Plaintiff had brokered with a Thailand based company, TMP Rice Mill Co. Ltd., for the supply of rice. The transaction was carried out by the Bank on the same day using the SWIFT electronic transfer system through their intermediary bank, Barclays Bank, New York, and the beneficiary bank’s intermediary bank in the USA, JP Morgan Chase Bank, New York, with the transaction value dated for the same day, 5th July, 2013; that is, the transaction was to be given same day value. The wire report in verification of this transaction was also put in evidence and marked as Exhibit “2”. The sum was paid into an account numbered 0299371723 of Bank Negara Indonesia (BNI), Mangga Besar Raya Branch (Bra