African Export-Import Bank & Ors v Shebah Exploration & Production Company Ltd & Ors

African Export-Import Bank & Ors v Shebah Exploration & Production Company Ltd & Ors

The defendants failed to show a realistic prospect of establishing that the Facility Agreement was made on the claimants’ written standard terms of business, given substantial negotiation and lack of habitual use, so section 3 of the Unfair Contract Terms Act 1977 did not apply; the exclusion of set-off and counterclaim was effective, and there was no binding oral agreement precluding litigation.

Parties
Respondent/claimant: AFRICAN EXPORT-IMPORT BANK; Respondent/claimant: DIAMOND BANK PLC; Respondent/claimant: SKYE BANK PLC; Appellant/defendant: SHEBAH EXPLORATION & PRODUCTION COMPANY LIMITED; Appellant/defendant: ALLENNE LIMITED; Appellant/defendant: DR AMBROSIE BRYANT CHUKWUELOKA ORJIAKO
Jurisdiction
England and Wales
Judgment Date
28 June 2017
Procedural Posture
Civil Appeal / Appeal From Summary Judgment in the High Court (commercial Court)
Outcome
Appeal dismissed
Legal Topics
Unfair Contract Terms, Standard Terms of Business, Summary Judgment, Set Off and Counterclaim, Guarantees, Facility Agreements
Contract Law Banking and Finance Unfair Contract Terms Standard Terms of Business Summary Judgment Set Off and Counterclaim Guarantees Facility Agreements

Case Brief

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Parties

AFRICAN EXPORT-IMPORT BANK

Respondent/claimant

DIAMOND BANK PLC

Respondent/claimant

SKYE BANK PLC

Respondent/claimant

SHEBAH EXPLORATION & PRODUCTION COMPANY LIMITED

Appellant/defendant

ALLENNE LIMITED

Appellant/defendant

DR AMBROSIE BRYANT CHUKWUELOKA ORJIAKO

Appellant/defendant

Procedural Posture

Civil Appeal / Appeal From Summary Judgment in the High Court (commercial Court)

Legal Issues

  1. 1 Whether the Facility Agreement was made on the claimants’ written standard terms of business within section 3 of the Unfair Contract Terms Act 1977
  2. 2 Whether the defendants could set off alleged counterclaims against their liabilities under the Facility Agreement and Personal Guarantee
  3. 3 Whether proceedings were brought in breach of an oral agreement to refrain from litigation pending negotiations with Zenith Bank

Ratio Decidendi

The defendants failed to show a realistic prospect of establishing that the Facility Agreement was made on the claimants’ written standard terms of business, given substantial negotiation and lack of habitual use, so section 3 of the Unfair Contract Terms Act 1977 did not apply; the exclusion of set-off and counterclaim was effective, and there was no binding oral agreement precluding litigation.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed.
  • The Appellants shall pay the Respondents’ costs of the appeal on the standard basis, to be assessed by detailed assessment if not agreed.