Posted on: www.dailyguideghana.com
By William
Yaw Owusu
Friday, June
21, 2013
THE SUPREME Court ha ordered Isofoton S.A., a Spanish
company, to refund $325,472.00 (GH¢488,208.00) received as judgment debt, to
the State.
Apart from paying interest from the day it received
the amount which the court described as ‘void’, the nine member panel, chaired
by Justice Samuel Kofi Date-Bah, also ordered Isofoton S.A. to refund ‘any
subsequent payments’ in respect of the discredited transaction.
This is the second time in less than 10 days that the
Supreme Court is ordering foreign firms to refund huge sums of money to the
state, following attempts to cash in on illegal contracts.
All the suits were filed by Martin B.K. Amidu, who was
relieved of his position as Attorney-General and Minister of Justice under the
previous Mills’ administration.
At the court premises, Mr Amidu was hailed by his
supporters for chalking another legal success, saying that he is blessed.
“Martin Amidu, you are blessed,” they yelled.
The first major ruling was in respect of the order to
Waterville Holdings Limited, a British Cayman Island company, said to be
defunct, to refund a whopping €25million for no work done.
In all the moves, there were Ghanaian lawyers and
business people fronting for the foreign firms.
Some of these lawyers have been referred to the
General Legal Council for disciplinary action to be taken against them.
The Facts
The facts of the case are that in September 22, 2005,
the erstwhile NPP administration, through the Ministry of Food and Agriculture,
entered into an agreement with Isofoton S.A. of Montalban 9, 28014, Madrid,
Spain for the execution of a ‘Solar PV Powered Water Pumping project and
Irrigation Systems in Remote Rural Areas of Ghana’. Earlier, the government had
awarded a similar contract in 2001 through the Ministry of Energy to the same
company for the execution of the ‘Solar Electrification Project in Ghana Phase
II’.
In 2008, Isofoton S.A. brought an action against the
state, represented by the Attorney General, at an Accra High Court and secured
a default judgment with no specified amount because the Spanish firm claimed
the government had abrogated the contract with the Ministry of Agriculture
without justification.
The court then asked the parties to reconcile the
amount involved before settlement. However, in 2009, the State went to court
and file processes in an attempt to set aside that default judgment.
Strangely, the AG abandoned that agenda of setting
aside the judgement and rather reached for an out-of-court settlement with
Isofoton during which the AG, on behalf of government, offered to pay an amount
of $1.3million.
The settlement agreement was then filed and adopted by
the court on September 28, 2010, and government paid $325,472 in March 2011 to
Isofoton S.A. as part payment but subsequently defaulted in the payment of the
balance.
The refusal by the government to pay the rest of the
amount compelled Isofoton S.A. to file for a Garnishee Order against the
Ministry of Agriculture.
An Accra High Court, presided over by Ernest yao Obimpeh
on May 2, 2012, issued the Garnishee Order to freeze the Engineering
Department’s accounts of the Ministry of Agriculture at the Bank of Ghana.
In an attempt to overturn the Garnishee Order, Martin
Amidu, the then AG on June 5, 2012, filed an application for stay of execution
but the trial judge, Justice Obimpeh, dismissed the action on grounds that the
AG did not show any exceptional circumstance to warrant the grant of the
application.
Isofoton S.A. then initiated contempt proceedings
against the state when it became obvious that the state was delaying in the
payment of the balance.
While Mr. Amidu was still fighting to save Ghana from
incurring unnecessary debts, he was sacked by former President Mills.
In an effort to prevent the dissipation of the
resources of Ghana, Mr. Amidu, who has been hailed by many for leading the
anti-corruption crusade of late, sued the Attorney-General, Isofoton S. A.,
Madrid, Spain and Anane-Agyei Forson, the Spanish firm’s Ghanaian agent at the
Supreme Court for the defendants to return the money.
