FBN Bank (UK) Ltd v Leaf Tobacco A. Michailides SA & Ors [2017] EWHC 3017 (Comm) (20 November 2017)

FBN Bank (UK) Ltd v Leaf Tobacco A. Michailides SA & Ors [2017] EWHC 3017 (Comm) (20 November 2017)

The claimant is entitled to summary judgment for the principal sums outstanding under the facility agreement against the first three defendants and for €30 million against the fourth defendant under the personal guarantee. Default interest is to be calculated on a simple, not compound, basis. The liability cap in the personal guarantee applies to principal and interest, but default interest at the guarantee rate is recoverable in addition to the cap.

Citation
[2017] EWHC 3017 (Comm)
Parties
Claimant: FBN Bank (UK) Limited; First Defendant: Leaf Tobacco A. Michailides S.A.; Second Defendant: Leaf Tobacco A. Michailides A.D.; Third Defendant: Mika Korca SH.A.; Fourth Defendant: Alexandros Michailides
Jurisdiction
England and Wales
Judgment Date
20 November 2017
Procedural Posture
Commercial Claim (summary Judgment Application) / Judgment on Summary Judgment Application
Outcome
Judgment for the claimant (summary judgment granted)
Legal Topics
Loan Agreements, Guarantees, Default and Acceleration, Summary Judgment, Interest Calculation
Banking and Finance Law Contract Law Loan Agreements Guarantees Default and Acceleration Summary Judgment Interest Calculation

Case Brief

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Parties

FBN Bank (UK) Limited

Claimant

Leaf Tobacco A. Michailides S.A.

First Defendant

Leaf Tobacco A. Michailides A.D.

Second Defendant

Mika Korca SH.A.

Third Defendant

Alexandros Michailides

Fourth Defendant

Procedural Posture

Commercial Claim (summary Judgment Application) / Judgment on Summary Judgment Application

Legal Issues

  1. 1 Whether the claimant is entitled to summary judgment for principal and interest under a facility agreement and personal guarantee
  2. 2 Whether default interest is to be calculated on a compound or simple basis under the agreement
  3. 3 Scope of the liability cap in the personal guarantee

Ratio Decidendi

The claimant is entitled to summary judgment for the principal sums outstanding under the facility agreement against the first three defendants and for €30 million against the fourth defendant under the personal guarantee. Default interest is to be calculated on a simple, not compound, basis. The liability cap in the personal guarantee applies to principal and interest, but default interest at the guarantee rate is recoverable in addition to the cap.

Court Disposition

Judgment for the claimant (summary judgment granted)

Orders

  • Judgment for the claimant against the first three defendants for €142,658,677 principal under the agreement
  • Judgment for the claimant against the fourth defendant for €30,000,000 under the personal guarantee