STATE LOSES CASE TO NDK FINANCIAL SERVICES (PAGE 46, OCT 5)

THE Commercial Division of the Accra High Court has ordered the state to pay GH¢602,609.50, with interest at the contractual rate of five per cent from July 1, 2007, to NDK Financial Services for the breach of a contract by the Ghana Prisons Service when it declined to purchase combat boots from the Apex Consulting Services.
The court, presided over by Mrs Justice Margaret Welbourne, also awarded costs of GH¢50,000 against the state, which was represented by the Attorney-General.
The Prisons Service, in December 2005, contracted Apex Consulting Services, an Accra-based consulting firm, to supply 5,310 pairs of combat boots, valued at GH¢308,378.25, for use by prison officers.
Following the arrangement, Apex applied for a loan facility from NDK Financial Services to cover the cost of procuring the boots.
As a condition for the approval of the facility, the Prisons Service agreed to serve as a guarantor for the payment of the contract sum.
The guarantee was made under the condition that the service would pay the contract sum in the joint names of NDK Financial Services and Apex, but when the boots arrived at the Tema Port in September 2006, the service failed to take delivery of them, with the excuse that the boots were to be purchased from a different source.
As a result, Apex was unable to repay the loan as arranged, compelling NDK Financial Services to sue both Apex and the Attorney-General, praying the court to order the payment of GH¢602,609.50, being the purported balance on the loan as of June 30, 2007, interest at the rate of five per cent per month and additional costs.
The court held that the evidence before it indicated that the service did not take delivery of the boots and, therefore, it did not pay Apex to enable it to meet its obligations to NDK Financial Services.
It said the argument by the Prisons Service that Apex failed to supply the boots within 90 days was untenable because it did not find, on the face of the contract, any time or deadline for the delivery of the boots.
Furthermore, the court held that the argument by the Attorney-General that Apex was required to communicate acceptance or execute some documents, while in another breath alleging that there was a contract but Apex failed to deliver within the specified time, was untenable.
The court held that the boots were available for inspection and delivery but the Prisons Service failed to carry out the inspection, while no place was designated by the service for the delivery to be effected.
"Even when samples were delivered to them, they refused to act," the court held, and added that the defendant did not deny that it prepared a guarantee for Apex for the purpose of obtaining the facility to import the boots that the service had contracted Apex to supply.