ZENITH BANK GHANA LIMITED VS K. AMO LIMITED & 2 OTHERS
2016
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP JUSTICE GEORGE BUADI J.
Areas of Law
- Banking and Finance Law
- Contract Law
- Evidence Law
2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
The plaintiff bank sued to recover debts and interest from defendants under restructured loan agreements. Defendants admitted the loans but contended the amounts were repaid, alleging overcharged interest. The court found in favor of the plaintiff, supporting the specified interest rates and dismissing the counterclaim due to insufficient evidence. The ruling included a provision for judicial sale of mortgaged property if required to satisfy the debt.
1. 0 Introduction The plaintiff bank and 1st defendant are local limited liability companies in Ghana.
Plaintiff carries on banking business, whilst 1st defendant imports for sale sanitary wares and porcelain tiles, and also a customer of the plaintiff bank.
2nd and 3rd defendants are directors of 1st defendant company, indeed the managing director and general manager respectively.
1. 1 On 26 June 2012, plaintiff bank filed the writ of summons against the defendants jointly and severally for the following reliefs: 1 Recovery of the sum of Seven Hundred and Sixty Three Thousand, One Hundred Ghana Cedis and Twenty Nine Pesewas (GH¢763, 100. 29) as at 30th of April, 2012(being the total indebtedness of the defendants on the Restructured Term Loan Facility). 2 Interest on the sum of GH¢763, 100. 29 at an interest rate of 35. 5% per annum from 1st May, 2012 till date of final payment.
3 Recovery of the sum of Twenty Three Thousand Four Hundred and Seventy Five Ghana Cedis and Seventy Two Pesewas (GH¢23, 475. 72) as at 30th of April, 2012 (in respect of the Import Finance Loan Facility). 4 Interest on the sum GH¢23, 475. 72 at the rate of 28. 5% per annum from 1st of May, 2012 till the date of final payment.
5 Cost IN THE ALTERNATIVE An order for the judicial sale of the 2nd Defendant’s landed residential property used as security for both credit facilities located at Plot No. 23 K Amo Avenue, West Legon, Accra.
2. 0 Plaintiff case Plaintiff’s claim is that based on 1st defendant’s request to enable it bridge cash flow gaps in its operations, and pursuant to a Credit Facility Agreement dated 13 October 2009, the bank restructured 1st defendant’s existing loan facility of GH¢370, 000. 00 into a Term Loan Facility (RTLF) which together with accrued interest stood in the sum of GH¢450, 000. 00 at the bank’s base rate plus 3% per annum, which at the date of the Facility was 35. 5% per annum.
2. 1 Pursuant further to an Import Finance Facility (IFF) Agreement dated 13 December, 2010, the bank extended a credit facility of GH¢71, 480. 00 to 1st defendant at the bank’s base rate plus 3% per annum, which at the date of the Credit Facility was 28. 5% per annum to enable 1st defendant finance importation of titles and sanitary wares from China.
According to plaintiff, both the RTLF and the IFF were secured first by a mortgage by 2nd defendant over his residential property (Plot No. 23, K. Amo Ave, West Legon, Accra), and second by a Joint and Several Guarantee