Elias Hwenka (2) Mercy Hwenka (3) Kenneth (4) Prince Nyemba (5) A. P. Phillip and Company (Private) Limited v FBC Bank Limited

[2017] ZWSC 36

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Case Details

Court

Supreme Court

Date

2 March 2017

Citation

[2017] ZWSC 36

Judgment No.

SC 36/21

Outcome

unknown

Case Type

Appeal

Bench

Presiding

Gwaunza JA

Author

Mavangira JA

Full Bench

Gwaunza JAPatel JAMavangira JA

Areas of Law

Banking & FinanceCommercial LawSuretyship Law

Keywords

SuretyshipNovationCompromiseBanking facilitiesGuarantee agreementScheme of arrangement

Key Issues

{"issue_text":"Whether the compromise agreement resulted in a novation of the deeds of suretyship, thereby extinguishing the appellants' obligations as sureties","issue_type":"law","dispositive":"yes","related_facts":"Scheme of arrangement entered after default; guarantees contained anti-novation clauses"}

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Facts of the Case

Background

The appellants, as directors of United Builders Merchants (Pvt) Ltd, signed guarantees for a $1 million loan facility from FBC Bank. After UBM defaulted and entered a scheme of arrangement with creditors, the bank sued the guarantors who argued they were discharged by novation through the compromise agreement.

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