‘Uphold interest rate agreements between parties’

The Head of Chambers and lecturer at the Faculty of Law of the University of Ghana, Mr Godwin Djokoto, has urged courts to uphold and give effect to interest rates captured in agreements between borrowers and lenders.

According to him, the courts must not make new contracts for the parties in court and where there was no agreement, the law must be applied.

Speaking at  a forum for the Users Committee of the Commercial Court and some members of the business community in Accra, he said the payment of interest rate must be by agreement and not automatic.

“The role of the court is to give intent to the true manifest of the contract between parties and not to make new contracts for them, except when as provided by law. So when parties have themselves entered into contract, that is what should prevail. The court is only going to look at whether it is obvious from the contact. It is not for the court to make contracts for the parties.

“Contracts are voluntarily agreed and, therefore, once you enter into it, you are bound by it. The court cannot substitute your contract, except otherwise invited by law,” he said.

The Commercial Court (CC) of the Judiciary Service is a specialised division of the High Court inaugurated in 2005,­ for the exclusive resolution of commercial disputes.

It has a mission to promote efficient justice delivery to promote trade and investment.

Mr Djokoto said legislative instruments (LIs) such as the Loan Recovery Act, 1918, Act 175, gave the court the power to reopen transactions, particularly when the court thought that the transaction was onerous and could then apply that to relieve the party.

However, he said, unless there was evidence to the contrary, interest was not exigible on money lent in a social context such as between spouses, friends and siblings.

The President of the Commercial Court, Mrs Justice Barbara Ackah-Yensu, said the forum, on the theme, “Developments in Legislation, Jurisprudence and Public Policy in Interest Rates”, was to analyse public perception of operations of the CC and devise solutions.

The Assistant Director of the Legal Department of the Bank of Ghana, Mrs Comfort Ahwoi, said one of the functions of the BoG was to regulate, supervise and direct the banking and credit system to ensure the smooth operation of the financial sector.

By Ama Amankwah Baafi/Daily Graphic/Ghana