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Interpretation – wording of a loan agreement found to be unambiguous

The Facts

Borrowers borrowed a large sum of money to finance a capital project in Sierra Leone. 

The loan agreement provided for a high rate of interest and repayment of the loan after two years.

 The agreement contained a provision that the borrowers were obliged to repay the full loan in the event of the loan being refinanced.

 Another provision of the loan was to the effect that if the loan was repaid in full or in part within the first year a pre-payment fee of 6% was to be paid.

 The debt was refinanced by the parent company of the borrower by entering into a refinancing arrangement with another lending institution.  The loan was then repaid in full pursuant to the refinancing of the provision referred to above.

 Because the refinancing was a voluntary exercise, lenders argued that the prepayment fee was payable.


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