Refund 25 million euros - Court orders Waterville

June 15, 2013 (Lead Story)

A construction firm, Waterville Holdings (BVI) Limited was on June 14, 2013 ordered by the Supreme Court to refund all moneys paid to it by the Ghana government on the premise that it had no valid and constitutional contractual agreement with the government.

The company is expected to refund 25 million Euros it received from the government following the court’s unanimous judgement that the said contract between the government and Waterville was unconstitutional because it had contravened Article 181 (5) of the 1992 Constitution.

It has so far received 25 million Euros from the government and is expected to refund the amount on the grounds that the contract it had entered into with the government and its subsequent abrogation, contravened Article 181 (5) of the 1992 Constitution which requires that such contracts are put before Parliament for approval.

Accordingly, the court declared as null and void and of no operative effect, a contract titled  “Contract for the Rehabilitation (Design, Construction, Fixtures, Fittings and Equipment) of a 40,000 Seating Capacity Baba Yara Sports Stadium in Kumasi, Ghana” entered into on April 26, 2006 between the Republic of Ghana and Waterville Holdings (BVI) Limited of P. O. Box 3444 Road Town, Tortola, British Virgin Islands.

The court agreed with the plaintiff, Mr Martin Amidu, a former Attorney-General and Minister of Justice that, the contract was an international business or economic transaction under Article 181(5) of the 1992 Constitution that could only have become operative and binding on the Government of Ghana after it had been laid before and approved by Parliament.

It also held that the two separate but similar agreements all dated April 26, 2006 were in contravention of Article 181 (5) of the 1992 Constitution and further declared that a bridge financing agreement arising between the Republic of Ghana and Waterville Holding (BVI) Limited, pursuant to the two agreement between the two bodies,  was a loan transaction within the meaning of Article 181 (3), (4) and (6) of the 1992 Constitution whose terms and conditions had to be further laid before Parliament and approved by a resolution of Parliament to be operative and binding on the Republic of Ghana.

Fundamentally Erroneous

In what can be described as a classical decision, the court in a two-hour judgement read on its behalf by Professor S. K. Date-Bah,  held that it was fundamentally erroneous for the state to ignore the effect of Article 181 (5) of the 1992 Constitution before making payment.

Other members of the panel were Mr Justice Julius Ansah, Mrs Justice Sophia Adinyira, Ms Justice Rose Owusu, Mr Justice Anin Yeboah, Mr Justice Paul Baffoe-Bonnie, Mr Justice N. S. Gbadegbe and Mrs Justice Vida Akoto-Bamfo. Mr Justice Ansah was absent because he was indisposed but gave a written consent to the judgement.

According to the court, the state owed no liability to Waterville and for that reason the “settlement upon which the moneys were paid was founded on an unconstitutional act, and should, therefore, be treated as null and void.”

It said the Supreme Court had jurisdiction under Article 2 (2) of the 1992 Constitution to make a consequential order compelling Waterville to refund all moneys paid to it in relation to the work that it did on the stadia.

Public Procurement Act

Waterville had argued that under the Public Procurement Act, 2003 (Act 663), the tendering process was completed and an application made to the Central Tender Review Board had been given concurrent approval by a letter dated August 5, 2005.

It had also argued that following from the approval of the Central Tender Review Board, there was a continuing legally binding obligation on the government, under Section 65 of the Public Procurement Act.

Waterville had also contended that neither the Minister of Education and Sports nor the Attorney-General had the authority to cancel the tendering process but the court held different views and maintained that the contract had no leg to stand on from the onset to merit such arguments from Waterville.

Ill-founded

Responding to Waterville’s claim that Mr Amidu did not have the locus to commence the action against it as well as had usurped the powers of the Attorney-General to commence the action against it (Waterville), the court held that such argument, “with respect, is ill-founded.”

