A five-member Supreme Court Panel has dismissed an application by Dominion Corporate Trustees Limited seeking to compel the National Investment Bank (NIB) to pay a judgment debt of $91 million.
The panel headed by the Chief Justice, Sophia Akuffo, delivered its judgment today to overturn a lower court’s ruling against the bank.
The Supreme Court stated the applicants lack locus standi to institute the court action in the first place and that the decision of the high court that awarded the judgment debt was wrong as it had no grounds in law.
The court further awarded a cost of 500,000.00 Ghana Cedis in favour of the National Investment Bank.
The suit was commenced against NIB by Standard Bank Offshore Trust Company (substituted later by Dominion Corporate Trustees Limited) on behalf of investors who had purchased promissory notes issued by Eland Ghana Limited and allegedly guaranteed by NIB.
Under the terms of the transaction, the investors had to pay a discounted total sum of US$45 million in May 2007, and upon maturity of the promissory notes on January 29, 2009 reap US$60million, thus, earning US$15million in profit.
During the trial, NIB led evidence to show that its Managing Director at the time, Mr Daniel Charles Gyimah, signed the guarantee without any authorisation from the board and said indeed the transaction was known only to Mr Gyimah.
The Bank also led evidence to show that the US$45million was not utilised for the advertised purpose but was rather distributed by Mr Gyimah to Eland Ghana Limited and companies connected to it.
Other beneficiaries were Iroko Securities Limited, London, as well as private individuals, including Mr Gyimah’s son, Stephen.
The largest beneficiary was Sphynx Limited, USA, which was given US$24 million. It also emerged that Sphynx Limited was a fully owned subsidiary of Iroko Securities Limited.
In the counter claim, the bank joined Mr Gyimah, who according to the NIB, did not have the mandate to authorise the promissory note. Also joined to the counter claim was Eland International Ghana Limited.
But the court, in its February 21, 2013 judgement, held a contrary view; declared NIB liable and ordered it to pay the $60 million, with 11 per cent interest, with effect from January 2009 till the day of final payment.
In a notice of appeal dated March 1, 2013, the bank held that the trial judge erred in law when he excluded from evidence which clearly demonstrated that Iroko Securities Limited, the plaintiff’s arrangers of the discounting of the impugned promissory notes, knew that Mr Gyimah lacked the requisite authority to bind the NIB in a $60 million transaction, and that exclusion of evidence has resulted in a substantial miscarriage of justice.
According to the bank, the trial judge erred in law when he dismissed the defence as not having been proven beyond reasonable doubt.
An affidavit in support of the motion for stay of execution deposed by the Head of Legal of the NIB, Mr Michael Amarfu-Dey, said the court’s findings that the bank failed to cross examine a witness with respect to disbursement of $24 million from the promissory notes was not supported by the evidence on record.
It said apart from the fact that the NIB’s appeal stands a high chance of success, the Dominion Corporate Trustees, “just like its predecessor, Standard Bank Offshore Trust Company Limited, as per the endorsement on its Writ and Statement of Claim, is an offshore company registered and operating in Jersey, Channel Islands, a jurisdiction renowned for its secret legal arrangements to shield companies from taxes and the attachment of their assets.”
The NIB’s application for stay of execution followed the NIB’s dissatisfaction with the outcome of the High Court’s May 14, 2013 order which ordered the bank to deposit $45million as a condition for the grant of stay of execution pending the outcome of the appeal.
The bank, through its lawyers, Anyadi & Associates and Ayine & Felli, later applied to the Court of Appeal for a stay of execution of the lower court’s orders.
Court of Appeal Order to NIB
In considering the application for stay, the Court of Appeal on June 25, 2013 directed the bank to file an affidavit detailing the bank’s assets amounting to $45 million to which the bank obliged.
Following the filing of the said bank assets which had an attachment of an affidavit sworn to by the Deputy Managing Director and acting Managing Director of the NIB, Mr Tei Kwapong, the court subsequently granted the request for stay of execution.
The court’s decision was also premised on the fact that counsel for the respondents, Nene Amegatcher had given consent after the NIB had sworn an affidavit and attached its assets valued not less than $45million.