CIA Barca de Panama S.A. v George Wimpey & Company Ltd (No.1)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STEPHENSON |
| Judgment Date | 09 October 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J1009-1 |
| Docket Number | 1977 C. No. 5020 |
| Court | Court of Appeal (Civil Division) |
| Date | 09 October 1979 |
[1979] EWCA Civ J1009-1
In The Supreme Court of Judicature
Court of Appeal
On Appeal from The High Court of Justice
Queen's Bench Division
Commercial Court
Lord Justice Stephenson
Lord Justice Bridge
MR A. IRVINE, Q.C. and MISS. P. BAXENDALE (instructed by Messrs. Herbert Smith & Company) appeared on behalf of the Appellants.
MR J. TACKABERRY (instructed by P.J. Ward, Esq., Solicitors, London) appeared on behalf of the Respondents.
There is a dispute between the parties ("Barca" and "Wimpey") about the interest payable on the amount awarded Barca under Promissory Note No, 2, which was incorporated in the Purchase Agreement of 9th November, 1972, and held by our judgment of 25th July on the preliminaryissue to have been payable on 9th November, 1977.
Interest is admittedly payable on the amount of U.S. $3,500,000 at the rate of 7 per cent per annum from 9th November, 1972 to 9th November, 1977. Interest is admittedly payable also under Section 17 of the Judgments Act 1838, both on that principal sum and on that interest (amounting to U.S. $1,725,000), at the statutory rate for judgment debts from 25th July, 1979 (which appears to be the date of entering up our judgment: Parsons -v- Mather & Piatt Limited. (1977) 1 Weekly Law Reports, 855) until the judgment has been satisfied. It is the intermediate period from 9th November, 1977 to 25th July, 1979 about which two questions have been argued.
It is admitted by Wimpey that interest is payable on the principal sum of U.S. $3,500,000 during that period at the rate of 7 per cent per annual. But Barca raised two questions (1) whether interest is not payable on the total amount of principal and interest, U.S. $4,725,000, during that period, and (2) if payable on either sum, at what rate above 7 per cent per annum.
After hearing throughout the last day of last sittings interesting arguments, mostly directed to the first question, we took time to consider our judgment and had prepared one deciding both questions. But we have been informed by letter from Barca's solicitors dated 17th September that they had been instructed to withdraw the claim for interest on the interest element of U.S. $1,250,00 and now limit their claim to the amount of interest to be awarded on the principal amount of U.S. $3,500,000. Accordingly, we no longer have to determine the first issue, which took up most of the Court's time and is of some general importance, but proceed to decide the second issue, which is still in contention: What is the appropriate rate at which interest should be paid on the sum of U.S. $3,500,000 during this period? Should it be only 7 per cent per annum, or should it be at some, and what, higher rate?
Mr. Lincoln argued that it should be at the London inter-bank offered rate ("LIBOR") plus 2 per cent. According to the affidavit evidence of M. Augrain. the Deputy Manager of Banque Nationale de Paris, Panama City Branch, ("B.N.P."):- "B.N.P. has acted as bankers for CIA Barca De Panama S.A.("Barca") since about1970, and the borrowings and deposits by Barca with B.N.P, have been in Eurodollars. In the period from 1977 to date its borrowings have normally been at a margin of 2 per cent over the Eurodollar London Inter-Bank Rate for the period concerned. 2 per cent spread over the London Inter-Bank Rate is a normal rate applied to private customers of this Bank of B.N.P".
Mr. Justice Robert Goff on different evidence awarded a plaintiff LIBOR plus 1 per cent in B.P. Emploration Company -v- Hunt (1979) 1 Weekly Law Reports 783, 849-850. Mr. Lincoln submitted that on this...
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