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Unreported Cases of the Supreme Court of Ghana 2013

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Unreported Cases of the Supreme Court of Ghana 2013 HOME UNREPORTED CASES OF THE SUPREME COURT OF GHANA 2013 IN THE SUPERIOR COURT OF JUDICATURE IN THE SUPREME COURT ACCRA AD 2013 CORAM: DR. DATE-BAH JSC (PRESIDING) ANSAH JSC ADINYIRA (MRS) JSC OWUSU (MS) JSC DOTSE JSC ANIN YEBOAH JSC BAFFOE-BONNIE JSC GBADEGBE JSC AKOTO-BAMFO (MRS) JSC WRIT No. JI/15/2012 14TH JUNE, 2013 MARTIN ALAMISI AMIDU - - - PLAINTIFF VRS 1. THE ATTORNEY GENERAL - - - DEFENDANTS 2. WATERVILLE HOLDINGS (BVI) LTD 3. ALFRED AGBESI WOYOME JUDGMENT DR DATE-BAH JSC: The facts To the joy of the many lovers of soccer in Ghana, Ghana won,in July 2004,the right to host the 2008 African Cup of Nations football tournament, popularly known as CAN 2008. This case is about one of the consequences of Ghana’s successful bid to host CAN 2008. As a result of winning the right to host CAN 2008, the Government of Ghana became obliged to rehabilitate football stadia and other sporting facilities in Ghana. In order to fulfill this obligation, it set in motion in January 2005 a procurement process for the award of appropriate contracts in accordance with the Public Procurement Act, 2003 (Act 663). Vamed Engineering Gmbh & CO KG (referred to subsequently as ‘Vamed’) was one of the companies which submitted a tender for the award of a contract to rehabilitate the stadia specified by the Government of Ghana. Vamed became one of two companies which were shortlisted by the Government’s evaluation committee. Meanwhile, by a letter dated 1st July 2005, Vamed purported to assign all its rights and obligations in the CAN 2008 stadia tender and another specified project to the second defendant. The second defendant, by an undated letter from Andrea Orlandi, a director of the company, to Vamed accepted this purported assignment. The relevant Entity Tender Committee recommended Vamed/Waterville to the Central Tender Review Board for the award of the contract because its tender was in their view the most competitive. The Central Tender Review Board on 5th August 2005 gave “concurrent approval for the award of the contract to Messrs VAMED Engineering.” However, by a letter dated 22nd August 2005 addressed to the Managing-Director of Vamed, the Minister for Education,Youth and Sports purported to terminate the procurement process “due to the high commitments implied in the submissions, the inconclusive and the non-assuring nature of the financial submissions”. The second defendant made several protests to Government in respect of this purported abrogation. It entered into negotiation with Government regarding the purported abrogation which resulted in a Memorandum of Understanding between them on 30th November 2005. The MOU stated that the Government would award the Ohene Djan and El Wak stadia project on a turnkey basis to the second defendant. On 26th April, 2006 the Government of Ghana signed two separate but similar agreements with the second defendant for the rehabilitation of the Ohene Djan and El Wak stadia in Accra and the Baba Yara stadium in Kumasi, respectively. These two agreements both expressly specified conditions precedent to their coming into force. Clause 17 of the agreements stated as follows: “17.1 This contract shall become effective at the date of the fulfillment of all of the following conditions: 17.1.1 Signing of the Contract by all Parties v Signing of the Loan Agreement relating to the Contract by the Minister for Finance and Economic Planning. v Rendering of a Legal Opinion by the Ministry of Finance and Approval of the Contract by the Cabinet and Parliament of the Republic of Ghana. 17.1.2 Confirmation by the bank holding the Escrow Account to the Contractor that the Escrow Account is established and credited with the total amount of the Contract Price according to Clause 5. 17.1.3 Effectiveness of the tripartite agreement to be concluded as per Clause 6. 17.1.4 Receipt by the Contractor of the advance payment referred to in Clause 6.1. 17.1.5 Receipt of the necessary approvals from Multilateral Investment Guarantee Agency (MIGA), Ex-Im Bank, USA and the Lender.” In spite of the fact that the agreements were thus not yet in force, the Government, on 6th February 2006, even before the formal signing of the agreements on 26th April, 2006, authorised the second defendant’s accessto the sites of the stadia.The Deputy Minister of Education and Sports, by a letter dated 6th February 2006, informed the Managing-Director of Waterville, that is, the 2nd Defendant, that his Minister had “no objection to your moving to the construction sites to commence evacuation and demolition exercises for the rehabilitation and upgrading of the Accra, Kumasi and El-Wak stadia. By this notice, we are informing the authorities of the stadia and El-Wak to grant access to the construction teams for