The National Investment Bank (NIB) has moved to the Supreme Court to appeal a $60-million judgement entered against it by the Court of Appeal.
The Court of Appeal had, on October 15, 2015, upheld a Commercial Court decision which ordered the bank to pay $60 million plus interest to Dominion Corporate Trustees Limited of Channel Islands, UK.
Interest on the amount takes effect from January 29, 2009 to the date of final payment.
But the bank, in a notice of appeal dated October 16, 2015, is invoking the appellate jurisdiction of the Supreme Court to reverse the decision of the Court of Appeal.
It, therefore, wants the entire judgements at the Court of Appeal and the High Court reversed and counter-claims from the NIB granted.
The Commercial Division of the High Court, presided over by Mr Justice Amadu Tanko, had, on February 21, 2013, given judgement against NIB in favour of Dominion Corporate Trustees Limited of Channel Islands, UK, for the recovery of US$60 million plus interest, with effect from January 29, 2009 to the date of final payment.
But the Court of Appeal, on July 4, 2013, stayed the execution of the judgement of the Commercial Court pending the outcome of an appeal filed by the NIB.
The suit was commenced against NIB by Standard Bank Offshore Trust Company, which was later substituted by Dominion Corporate Trustees Limited, on behalf of investors, who had purchased promissory notes issued by Eland Ghana Limited and 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 $60 million, thereby earning US$15 million in profit.
During the trial, NIB led evidence to show that its Managing Director at the time, Mr Daniel Charles Gyimah, had signed the guarantee without any authorisation from the board.
The bank also led evidence to show that the US$45 million was not utilised for the advertised purpose but rather distributed by Mr Gyimah to Eland Ghana Limited and companies connected to it.
But the Commercial Court held a different view and entered judgement against the bank.
The Court of Appeal, in its latest decision, also upheld the decision of the High Court, thereby prompting the appeal.
Grounds of appeal
The notice of appeal, dated October 16, 2015, is arguing that the judgements of the Court of Appeal and the trial High Court were against the weight of evidence.
The Court of Appeal erred in law when it failed to appreciate that it was Dominion Corporate Trustees, and not the bank, that had the burden of proving its claim about a previous $24-million transaction involving NIB.
According to the appellant, the Court of Appeal and the High Court judge erred in law when they failed to realise “the presumption of regularly contained in Section 142 of the Companies Act, 1963 (Act 179) does not apply to banking transactions that contravene the single obligor limit as contained in Section 42 of the Banking Act 2004 (Act 673)”.
The appellant argued that the Court of Appeal misdirected itself in law when it affirmed the finding of the High Court which saw nothing wrong with the infraction by a former Managing Director of the NIB, Mr Gyimah, who failed to obtain the consent of the bank’s board of directors and that of the Bank of Ghana, pursuant to Section 42 of the Banking Act 2004, Act 673, respectively, did not affect the validity and enforceability of the guarantees per aval Mr Gyimah issued on behalf of the NIB which exceeded the single obligor limit of the NIB at the time it was issued.
It said the Court of Appeal wholly misdirected itself when it affirmed the decision of the High Court upon the ground that all the facts placed before it did not prove fraud or collusion in law on the part of Mr Gyimah and all other participants in the transaction culminating in the suit.
According to the applicant, the Court of Appeal, like the High Court, gave what it termed “scant consideration” to NIB’s counterclaim against Dominion Corporate Trustees Limited and Mr Gyimah and thus erred in dismissing the said counter-claim.
The applicant submitted that the court erred when it affirmed the High Court’s dismissal of NIB’s allegations of fraud and collusion among ELAND International Ghana Limited,
Mr Gyimah and Irroko Securities and International Caps Trading.
“The investors, represented by the plaintiffs, are not holders in due course and the Court of Appeal and the trial High Court erred when they held otherwise,” the notice of appeal stated.
It indicated its intention to file further grounds of appeal upon receipt of the record of the appeal process and judgement.