Supreme Court Overturns $60m Judgement Against NIB

The Supreme Court (SC) sitting in Accra, yesterday overturned the ruling of the Court of Appeal, which affirmed an earlier one delivered by the High Court also sitting in Accra, which ordered the National Investment Bank (NIB) to pay Dominion Corporate Trustee Limited $60 million. Counsel for the applicant, Tsatsu Tsikata, prayed the court to award his client a cost of GH¢600,000, but the judges settled on GH¢500,000, after listening to the plea of the counsel for the respondent.

The NIB was sued in 2010 by a foreign entity, Standard Bank Offshore Trust Company Limited, which was later substituted by Dominion Corporate Trustees Limited. The case was heard and judgment delivered on February 21, 2013, in favour of the plaintiffs (Dominion Corporate Trustees Limited), where the NIB was ordered to pay $60 million with interest at 11% percent per annum, starting from 2009 to the final date of payment.

According to NIB, the debt arose from a fraudulent promissory note transaction carried out in 2007, with the connivance of the then Managing Director of the bank. It further stated that the transaction did not reflect in any of the books of the bank, and was done on the blind side of the Board of Directors.

Speaking to the media after the ruling, the Head of the Legal Department of the NIB, Robert Kpatsa, indicated that the bank had confidence it would win the case at the Supreme Court, after having carefully examined the judgement of the High Court, which was affirmed by the Court of Appeal.

Describing the Supreme Court ruling as a 'technical knock-out', the lawyer remarked that the bank had been vindicated. Giving the judgement, the court said the writ brought to court by the respondent (Dominion Corporate Trustees Limited), upon which the ruling was given in their favour, was not proper to the rules of court.

Commenting on whether or not the case was over, the Mr. Robert said: “As far as we are concerned, the case is over, because the court said that the writ that was issued at the High Court was a nullity, was void, and, therefore, all consequential things that followed were also void. The High Court judgement has been set aside; the Court of Appeal's judgement has been set aside.”

The SC unanimously overturned the decisions of the High Court and Appeal Court, after carefully reviewing the judgements of the latter, on the heels of the application by the 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$60 million, thus 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, 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 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 full- owned subsidiary of Iroko

In the counterclaim, the bank joined Mr Gyimah, who according to the NIB, did not have the mandate to authorise the promissory note. Also, joined to the counterclaim was Eland International Ghana Limited.

By Maxwell Ofori