That according to the court was because the fact that the Attorney-General has brought a civil action on a particular issue cannot derogate from a citizen’s right under Article 2 (1) of the 1992 Constitution to seek a declaration and consequential orders from the Supreme Court in relation to the same issue if it involves any act or omission which the citizen alleges to be inconsistent with, or in contravention of a provision in the Constitution.

“What is necessary for the citizen to do is to establish that he or she comes within the parameters laid down in Articles 2 (1) and 130 (1) of the 1992 Constitution,” the court held.

The court’s response was in reference to an action initiated by the Attorney-General to retrieve monies paid to a businessman, Mr Alfred Agbesi Woyome.

Alfred Woyome

Mr Amidu had prayed the court to order Mr Woyome to refund GH51.2 million he had received from government as result of the purported agreement between Waterville and the government but the court said it was difficult to do that because Mr Woyome was not a party to the April 26, 2006 agreement.

It said the High Court had jurisdiction to determine issues raised by Mr Amidu with respect to whether or not there was any contract between Mr Woyome and the government as well as if he was entitled to the GHC51.2 million judgement debt he had received.

That matter according to the Supreme Court fell within the jurisdiction of the High Court which was currently hearing it.

It however maintained that its refusal to determine the issue bordering on Mr Woyome was without prejudice to the merits of a civil suit initiated by Mr Amidu against Mr Woyome and currently pending before the Commercial Court.

It also held that there was no fresh issue for interpretation to warrant the invocation of the original jurisdiction of the Supreme Court and held that orders if any against Mr Woyome would have to be determined by the High Court.

Complaint about Lawyers for Waterville and Mr Woyome

Mr Amidu had prayed the court to determine whether or not lawyers for Waterville and Mr Woyome Mr Kofi Peasah-Boadu and Co. were collusive, collaborative and a fraudulent misrepresentation that enabled them to expropriate the resources of the sovereign people of Ghana contrary to Article 181 of the 1992 Constitution.

He had also prayed the court to find the conduct of solicitors for Waterville and Mr Woyome in seeking Kofi Peasah-Boadu of Peasah-Boadu and Co. and O. Osafo Buabeng of Oseawuo Chambers and Co. to suppress the fact that Waterville received payment from Micheletti and Co. Ltd and Consar for works that they took over from Waterville constituted an abuse of the process of the court.

Mr Amidu, who was commended by the court also for his vigilante role in protecting the public purse had also urged the court to find that Mr Osafo-Buabeng had sought to suppress the fact that Bank Austria Creditantalt A.G. withdrew from the loan and bridge financing transaction without making any resources available to the government under Article 181 (3) and (4) of the 1992 Constitution was an abuse of the court process.

He, therefore, prayed the court to make orders under its powers enshrined in Article 2 (2) of the 1992 Constitution to address the unprofessional conduct of the lawyers who plead and advocate cases before the court in order to prevent future abuse of its process by legal practitioners contrary to the Legal Profession (Profession Conduct and Etiquette Rules), 1975 (L.I. 663).

In response to that the court directed Mr Amidu to lodge a formal complaint with the Disciplinary Committee of the General Legal Council since such issues fell within their prerogative.

It also directed the registrar of the Supreme Court to forward a copy of the court’s decision to the General Legal Council for action.

Mr Martin Amidu Commended by Supreme Court

The court was full of praise for Mr Amidu for his public spiritedness which fuelled the meticulous and industrious presentation of the case adding that, “his diligence has enabled the ventilation of the important legal issues in this case.”

Mr Justice Jones Dotse on Lawyers and Judges

Mr Justice in his brief opinion held that lawyers must not only have the interest of their clients at heart but also that of the state.

He also urged lawyers to allow their conscience to guide them in the discharge of their duties.

He was of the view that if the counsel for the defendants had applied themselves diligently to the facts of the case as had been demonstrated by the judgement, and had also averted their minds to certain critical exhibits, they might have taken a different stance and given different professional legal advice.

