[2018]DLHC3854 • June 28, 2018 • High Court
THE ROYAL LIMITED vs. UNITED STEEL AND TRADING CO. LTD AND 2 OTHERS
The Plaintiff, THE ROYAL LIMITED, granted a banking credit facility amounting to USD 7,330,000 to the 1st Defendant, UNITED STEEL AND TRADING CO. LTD, secured by personal guarantees from the 2nd and 3rd Defendants (directors) and other securities. The loan included a short-term loan of USD 3,665,000 with an interest rate of 32.5% per annum, repayable within 60 days from business proceeds. Despite demands, the Defendant failed to repay the principal sum of Gh¢34,371,189.29 and interest accruing at a compound rate of 42.5% per annum. The Defendants admitted the loan but challenged the 10% default compound interest rate as harsh and cited operational difficulties including power outages and fire, claiming an agreed extension of repayment time with the Plaintiff.
read morePlaintiff claims the following reliefs endorsed on its writ issued against the defendant: a. Recovery of the sum of Thirty-Four Million, Three Hundred and Seventy-One Thousand, One Hundred and Eighty –Nine Ghana Cedis and Twenty-Nine Pesewas Gh¢34,371,189.29 b. Recovery of interest on the said sum, at the contractual default compound interest rate of 42.5% per annum accruing from day to day and compounded monthly till date of final payment c. Cost including legal fees on a full indemnity basis d. Such further order(s) as the court may deem fit. The factual basis for the claim of the Plaintiff can be summarized as follows: That Defendant by a board resolution resolved to request banking credit facility from the Plaintiff Bank. And by a deferred letter of credit Plaintiff granted an amount of USD$7,330,000.00 to the 1st Defendant institution for which 2nd and 3rd Defendants being directors of the 1st Defendant gave personal guarantees among other securities for the due re...