Panama-based Islamic Press Agency Inc has mounted an Appeal Court challenge to a High Court decision that it must pay interest, dating back to September 1985, on a mortgage it granted over a property near Slough. The interest now outstrips the debt the mortgage was created to cover.
The judge found that the mortgage on Crown House, Crown Lane, East Burnham, had been created by an oral contract in May 1985 to secure debts in the region of £200,000 owed to Abdullah Al-Wazir, the claimant in the action, by an associated English company, Islamic Press Agency Ltd (IPAL).
The appellant seeks to set aside the judges order in respect of interest, which the court was told now amounted to over £295,000.
In the Court of Appeal, Roger Kaye QC, counsel for the appellant, said that the mortgage had been granted as a security for loans made to, and therefore debts owing by IPAL, which was a separate company.
He also claimed that there was no evidence that there had ever been any agreement that the debt to the claimant should bear interest, and that in the circumstances the mortgage itself should not attract interest payments.
However, Nigel David QC, counsel for the claimant, alleged that at the time the mortgage had been created, IPAL and the appellant had not been distinguished by the parties as separate corporate entities.
He argued that IPAL was liable for interest on its debt on the basis that it entered into an agreement to borrow on terms that security on land be given. That security carried interest, he claimed.
The hearing continues.
Al-Wazir v Islamic Press Agency Inc Court of Appeal (Henry and Robert Walker LJJ and Sir Anthony Evans) 16 July 2001.
Roger Kaye QC and John McCaughran (instructed by Herbert Smith) appeared for the appellant; Nigel Davies QC and Paul Teverson (instructed by Rooks Rider) appeared for the respondent.
PLS News 19/7/01
