2Ecobank v Ituze (english)

2Ecobank v Ituze (english)

- Source: Amategeko - Section: Decisions (Judgements) - Date: 2013-10-23 - Case/document no.: RCOMA 0113/11/CS - Collection: Supreme Court

Text

Page 1

Ecobank rwanda v. Ituze [Rwanda SUPREME COURT – 2013SC – RCOMA 0113/11/CS (Kayitesi R, P.J., Mukandamage and Kanyange, J.) October,23 2013] Commercial laws– loan –the validity of a contract which is not signed by one of the parties – withdraw money from the account without any contract – the way of determining damages – the law of July 30,1888 instituting the third book of civil law related to contracts and contractual obligations, art.66. Jurisdiction – the proof that the appeal was made late– Organic law n°01/2004 of January 29, 2004 regulating organization, functioning and competence of the Supreme Court. Facts: The appellant in the Supreme Court was defendant in the Commercial High Court where he was accused to have unduly withdrawn an amount of money from the account of defendant. The Commercial High Court has ruled that the appellant has unjustifiably withdrawn 11.400.000Rwfrs from the account of the respondent. The Court ordered the appellant to return back money with damages of 3.000.000Rwfrs. In his appeal to the Supreme, the appellant says that the Commercial High Court did not motivate its judgment, he continues saying that the decision of the Court was not based on any truthful evidence and that the damages that the Court gave to the respondent was based on the fact that the appellant have had withdrawn money on the account of respond which is not true. In the

submissions of the respondent, he raised a preliminary objection of non-admissibility of the appeal because it was late. Held: 1 Basing on the fact that the appellant was not present during the pronouncement of the judgment, the Court cannot say that the appeal was late. There is no any evidence that the parties have been informed of the date of the pronouncement, neither in the file-case there is any statement adjourning the pronouncement on that day, all that mean that the respondent has never been informed about the date of pronouncement of the case he is appealing against.

2. The document called “preliminary term sheet” even in the contract itself is executed when both parties agreed on the content and sign, when one part does not sign it is a proof that he does not accept the content of the contract 3. On January 1,2010 on the bank account of the respondent there was 245.520Rwfrs, and on January 29,2010 on the same account the appellant withdrawn 11.400.000Rwfrs for the analysis of the file of the respondent while he could not be charged with that money 4. Damages are allocated basing on the subject-matter and the appreciation of the Court. Appeal allowed in part; Counterclaim is without merit; The appellant shall give back 11.400.000Rwf on the respondent’s account No. 106- 08202801-21 so that the situation should be as it was before the withdrawal; The court fees charged to the appellant.

Page 2

Statutes and statutory instruments referred to: the law of July 30,1888 instituting the third book of civil law related to contracts and contractual obligations, article.66. Organic law n°01/2004 of January 29, 2004 regulating organization, functioning and competence of the Supreme Court, article47 No cases referred to Judgement I.

BRIEF BACKGROUND OF THE CASE [1] ITUZE Ltd applied for a loan of 2.000.000 $ in ECOBANK, but at the time of signing the contract ITUZE Ltd said that the content of the contract was different from what they have agreed on in the “preliminary term sheet” and it did not sign. After, ECOBANK written a letter to ITUZE Ltd telling it that it had to pay 11.400.000Rwfrs for the analysis of their dossier not later than January 31, 2009 and on January 29, 2009 ECOBANK withdrawn that amount from the account of ITUZE Ltd. [2] Having asked ECOBANK to deposit back that money on their account but in vain, ITUZE Ltd sued the case to the Commercial High Court as it has been explained above, and the Court has ruled that the ECOBANK has unjustifiably withdrawn 11.400.000Rwfrs from the account of ITUZE Ltd. The Court ordered the appellant to return back money with damages of 3.000.000Rwfrs. [3] The Commercial High Court based its decision on the art.66 Civil Code, book three and explained that the loan contract prepared by ECOBANK provided for the obligation for ITUZE Ltd to pay the analysis of dossier fees but ITUZE Ltd refused to sign and ECOBANK didnot execute the contract. Therefore, there is no any reason for the Court to decide that the contract might be executed only for the part regarding the obligation of ITUZE Ltd to pay the dossier analysis fees unless ECOBANK proves that there was a

special agreement that ECOBANK could prepare the contract and ITUZE Ltd should pay that fees even if the loan was not guaranteed. [4] The Court found that the damages requested by ITUZE Ltd have grounds because ECOBANK has unjustifiably withdrawn money from ITUZE Ltd’s account and in the appreciation of the Court ITUZE Ltd could be given the damages of 3.000.000Rwfrs comprising damages for moral loss,damages for expected interest, cost of the proceedings and counsel’s fee. [5] ECOBANK Rwanda S.A appealed that decision to the High Court and says that the Commercial High Court did not motivate its judgment, he continues saying that the decision of the Court was not based on any truthful evidence and that the damages that the Court gave to the respondent was based on the fact that the appellant have had withdrawn money on the account of respond which is not true.

