AG, BALKAN ENERGY LEGAL TUSSLE, COURT THROWS OUT ENITH BANK APPLICATION

By Felix Engsalige Nyaaba

The Supreme Court has yesterday thrown out an application filed by the Zenith Bank Ghana Limited seeking leave of the court to be a party in the legal suit between the Attorney General and the Balkan Energy Company Limited over the Power Purchase Agreement (PPA) between the Government of Ghana and the Balkan Energy Ghana and Balkan International PLC, in 2007.

The Zenith Bank Ghana Limited filed a motion through its legal counsel, Mr. Nana Ato Dadzie, seeking leave of the court to be part of the case pending in the Supreme Court over constitutional issues.

According to counsel, the Bank should be allow to be part of the suit because, in his view it was the Bank that guaranteed an overdraft facility of $2.5 million to the Balkan Energy for the power purchasing Agreement project signed between the Company and the  Government of Ghana.

He contended that, the bank signed the letter of credit (L.C) after it has received an advised from the Bank of Ghana (BOG) on the issues and that it should be allow to joint and bring in issues that would facility the court in its final determination of the case.

But the Attorney General, opposed the application and said, it was an attempt to further delay the case and that the applicant at all material time had fail to apply to be joint in the case at the lower court.

According to the  Attorney General and Minister of Justices , Dr. Benjamin Kunbour, the issues at the Supreme Court are of constitutional matters and that, the Zenith Bank as an applicant do not need to be join in the matter.

He prayed the court to dismiss the application, because it was an abuse of the court process.

After listening to the arguments by counsels, the seven member panel led by Justice William Atuguba dismissed the application and said the presence of the applicant would further delay the case which has already suffered several adjournments at the lower Court.

The Supreme Court however, directed counsel for the Zenith Bank to file its “Amicus–Curaes”, that is counsel is at liberty to file in papers he deem useful in the case to assist the court arrive at a fair and justice’s conclusion.

In addition, the Supreme Court yesterday also granted a motion for extension of time filed by counsel for Balkan Energy, Mr. Ace Ankoma to file in statement of case.

The Supreme Court had earlier ruled on the preliminary objection by counsel for Balkan Energy, Mr. Ace Ankomah that the Court has no jurisdiction to hear the matter when the issues between the parties has not yet deal with at the lower court.

But the Supreme Court in its ruling at the last sitting on the case said, the refusal by the High Court to refer the matter to the Supreme Court usurps the supervision jurisdiction of the Supreme Court.

The Supreme Court on that day ruled that, proceeding at the Fast Track High Court should stay till the final determination of the case.

The other panel members that sat on the case were, Justice Professor S.K. Date-Baah, Justice Sophia Adinyira, Justice Julius Ansah, Justice Anin Yeboah, Justice Sulleman Gbedegbey and Justice Vida Akoto Bamfo.

The case has been adjourned to March 20, this year for continuation.

 The Ministry of Energy on July 27, 2007, entered into a Power Purchasing Agreement with a USA based Energy Company, Balkan Energy Company Limited for the “Osagyefo Barge” without passing through the parliament of Ghana for approval per Article 181(5) of the 1992 constitution.

However, after assuming into political power in 2009, the Ministry of Justice and Attorney General on behalf of the republic dragged Balkan Energy Company to court for fraudulent misrepresentation.

According to Attorney General, the whole transaction was fraud as it was against the international business transaction laws of the state of which, the Balkan Energy Company wholly owned.

In its statement of claim, the Attorney General wants a declaration that, the power purchase agreement made on July 27, 2007, between the government of Ghana and the company constitutes an international business transaction to which the government of Ghana was party and is unenforceable as it infringes Article 181(5) of the 1992 constitution.

It further wants a declaration that clause 22.2 of the power purchase agreement constitutes  an international business transaction to which the government of Ghana was party and is therefore unenforceable as infringing Article 181(5) of the 1992 constitution.

The Attorney General also wants an injunction restraining the defendants, their agents, affiliates, subsidiaries or howsoever otherwise from instituting or pursuing arbitration proceeding or any other proceeding whatsoever against the government outside the jurisdiction of Ghana in respect or on the basis of the power purchase Agreement between the Government of Ghana and the defendants.

However, during the trial at the Accra High Court, some legal issues that needed the Supreme Court interpretation came up and the Attorney general requested that the issues should be send to the Supreme Court for interpretation.

But the High Court refused to refer the matter to the Supreme Court after several applications by the Attorney General.

The issues that was brought up were, whether or not the power purchase Agreement 9PPA) dated July27, 2007, between the government of Ghana and Balkan Energy Limited constituted an international business transaction under article 181(5) of the constitution or not.

Additionally, the issues of whether the arbitration provision contained in the purchase Agreement dated July 27, 2007, between the government of Ghana and Balkan Energy Limited constituted an international business transaction under article 181(5) of the constitution or not.

In the application for stay of proceedings, the Attorney General said, upon a true and proper interpretation of Article 181(5) of the constitution, the words “international business or economic transaction to which the government is a party,’ applied to a business transaction between the Government and a company incorporated in Ghana owned wholly by foreigners and capable of enjoying the status of a strategic foreign investors under the Ghana Investment Promotion Centre Act (Act 479).

The Attorney General said, it would lead to the absurd result that Ghanaians who enter into loan transaction with the Government under the same article 181 will have to comply with having their agreement laid before and approved by parliament but a wholly foreign owned entity which enters into a transaction with all the characteristics of an international business or economic transaction will escape that requirement.

The Attorney General also wants the court to declare that the refusal of the respondent to refer the issues of constitutional interpretation under article 130(20 of the constitution constituted a usurpation of the Supreme Court jurisdiction.