AG, BALKAN LEGAL TUSSLE, COURT SETS MAY 16 FOR RULING

By Felix Engsalige Nyaaba

The Supreme Court yesterday set May 16, to give its ruling in the legal battle 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, to retrieve what the government described as illegal power purchasing agreement signed in 2007.

The Supreme Court ruling on that day would however, determine whether the power Purchased Agreement signed between the Government of Ghana and the Balkan Energy Ghana and its mother company Balkane Energy PLC(U.S.A), was an international transaction or not.

The nine member panel of judges which was led by Mr. Justice William Atuguba yesterday set the date for judgment after lawyers for both side in the case indicated they were not going to file any other documents.

 According to counsel, they   all relied on their respective statement of case filed to the court and do not have intention of filing additional statement to the court other than the argument in their various statement of case.

The other members of the panel sitting on the case were, Justice Professor S.K. Date-Baah, Justice Sophia Adinyira, Justice Julius Ansah, Justice Anin Yeboah, Justice Baffour–Bonne, Justice Sulleman Gbadegbey and Justice Vida Akoto Bamfo.

 The Supreme Court at the last sitting threw out an application filed by the Zenith Bank Ghana Limited seeking leave of the court to be party in the suit.

According to the Supreme Court, the presence of the applicant would further delay the case which has already suffered several adjournments at the lower Court.

The Zenith Bank was rather ordered to file its “Amicus–Curaes”, that is to file the intended document that it would to file to the court.

The Zenith Bank contention, according to its legal counsel, Nana Ato Dadzie was that 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.

But the Attorney General opposed the application and said it was an attempt to further delay the case and that the Zenith Bank at all material time when the case was pending at the lower court failed to apply to be joint in the case.

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 interested party  do not need to be join in the matter.

The Supreme Court had earlier ruled on a preliminary objection by counsel for Balkan Energy, Mr. Ace Ankomah that the Court has no jurisdiction to hear the matter.

The Supreme Court in that ruling held that it has supervisory jurisdiction to hear the matter since it borders on constitutional matters.

The genesis of the case was that, the Ministry of Energy on July 27, 2007, entered into a Power Purchasing Agreement with a US- based Energy Company, Balkan Energy Company Limited for the “Osagyefo Barge” during the erstwhile NPP administration without passing through the parliament of Ghana for approval per Article 181(5) of the 1992 constitution.

But the NDC government after assuming into political power in 2009 took a second look at the transaction and realized there were legal lapses in the entire power purchasing agreement.

Following that the Ministry of Justice and Attorney General on behalf of the republic dragged the Balkan Energy Company Ghana and the Balkane Energy PLC and its director 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.

Dr. Benjamin Kunbour, the Attorney General and Minister of Justices were present, as well as Mr. Ace Ankomah for the defendants and Nana Ato Dadzie for Zenith Bank, the interested party in the suit.