UNIVERSAL MERCHANT BANK LTD. v ABI CAPITAL FINANCIAL SERVICES LTD. & ANOR

The Supreme Court of Ghana adjudicated a corporate governance and banking law dispute involving a Ghanaian bank, its former Managing Director (2nd Defendant), ABI Capital Limited (1st Defendant), and long-standing client Volta River Authority (VRA). The 2nd Defendant authorized three $33 million LC facilities, exceeding statutory single obligor limits, and arranged payment of USD 247,500 (GH¢349,593.75) to ABI Capital by debiting VRA’s account without consent or Board approval. After VRA challenged the debit, the Bank refunded the amount and sued for restitution and damages for breach of fiduciary duty. The High Court dismissed the Bank’s claims and granted the 2nd Defendant reliefs; the Court of Appeal reversed substantially, declaring breach of duty, awarding GH¢20,000 to the Bank, and setting aside the counterclaim. On further appeal, the Supreme Court struck out non-compliant grounds, proceeded under the omnibus ground, held that the 2nd Defendant breached fiduciary duties and that termination was lawful, found the LC transaction voidable, and ordered the Defendants jointly and severally to refund GH¢349,593.75 with interest; the 2nd Defendant’s appeal was dismissed and the Bank’s cross-appeal allowed.