the agreed initial exercise.” Thus, the second defendant commenced works involving the demolition of structures and the excavation and clearing of the sites. Subsequently, on 1st August 2006, the Government terminated the agreements with the second defendant, by a letter of that date written by the Attorney-General. That letter referred to clause 17 of the Agreements (quoted above) and indicated that the second defendant was being given notice that “since the contracts did not receive approval from Cabinet in accordance with Clause 17 of the Contracts, the Contracts have never become effective.” By this letter, the Government of Ghana in effect walked away from the two agreements it had signed. It then entered into negotiations with the sub-contractors of the 2nd defendant, Micheletti and Co Ltd and Consar Ltd, to continue with the rehabilitation and refurbishment of the Ohene Djan, Baba Yara and El Wak stadia. The agreement reached with them was that Government would pay the sub-contractors the value of the work already executed by the 2nd defendant before the date of takeover by the sub– contractors of the work. The sub-contractors would then pay the 2nd defendant the value of the work it had undertaken. In his Statement of Case, the 1st defendant states as follows on this matter (in para 27): “As a result GoG instructed the Consultants for the Project, Building Industry Consultants Ltd. (BIC) to value the work done by the 2nd Defendant from the time of entry onto the date of the takeover by the sub-contractors. It was agreed that GoG will remit to the sub-contractors all the entitlements due the 2nd Defendant as certified by BIC for collection by the 2nd Defendant.” The value of the work previously undertaken by the 2nd defendant was thus duly certified by the consultants for the project, Building Industry Consultants Ltd (hereafter referred to as “BIC”). The Government of Ghana subsequently paid for all the work certified by BIC, totaling some E22,365,624.40. This payment was problematic since it appears to have used a restitutionary route to bypass the legal consequences of an inchoate international business transaction to which the Government was a party, which had not yet been approved by Parliament in terms of article 181(5). In spite of this, on 9th March, 2009, the 2nd defendant wrote relying on a clause in the 26th April 2006 contracts to claim fees and pre-financing costs for the initial construction works from the Government, instead of from their subcontractors, as agreed. The 1st defendant therefore embarked on discussions with the 2nd defendant on its claim. On 18th August 2009, the 3rd defendant wrote to the Government, asserting that the 2nd defendant’s claim was grossly exaggerated and giving his opinion as to what was due from Government to the 2nd defendant. This letter is reproduced below because of its instructive contents. The letter is attached as Exh AG16 to the 1st defendant’s Statement of Case. Stanley-Marbell Plaza Behind Hotel President Adabraka P.M.B.100, G.P.O 18/08/2009 The Hon. Minster Ministry of Youth and Sports Accra CLAIM: CAN2008 STADIA CONSTRUCTION It has come to my attention that the company Waterville BVI has taken the Government of Ghana to court for the payment of an aggregate sum of Euro 33 million and the Attorney General Department has withdrawn the case for settlement. M-Powapak Ltd, Austro Invest Ltd. and Myself are interested parties and wish to state that the demand by Waterville BVI is grossly exaggerated. I was the one who engineered the whole CAN 2008 concept, pursued it through with three (3) consecutive Ministers of the Sport Ministry/Department over the period. I engineered the finances, which covered the construction of Stadia Hospitals, and Youth and Skills Training Centres to be built countrywide. The Government at that time decided that the whole process should not be Supply Contract but should go into tender; and the consortium won the bid through painful processes. We subsequently had a concurrent approval from the National Procurement Authority. Waterville BVI was leading the Consortium that won the contract and demolished part of the Accra Sports Stadium upon a written instruction to Waterville BVI from the then Minister of Education and Sports. The Government later abruptly cancelled the bid illegally through a cabinet decision citing high cost which decision I challenged, by writing to all stakeholders including the National Procurement Authority. Waterville BVI through my help then formed Micheletti Company Ltd. to handle the construction of the Accra Sports Stadium. All along, the Government of Ghana’s Consultants to the project was Building Industries Consultant (BIC). Waterville BVI received some compensation from Micheletti and Co. and from Consar Ltd. (the main contractor for the Kumasi stadium). Austro Invest also received some form of compensation from Waterville BVI.
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