NIB wins US$60 judgement debt case

NIB Boss, John Kweku Asamoah

NIB Boss, John Kweku Asamoah

The National Investment Bank Limited has won an appeal at the Supreme Court against the Standard Bank Offshore Trust Company Limited, over the payment of US$60 million judgement debt to Dominion Corporate Trustees Limited.

The Court, presided by the Chief Justice, Ms Justice Sophia Akuffo, awarded GH¢500,000.00 cost against the two companies represented by the renowned Ghanaian Economist, and investment consultant, Mr Kwame Pianim.

By a unanimous decision, the three-member panel of judges said that Dominion Trustees had no capacity to have initiated the action and that the writ it filed at the High Court against NIB in 2013 which went in its favour, did not indicate that, indeed, it (Dominion Trustee) were the true investors.

Consequently, the court ruled that both judgements by the High Court and the Court of Appeal that bound  NIB to pay US$60 million to Dominion Trustees were nullified, and, therefore, there was no basis for the bank (NIB) to pay the said amount.

Mr Tsatsu Tsikata, lead counsel for NIB asked the court to award GH¢600,000.00 against the plaintiffs, but the Chief Justice after conferring with the other two panel members, Mrs Justice Sophia Adinyira and Mr Justice Anthony A. Benin settled on GH¢500,000.00 in favour of the Bank.

The facts of the case are that, by a collateral Management Agreement dated November 10, 2001, NIB referred to as the 1st Defendant / Appellant / Appellant, Eland International Ghana Limited (2nd Defendant / Respondant) and Eland International Thailand Limited entered into a binding agreement under which Eland International Ghana Limited would order  various commodities from abroad to be supplied by Eland International Thailand on credit.

Under the arrangement, NIB was to hold the Commodities in bond and regulate their sale which led to the creation of an Escrow Account and controlled by the bank into which all monies realised from the commodities were to be paid and remitted to Eland International Limited.

As a result, the bank through its Managing Director, Mr Daniel Charles Gyimah (3rd Defendant / Respondent) entered into a contract in January 26,2007, under Collateral Management Agreement with International CAPS Trading Pte Limited, a Company registred in Singapore and an Affiliate to Eland International Ghana for the promotion of Agricultural Projects in Ghana and would be implemented by the 2nd Defendant (Eland International Ghana) out of which the Company (Eland Ghana) issued 30 Promissory Notes to the value of US$60million.

On May 8, 2007, NIB acting through the then Managing Director,  (Mr. Gyimah) guaranteed per Aval (i.e. irrevocably and unconditionally guaranteed) the 30 Promissory Notes issued by Eland International Ghana, which were discounted by International  Caps Trading Pte Limited (an affiliate of Eland International Ghana) through Iroko Securities Limited to investors of Sphynx Capital Markets PVV and Ticon Trade Management Limited which were represented by Mr. Kwame Pianim (Standard Bank offshore Trust Company Limited).

It was noted that the proceeds from the discount arrangement which was US$45,413,790.00 were paid in two instalments on May 24, 2007, and June 15, 2007 to Ghana International Bank, London, in favour of NIB, whilst all funds under the Promissory Notes were due to be paid by Eland International Ghana Limited on or before January 29, 2009, being the maturity date with an interest rate of 11 per cent per annum to be charged should the 2nd Defendant (Eland International Ghana Limited) default in payment.

However, by the terms of the Aval guarantee, the plaintiff was entitled upon maturity of the Promissory notes, to claim their value directly from NIB without recourse to Eland International Ghana Limited.

When the Notes matured in January 2009, the plaintiff contacted the Ghana International Bank, NIB’s correspondent bank in the United Kingdom and requested that US$60million being the maturity value of the promissory notes but the request was not honoured.

The plaintiff, therefore, decided to demand payment directly from NIB but was told that the bank (NIB) did not know anything about the existence of the 30 promissory notes or the Aval guarantee granted on the bank’s behalf by Mr Gyimah, the former Managing Director.

When persistent demands did not yield any results, the plaintiff filed a writ of summons and statement of claim at the Commercial Division of the High Court on March 4,2010, against only NIB and leaving the other two companies seeking the recovery of the sum of US$60,000.00 being the unpaid guarantee Per Aval granted by the Defendant in respect of Promissory Notes issued by Eland International Ghana Limited and discounted to beneficiaries of the plaintiff and which the said Per Aval Guarantee the Defendant has failed and / or refused to honour upon default by Eland International Ghana Limited despite several and repeated demands.

The plaintiffs also demanded Interest on the said amount at the agreed rate of 11 per cent  per annum
from the 29th day of January 2009 until date of final payment; and Costs.

By Castro Zangina-Tong    

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