Article

Note: To facilitate a sale of rice from an Indian rice merchant, Mr. Mackie-Conteh arranged with the First Merchant Bank of Cypres to issue an LC in its favor. In order to pay the LC fees, Mr. Mackie- Conteh (Mortgagor) borrowed £50,000 from Mr. Kinane (Mortgagee) at a rate of 100 percent to be repaid within 120 days of the transaction being completed and granted a security interest in his residence in the amount of £100,000. The funds were used to pay the cost of two LCs.

When the rice purchase did not materialize because the Seller rejected both LCs, Mortgagor failed to repay the loan and Mortgagee sued to enforce the security agreement. The judgment in favor of Lender for £50,000 was affirmed by the Supreme Court of the Judicature Court of Appeal (Civil Division), Lord Justice Thorpe, Lady Justice Arden, and Lord Justice Neuberger.

[JEB/rlf]

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