I-CAN-GHANA

Having applauded Martin Amidu for his courage in prosecuting his actions and claims, I must however express reservations about one aspect of today’s decision by the Supreme Court.

I note the firm policy decision by the Supreme Court that every international business transaction to which the government is a party requires parliamentary approval, in accordance with Article 181(5). In today’s decision, the court in its most forthrightly manner since the CCWL Case, considered claims in restitution that may be made by a party to such a transaction, where the government has taken the benefit of a contract that is executed without obtaining parliament’s approval. The question is whether if Ghana has completely benefitted from a transaction, it can escape liability by simply hiding behind article 181(5) and not pay; and that even when it has paid under the contract, it can hide behind a potential decision by the Supreme Court that the other party should refund what Ghana has paid?

Today’s decision follows the previous decisions in AG v. Faroe Atlantic and AG v. Balkan.

But the key difference in today’s judgment is that the court considered the role of restitution in such matters. Dr. Date-Bah JSC, reading the unanimous decision of the court, was emphatic that claims in restitution would not be tolerated to by-pass constitutional breaches. He then created an extremely narrow, almost impassable window for such claims, a window too narrow for any comfort. That narrow window is captured in his use of the word “sparingly” to describe where the court would be prepared to order restitutionary reliefs in favour of a party to such a contract.

The net result is that anyone who has a contract with the government, for which parliamentary approval would have been required, has been put on notice that although it is not for that party to take the contract to parliament, the Supreme Court says “you have precious little or no room at all to recover anything, even if you have fully performed, even if you have fully discharged your side of the contract, and even if the government has fully benefitted from the contract. In fact, even if the government has paid you, the court may order you to refund all the monies paid.”

It calls into question the current situation where there is, in truth, quite a number of such transactions already in existence since the 1992 Constitution came into force. Some of those agreements have been concluded long ago. The effect of such decisions is that the government can simply to to the Supreme Court and roll those contracts back.

Other such agreements have gone to court and/or are at international arbitration. Others have been taken to parliament belatedly for ‘ex post facto’ parliamentary approval. Indeed some of those taken to parliament belatedly, were not even the original agreements, but amendments and/or restatements of those agreements. Can parliamentary approval raise ‘the dead’? If those transactions are nullities, would taking a null agreement to parliament “dis-nullify” it? Can something be built on nothing? And, by the way, when does the agreement become a nullity, since all Article 181(5) says is that the transaction “shall not come into effect” until the parliamentary approval has been obtained?

It is important to understand that the effect of such decisions might be that our government will be open to expensive, international legal and arbitral proceedings with respect to such agreements, especially those that the government has taken the benefit of.

The other risk is that entities with which the government enters into transactions would start demanding the choice of other laws, and not Ghana law.

Yet another risk is that they would also demand sovereign risk insurance from the government. That is a particularly expensive insurance policy and would make the cost of Ghana doing business worldwide super-expensive, because the cost of the premiums would be the government’s transactional cost. But that policy would take care of instances where the courts of Ghana or the government of Ghana decide that those contracts required parliamentary approval, and no claims of restitution would apply. Then, those parties would simply fall on the insurance policies, collect their monies, and have international insurance sharks or vulture funds pursuing Ghana’s assets all over the world. Ghana has only recently been caught up in the dilemma over the Argentine naval vessel, and I am certain that we do not want to be caught up in such drama directly.

In other words, international business would say “let the courts in Ghana say what they want. International judicial and arbitral bodies will demand something else.”

Since we are not an “island” and require business relations with international bodies, it is clearly criminal for the government to enter into transactions and yet fail, refuse or neglect to even apply for parliamentary approval, and be the first to run to the Supreme Court for protection from its solemn obligations, especially when it has benefitted from such transactions.

It is also a crying shame that 21 years into the life of the 1992 Constitution, no effort has been made to pass the legislation required under Article 181(5) to regulate the applicability of article 181 to international business and economic transactions. I cannot fathom why Parliament has neglected this constitutional obligation, and I believe that it is time that pressure is brought to bear on the legislature to be up and doing about this important matter.

It is my view, that the real loser in the long run in this battle over article 181(5), will be the Republic of Ghana.