African Export-Import Bank & Ors v Shebah Exploration & Production Company Ltd & Ors [2017] EWCA Civ 845 (28 June 2017)

African Export-Import Bank & Ors v Shebah Exploration & Production Company Ltd & Ors [2017] EWCA Civ 845 (28 June 2017)

The Facility Agreement was not made on the claimants' written standard terms of business because it was based on a negotiated LMA form with substantial amendments, and there was no evidence of habitual use of such terms by the claimants. Therefore, section 3 of the Unfair Contract Terms Act 1977 did not apply, and the exclusion of set-off and counterclaim was effective. The alleged oral standstill agreement was not binding as negotiations were subject to contract and no concluded agreement was reached.

Citation
[2017] EWCA Civ 845
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 Commercial Court
Outcome
Appeal dismissed
Legal Topics
Unfair Contract Terms Act 1977, Standard Terms of Business, Summary Judgment, Set Off and Counterclaim, Syndicated Loan Agreements
Contract Law Banking and Finance Unfair Contract Terms Act 1977 Standard Terms of Business Summary Judgment Set Off and Counterclaim Syndicated Loan 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 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 the claimants breached an oral agreement not to commence proceedings pending negotiations with Zenith Bank

Ratio Decidendi

The Facility Agreement was not made on the claimants' written standard terms of business because it was based on a negotiated LMA form with substantial amendments, and there was no evidence of habitual use of such terms by the claimants. Therefore, section 3 of the Unfair Contract Terms Act 1977 did not apply, and the exclusion of set-off and counterclaim was effective. The alleged oral standstill agreement was not binding as negotiations were subject to contract and no concluded agreement was reached.

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.