GCNet Loses GH¢4 Billion Arbitration Case Against Ghana, Asked To Pay Legal Fees

• An international arbitration tribunal in London has unanimously ruled in favour of Ghana in a judgement debt case
• GCNet had dragged Ghana to the tribunal following the termination of a contract, insisting that the agreement was terminated illegally
• But the court, among other things, found that the contract was terminated legally and ordered GCNet to pay Ghana's legal fees

An international arbitration tribunal in London has dismissed a case filed against Ghana by the Ghana Community Network Services Limited (GCNet).

The tribunal also awarded Ghana $2,185,983.21 in legal fees, which includes $1,744,050.42 for legal representation and $441,932.79 for expert witness fees.

The tribunal further imposed a simple interest rate of USD SOFR + 1% if the fees were not paid within 30 days of the ruling.

Why GCNet sued Ghana

GCNet filed for arbitration in June 2022

In June 2022, GCNet initiated arbitration over the Ghanaian government’s decision to terminate a service agreement for managing customs and trade systems at the country’s ports.

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Under the agreement, GCNet collected fees from users on import and export transactions. Initially signed in 2000, various Trade Ministers repeatedly extended the contract, but these extensions lacked proper statutory approval, violating Ghana’s procurement laws.

Following a value-for-money assessment in 2020, the government ended the agreement and offered compensation in line with the contract.

GCNet, however, declined the offer and demanded over GH¢3.3 billion in damages, citing wrongful termination and claims related to government exemptions and discounts for importers.

Representing Ghana, Attorney-General Godfred Dame maintained that the termination was legal and argued that compensation should not exceed the $6 million limit set in the contract.

The government insisted that;

• GCNet’s claims for losses due to exemptions and discounts were unfounded as the aid policies had been in compliance with Ghanaian law and global trade.
• GCNet had relinquished its rights to seek damages from the implementation of the said policies by not contesting them earlier.
• Compound interest was not applicable under Ghana’s laws, and any awarded sum should merely attract simple interest only.

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The tribunal unanimously ruled in favour of Ghana, stating that:

• Ghana’s termination of the agreement in April 2020 was legal.
• GCNet had indeed relinquished its rights to claim damages from exemptions and discounts.
• GCNet was only entitled to $5.4 million after Ghana terminated the contract, as spelt out in the contract

Ghana slapped with a hefty judgment debt

YEN.com.gh reported that a US court has granted a judgment in favour of the Ghana Power Generation Company, a subsidiary of Trafigura.

Ghana has been ordered to pay the multinational company Trafigura $111,493,828.92 with interest.

In 2021, Trafigura sued the Ghana government for terminating two power deals and was awarded a judgment debt of approximately $140 million.

Source: YEN.com.gh