Judges at the Lower Courts

He also stated that the time had come for judges at the lower courts to take into consideration some pre-commencement of legal proceeding requirements and rules of procedure in the law courts much more seriously than they had done in the past.

According to him there was no sound legal basis for Waterville and Mr Woyome to pursue the stated cases against the government of case.

He also expressed the hope that state attorneys would put in their best in in prosecution of those cases.

Mr Justice Dotse said it was apparent default judgement was awarded in favour or Mr Woyome against the state by Mr Justice Amadu Tanko, a Court of Appeal Judge due to the inaction of state lawyers.

He said, “the duty of a trial judge or magistrate is to ensure that cases brought up before them are not only legitimate but based on sound principles of law.”

He maintained that trial courts must ensure that claims brought before them were legal, constitutional, and based on pleadings and stressed that a trial judge must not accept just anything that is brought before him/her with the excuse defendants have not put in any defence.

Mr Justice Dotse indicated that even ex-parte motions must be scrutinized thoroughly by trial courts before they are granted adding, the courts must ensure that they are not used by anybody or a group of persons to unlawfully or illegally enrich themselves to the disadvantage of another person or the state.

He also congratulated Mr Amidu for his vigilante role in protecting “the wanton dissipation of the public purse.”

Background

On April 26, 2006 the government entered into two separate but similar agreements with Waterville Holdings for the rehabilitation of the Accra, Elwak and Kumasi Stadia for the MTN Africa Cup of Nations (CAN 2008) football tournament.

Waterville was the main contractor in both agreements with Micheletti and Consar acting as sub-contractors for Waterville.

On February 6, 2006, before the formal signing of the agreements of April 26, 2006, the sites were handed over to Waterville, which commenced works involving demolition, excavation and clearing of the project.

The NPP administration unilaterally terminated the agreements and re-awarded the contract to the sub-contractors.

At the time of the termination, Waterville had mobilized for work in all the three stadia and for that reason the then government requested the consultants to the projects, Building Industry Consultants (BIC) Limited to value the work done by Waterville before the termination.

The BIC prepared the valuations and a certificate for the payment of 20,491,448.37 Euros was issued on August 23, 2006.

The certificates also included certain amounts designated as Project Engineering Fees for the three stadia which all amounted to 3,348,070.20 Euros.

Subsequent to that Waterville received payments of 8,980,522.28 through Micheletti and Consar for its work on the three stadia.

Following from that the solicitors for Waterville wrote to the government in a lettedated December 23, 2006, claiming their client had been paying 5 per cent on the pre-finance loan for the work done and also interest accruing on account of the delay in payment.

That letter was ignored by the NPP administration which refused to negotiate or pay any compensation to Waterville after the project consultant had completed its valuation.

Following the failure of the NPP government to heed to numerous interventions from Waterville, solicitors of Waterville wrote to the Attorney-General in 2009 and on the basis of the BIC valuation report, the then Attorney-General concluded that there was no dispute regarding the certified claims by Waterville against the state and that certain monies were really owed Waterville.

As a result of that the amount due to Waterville after the deduction of the paid 8.9 million Euros amounted to 9,634,240.15 but Waterville made claims for the sums due for the loss of profit, mobilization and de-mobilisation as well as interest since 2006 and damages.

In spite of the undisputed and independently certified amount owed to Waterville, the Attorney-General held a series of meetings with Waterville to negotiate the amount downward but no conclusions were reached.

On June 14, 2010, the solicitors for Waterville indicated that negotiations had failed and invoked the mediation provisions of the abrogated contract.

In October 2010, the Mediator recommended and it was accepted by both parties that the government pay a mediated sum of 25 million Euros in full and final payment of all claims by Waterville against the state.

The National Democratic Congress (NDC) has since paid 25 million Euros to Waterville.

Dissatisfied with the mode of the award of the contract to Waterville and the subsequent payment of the moneys, Mr Amidu commenced the original action on June 22, 2010 but amended his writ on April 11, 2013 after the court had given him permission to do so.