In the world economy, countries as well as organisations refer to borrowing to cover the deficit in their balance of payment whereby they contract loans with many lenders through a syndicated loan due to the fact that the targeted project exceeds the lending limit of one bank. The formation of a syndicate commences with the borrower granting a mandate to a bank or group of banks which is referred to as Lead bank or arranger and the latter mandate authorizes the formation of a syndicate for a named purpose on certain terms and conditions contained in a term sheet and the bank that is given the mandate to organize syndication is referred to as the arranger. Once the loan syndication is successful and the Agreement is signed, the bank which was responsible for the formation of the syndicate and the negotiation of the Agreement is replaced by the Agent bank but in practice, both functions are normally performed by the same bank. Interestingly, the syndicate is formed in a structure that makes the determination of relationships and liabilities complicated as the arranger who served in the capacity of an intermediate between the borrower and participants to the syndication may be seen to be liable to both the borrower and lenders. Additionally, since each lender is a member of the syndicate and a party to the loan documents, the borrower has a direct contractual relationship with each member of the lending syndicate and it may be inferred from the latter that the borrower may be directly liable to lenders and vice versa. This research focused the relationship between the arranger/agent bank with the borrower on one hand and with lenders on the other hand but also the extent of their liability in the loan syndication structure.

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