Page 3

[6] In the submissions responding to those of ECOBANK, ITUZE Ltd raised a preliminary objection of non-admissibility of the appeal because it has been done out of the time limit. [7] The hearing was scheduled on September 17, 2013, ECOBANK Rwanda was represented by Counsel Nkundabarashi Moïse, and ITUZE Ltd was represented by Counsel Nkurunziza Jean Pierre. II. THE LEGAL ISSUE TO BE EXAMINED IN THE CASE AND

ITS ANALYSIS 1. To know if the appeal of ECOBANK was done out of the time-limit so that it cannot be admissible. [5] The Counsel of ITUZE Ltd says that the appeal of ECOBANK was lodged after the running out of the one month time-period provided for by the art. 163 Code of civil procedure, so that according to him the appeal is not admissible. He explains that the judgment which is the subject of the appeal was pronounced on June 24, 2011 and ECOBANK l appealed in August while the last day of one month time-period was July 23, 2911. Additionally he says that ECOBA NK had an obligation of knowing the date of pronouncement. Therefore it is in his view that the appeal should not be admissible basing on the provisions of art. 94 Code of Civil Procedure. [6] On his side, the Counsel of ECOBANK says that the judgment was not pronounced on the date that the court has had communicated to the parties as it is mentioned in the judgment itself it has been pronounced with a delay, so it means that ECOBANK did not know the date of pronouncement. It has known that date when it bought the copy of the judgment and immediately it appealed against the judgment.

THE VIEW OF THE COURT [7] Art.47 of the Organic Law No. 01/2004 of January 29, 2004 regulating the organization, functioning and competence of the Supreme which was into force when ECOBANK filed the appeal provides that an appeal must be filed within a period of one month from the pronouncement of the judgment with respect to a party that was present or represented at the pronouncement of the judgment. Such time limits shall apply to a party duly notified of the date of judgment but fails to appear or to send a representative. The same art. provides that for a party who was not informed of the date of pronouncement, the period is considered from the date he is notified of the judgment by a court clerk or the bailiff. [8] The file shows That the case on appeal was supposed to be pronounced on 03/06/2011 but it was pronounced on 24/06/2011 without parties, no any evidence that parties have been informed of the date of the pronouncement, neither in the file-case there is any statement adjourning the pronouncement on that day, all that mean that the respondent has never been informed about the date of pronouncement of the case he is appealing against

Page 4

[9] furthermore, no written document in the file showing that ECOBANK was informed about the case on appeal accordingly to article stated above ,therefore the court cannot held that the appeal was late.

2. To know if the court failed to motivate the grounds and to know also if there was no withdrawal made on ITUZE ltd accounts [10] The counsel representing the interest of ECOBANK Rwanda says that the court ordered Ecobank Rwanda to pay back the amount of 11,400,000 Rwf without motivating the grounds on which the court based. [11] He adds that the court held that ECOBANK withdrew arbitrarily the amount of 11.400.000 Rwf on the account of ITUZE Ltd and that is in conradiction with the « bank statement » of that account which shows that there was no withdrawal made. He explains by saying that the bank statement shows that on 29/01/2011 was put in negative due to the fact that there was no money banked on it, meaning that the bank wanted to withdraw an amount of 11.400.000 Rwf to pay itself but unfortunately the Bank found only 245,520 Rwfw. So if the court had to decide to bring back the money, it would have been 245,520 Rwf because this was the amount banked on the account, but the court oredered Ecobank to pay back an amount of 11.400.000 Rwf. [12] The counsel representing the interest of ITUZE Ltd says that the court in taking a decision motivated very well the ground on which the decision was based. He adds that apart from saying only words, the counsel representing the interest of Ecobank is showing any default from the previous judgement. [13] As regards the amont withdrwan

on the account of Ku ITUZE Ltd, its counsel says that it is the first time for Ecobank to raise this issue. neither in previous herarings nor in prejudiciairy correspondances made, Ecobank never disagree to have withdrawn the amount on the accont of ITUZE ltd, they only said that the money withdrwaew was for following up the case. [14] After being asked the sum which was on the account of ITUZE ltd before the bank withdrwaw 11,400,000 Rwf, counsel Nkurunziza responded that there was 254.520 Rwf, and that now is requesting Ecobank to cancel the operation it carried out and then pay back the amount of 245,520 Rwf on the account of ITUZE ltd.

