ISOFOTON to refund US$325,472 Judgement Debt

By Stephen Kwabena Effah

June 22, 2013

The Supreme Court yesterday laid to rest, one of the country’s questionable judgement debts when it ordered Spanish energy firm, Isofoton SA, to refund to the Government of Ghana, some US$325,472 and all other monies paid to it as judgement debt in March 2011.

It has also been ordered to pay interest on all monies paid to it thus far by the Government of Ghana from the date of receipt of those monies till the date of final payment.

The apex court’s unanimous order yesterday followed a suit issued by former Attorney General and Minister of Justice, Martin Alamisi Amidu, questioning the legitimacy of the payments of the money to Isofoton without any operative contract between it and the Government of Ghana.

Isofoton was claiming a total of US$ 1.3 million in judgement debt from the Government of Ghana as per two contracts signed between it and the government, which the nine-member Supreme Court panel yesterday described as null, void and of no legal effect whatsoever.

Government had since March 2011 began paying the amount in installments until the Supreme Court on March 7, 2013 halted any further payment until the final determination of the suit in order not to render the case a nullity in the event it succeeds.

Mr. Amidu caused the action against the Attorney General, Isofoton and its Ghanaian agent, Mr. Anane-Agyei Forson over two agreements signed between Isofoton and the Ministry of Food and Agriculture, and another between Isofoton and the Ministry of Energy dated September 22, 2005 and 2001 respectively.

Under the two agreements, Isofoton was to provide solar PV powered water pumping and irrigation systems in rural areas of Ghana and also solar electrification project in Ghana.

However, Mr. Amidu challenged the constitutionality of the two contracts on the basis that they are international business or economic transaction and thus ought to have been approved by parliament as per Article 181 (5) of the country’s constitution.

Further he contended that the upon the true and proper interpretation of Article 181 (3)(4) and Section 7 of the Loans Act,  the approval of the terms and conditions of Second Financial Protocol between Government and Spain for an amount of 60 million Euros for the implementation of various development project and programmes in Ghana did not mean that any further international business which Government is a party, even if payment had to be made from the said loan approved by Parliament.

In its judgement yesterday, the court set aside the entire proceedings of the High Court, which culminated in the judgement debt and a garnishee order issued pursuant to the two inoperative agreements on the premise that the lower court lacked jurisdiction in the matter.

It also struck out the name of Mr.Forson from the suit on grounds that he was improperly joined in that he was just acting as a lawful Attorney for Isofoton and is only a conduit, noting that no cause of action has been established against him.

The court presided over by Justice Prof. S.K. Date-Ba, with Justices Julius Ansah, Mrs. Sophia Adinyira, Ms. Rose Owusu, Mr. Jones Dotse, Mr. Annin Yeboah, Mr. Paul Baffoe-Bonnie, Mr. N.S. Gbadegbe and Mrs Vida Akoto-Bamfo as members, declared the two contracts as invalid in view of the fact that it did not receive Parliamentary approval as required under Article 181 (5) of the Constitution.

The court rejected arguments by Isofoton that once the Second Financial Protocol between Government and Spain was approved by Parliament, it was not necessary for the resultant two contracts to go through Parliamentary approval.

The court held that it was not correct that only major and autonomous contract that has to go through Parliamentary approval, and used the US$ 3 billion Chinese loan agreement approved by Parliament as an illustration.

According to the court, project implementation agreements under the loan are required to go through Parliamentary approval, although the principal 3 billion loan agreement has already been approved by Parliament.

 The court averred that Parliament has legitimate interest to scrutinise project implementation agreements in order to ensure transparency, openness and parliamentary consent.

It is evident that all international transactions which the government is a party to, had to got  Parliamentary approval, the court said, hence its declared the two agreements as unconstitutional.

Further, the Supreme Court in setting aside the High Court proceedings said the consent judgement which was approved by the lower court was “vitiated by the unconstitutionality of the agreements and that has to be set aside”.

The court took the position that the High Court presided over by Justice Ernest Obimpeh acted without jurisdiction and usurped the exclusive and original jurisdiction of the Supreme Court in its ruling of April 24, 2012 on an application for declaration of nullity when it interpreted Article 181 (3)(4)(5) of the constitution.

On the issue of complaints made by Mr. Amidu regarding lawyers who are not registered in the country yet file processes at the country’s various courts, the court said those are procedural issues and thus referred it to the General Legal Council for the necessary action to be taken.

The court commended Mr. Amidu for the second time in a week, for what it termed as his “public spiritedness” which has served the public interest very well.

In his concurring opinion, Justice Dotse condemned the conduct of the High Court which arrogated on itself the powers of the Supreme Court to interpret Article 181(5), adding the lower court ought to have referred the matter to the Supreme Court.

He described the High Court’s action as “brazen and bold attempt by the High Court to usurp the powers of the Supreme Court”

Justice Dotse asked the trial courts in the country to take note of the fact that matters of constitutionality are the exclusively reserved for the Supreme Court, and that it is only by strict adherence to that that the provision of the constitution would be protected.

Mr. Amidu in the case contended that on a true and proper construction of Article 181(3) and (4) of the Constitution and Section 7 of the Loans Act, (Act 335) 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 for the implementation of 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.

Among other reliefs, he sought a declaration that the issue of the jurisdiction of the High Court to have entertained Isofoton S. A.’s Suits No. BC23/2008 and BC24/2008 against the Republic of Ghana on grounds of Isofoton’s lack of locus standi and a cause of action to commence the action in the first place because of the absence of any operative contract with the Government of Ghana.

Further, he asked for declarations against the conduct of Isofoton S. A. and Mr. Anane-Agyei Forson for making claims against the Government of Ghana when they knew that there was no operative contract with the Government of Ghana within the meaning of Article 181(5) of the 1992 Constitution. I finally also asked for consequential orders and directions from the Supreme Court to give effect to the reliefs sought by me.