Reliefs
He sought a declaration, among other things, that “on
a true and proper interpretation of Article 181(3) (4) and section 7 of the
Loans Act, (Act335), the laying before and approval on 1st August 2005 of the
terms and conditions of the Second Financial Protocol between the Republic of
Ghana and the Kingdom of Spain for an amount of sixty-five million Euro
(€65,000,000) for the implementation of various development projects and
programmes in Ghana did not nullify
the effect of Article 181(5) of the 1992 Constitution
that mandates further laying before and approval of any specific international
business or economic transaction to which for the implementation of various
development projects and programmes in Ghana, did not nullify the effect of
Article 181(5) of the 1992 Constitution that mandates further laying before and
approval of any specific international business or economic transaction to
which the Government is a party even if payment had to be made from the said
loan approved by Parliament.”
He said “the agreement between Isofoton S.A. of
Montalban 9, 28014, Madrid Spain, a foreign registered company and the Ministry
of Food and Agriculture of the Government of Ghana dated 22nd September 2005
for Pumping and Irrigation Systems in Remote Rural Areas of Ghana is an
International business or economic transaction within
the meaning of Article 181(5) of the 1992 Constitution and never became
operative because it was not laid before and approved by Parliament and is
accordingly null, void and without effect whatsoever.”
Finally, Mr. Amidu said “the agreement between
Isofoton S.A of Montalban 9, 28014, Madrid Spain, a foreign registered company
and the Ministry of Energy of the Government of Ghana in 2001 for the execution
of the ‘Solar Electrification Project in Ghana Phase II’ is an international
business or economic transaction within the meaning of Article 181(5) of the
1992 Constitution and never became operative because it was not laid before and
approved by Parliament and is accordingly null, void and without effect
whatsoever.”
Judgement
Even though the court ordered Isofoton S.A. to refund
the money, the court did not accept Mr. Amidu’s argument that the 3rd defendant
(Anane Forson) should be part of the suit.
The court said even though the 3rd defendant held
himself out as an attorney to sue in the courts of Ghana on behalf Isofoton
S.A. for damages in an international business transaction, Mr. Amidu did not
show any reasonable cause of action against him.
The court said the conduct of Isofoton S.A. in suing
for breaches of the said agreements,
when the representatives of the Spanish firm knew that
the agreements were international business transactions which were not laid
before and approved by Parliament, was inconsistent with and in violation of
the Articles 2 and 181 (5) of the Constitution as claimed by Mr. Amidu.
The High Court
The Supreme Court held that the High Court, which gave
default judgment, acted without jurisdiction when clearly the issue that came
before it was amenable to the supervisory jurisdiction of the Supreme Court
under Article 132 of the Constitution.
The court said the High Court misinterpreted Article
181 (3) (4) and (5) of the Constitution
to mean that the approval of the terms and conditions
of 2nd Spanish Financial loan by Parliament automatically excluded the further
laying before and approval by Parliament, of subsequent international business
or economic transactions arising out of the terms and conditions of the loan
which the government was a party as mandated by Article 181 (5).
Amidu’s Capacity
The court held that Mr. Amidu
had the capacity to initiate the action since he is a citizen
of Ghana. Mr. Amidu, the plaintiff, represented
himself while Grace Oppong, a Senior State
Attorney represented the AG, with Owusu-yeboa and
Kizito Beyuo representing Isofoton
S.A. and Anane Adjei Forson respectively.
Dotse’s Beef
Similar to what happened in the Waterville case last
week, Justice Jones Victor Dotse, a member of the panel, made an observation
after Justice Date-Bah had read the unanimous judgment.
He said it was only the Supreme Court that had the
exclusive jurisdiction to interpret constitutional matters, particularly the
articles on which Mr. Amidu relied and advised the inferior courts not to
arrogate to themselves that power.
The High Court, he observed, usurped the powers of the
Supreme Court and dealt with issues that bordered on constitutionality, noting
that the ‘brazen and bold attempt’ by the High Court judge should not have
happened.
The High Court, he indicated, should have referred the
matter to the highest court of the land for interpretation and that its action
was inconsistent with the Court Acts.
According to him, it was only by strict adherence of
this principle that the provisions in the Constitution would be protected.
Justice Dotse urged the inferior courts to ‘hasten slowly’ when issues of such
nature were brought before them.
Other justices on the panel included Julius Ansah,
Sophia O. Adinyira, who was not in court but gave her consent for the judgment,
Rose Owusu, Anin-yeboah, Paul Baffoe-Bonnie, Sulley Nasiru Gbadegbe and Vida
Akoto- Bamfo.
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