THE VIEW OF THE COURT [15] As explained by the Commercial High court, the amount for following the loan case,was provided in the statement named ‘’preliminary term sheet’’ and in the contract itself which had to be implemented by the contracting parties after consenting to the terms and conditions of the loan contract. [16] As agained explained in the appellate case, ITUZE Ltd have never signed the loan contract prepared by Ecobank and i twas from this contract that Ecobank had to base and request ITUZE ltd to execute its contractual obligations including case followup fees.

Page 5

[17] The court finds that, apart from saying that no motivation was made, ECOBANK has no grounds to justify that its request to compel ITUZE Ltd to pay the amount of money for following the case, and yet as explained above, the contract on which Ecobank had to base in claiming the money was not implemented due to the lack one party’s consent. [18] To know if there’s some amount of money removed from the account of ITUZE Ltd, ‘’the bank statement’’ of 01/01/2010 of that account shows that the banked amont was 245.520, and the counsel representing its interests confirmed that before the court. It is clear also that on 29/01/2010 the amount of 11.400.000 was withdrawn from the account of ITUZE ltd as ‘’ case followup fees ITUZE Club Hotel’’, that led ITUZE ltd to be in negative because the remaining amount was –11.154.480 Frw. [19] It is clear that despite the insuffient amount on the accont ITUZE Ltd, it cannot be considered as if no amount was withdrawn from the account of ITUZE ltd by ECOBANK as said by its counsel. The ‘’operation’’ carriedout 29/01/2010 removed 245.520 Rwf on the accont of ITUZE Ltd, and led it to become a debtor of 11.154.480 Rwf. So as no amount that Ecobank had to remove on from the account of ITUZE ltd as explained above, ECOBANK Rwanda must deposit the amount of 11.400.000 Rwf on the account of ITUZE ltd (under good date value), ao that the accounts regain its normal status before the withdrawal, that is to say the amount of 245,520 Rwf should appear on that account (credit balance).

3. To know if the damages awarded to ITUZE ltd were pronounced without proof. [20] The counsel representing ECOBANK Rwanda says that the court pronounced an award of damages amounting to avuga ko urukiko rwageneye 3.000.000 Rwf because the Bank withdrew the amount of money of following the loan file, the court faled to show the proof on which they based in awarding that amount, the court exoplains only that it was orderd in its discretion. [21] The counsel representing ITUZE Ltd says that those damages are based on the fact that Ecobank removed some amount of money from the account of ITUZE ltd. The counsel adds that they requested an award of 19,000,000 Rwf and the court awarded 3,000,000 Rwf in its discretion.

THE VIEW OF THE COURT [22] In awarding damages amounting to 3.000.000 Frw to ITUZE Ltd , the court explained that the basis is the conduct of Ecobank of removing without authorization an amount of 11.400.00 RWF from the account of ITUZE ltd, and explained again, that damages are awarded in its discretion and they are including moral dammages, economic damages and fees for following the case and that of the counsel, and that the request of ITUZE ltd of dammages amounting to 19,000,000 Rwf has no proof. [23] It is clear that even the court found that ITUZE Ltd failed to provide evidence prooving the amount requested. so, the court should not award dammages provided that there was no proof and suprisingly what the court awarded did not show the way they were calculated and their basis and yet they they in different categories. At the appeal level also, the counsel of ITUZE Ltd

Page 6

failed to poove the basis of the damages requested and the way they are calculated but in vain, he only said that they are based on the Ccobank’s bahavior of withrawing money fron the account of ITUZE ltd without authorization. So, those damages should be overturned.

4. As regards the amount requested by ITUZE Ltd in counter claim. [24] Incounter claim made over that of Ecobank, the counsel representing ITUZE requests an award of 3.000.000 Rwf including advocate fees, economic dammages, and the amount for following the case because the conduct of Ecobank led them to hire a legal counsel. [25] The counsel representing the interest of ECOBANK says that the damages requested by ITUZE Ltd are baseless because they failed to provide evidences. It should show the contract between them and the counsel and the show the way they calculate the economic damages.

THE VIEW OF THE COURT [26] The court finds that the economic damages included in 3,000,000 Rwf as requested by the counsel of ITUZE ltd, cannot be granted because they failed to show their basis and the way thy are calculated. But as regard the counsel fees including also in 3,000,000 Rwf as requed by ITUZE Ltd , the court finds that they should not be granted because there some issues won in appeal by ECOBANK. III.THE DECISION OF THE COURT [27] Decides that the appeal brought by ecobank has grounds on some issues; [28] Decides that the counterclaim brought by ITUZE Ltd has no basis; [29] Orders ECOBANK Rwanda to pay back on the account nº 106-08202801-21 of ITUZE Ltd 11.400.000 Rwf, to regain its status before the withdrawal; [30] Orders ECOBANK Rwanda s.a to pay 28.100 Rwf as court fees, failure to do so in eight days, it will be seized by force using the power of the government.