FBN Bank (UK) Ltd v Leaf Tobacco A. Michailides SA & Ors

FBN Bank (UK) Ltd v Leaf Tobacco A. Michailides SA & Ors

The claimant was entitled to summary judgment for the principal sums due under the facility agreement, as clear events of default had occurred and the amounts were due and owing. The claimant was not entitled to compound default interest, as the agreement did not expressly provide for compounding. The fourth defendant's liability under the personal guarantee was capped at €30 million for principal, with additional liability for default interest at 8% per annum, but not for all interest due by the first defendant beyond the cap.

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 (banking Facility Agreement) / Summary Judgment
Outcome
Summary judgment granted for the claimant against all defendants, with limitations as to interest and guarantee cap.
Legal Topics
Loan Facility Agreement, Guarantee and Indemnity, Default and Acceleration, Summary Judgment, Interest Calculation
Banking and Finance Law Contract Law Loan Facility Agreement Guarantee and Indemnity 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 (banking Facility Agreement) / Summary Judgment

Legal Issues

  1. 1 Whether the claimant is entitled to summary judgment for principal and interest due under a facility agreement and personal guarantee
  2. 2 Whether the claimant is entitled to compound default interest under the agreement
  3. 3 The extent of the fourth defendant's liability under the personal guarantee

Ratio Decidendi

The claimant was entitled to summary judgment for the principal sums due under the facility agreement, as clear events of default had occurred and the amounts were due and owing. The claimant was not entitled to compound default interest, as the agreement did not expressly provide for compounding. The fourth defendant's liability under the personal guarantee was capped at €30 million for principal, with additional liability for default interest at 8% per annum, but not for all interest due by the first defendant beyond the cap.

Court Disposition

Summary judgment granted for the claimant against all defendants, with limitations as to interest and guarantee cap.

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 principal under the personal guarantee.