Isofoton to vomit judgement debt following Supreme Court order
Spanish Energy Company, Isofoton S. A. today suffered a huge setback when the Supreme Court directed it to refund the cedi equivalent of $325,472 it received from the government in March 2011.
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The nine-member court presided over by Professor Justice S. K. Date-Bah also directed the company to refund all moneys it had received from the government on the grounds that the agreements resulting in the payments were unconstitutional and, therefore, null and void.
The interest accruing should date back to 2011, the year the money was paid until date of final judgement.
The ruling comes a week after the court handed Mr Amidu a similar victory in a case against Waterville Holdings Limited.
Isofoton was seeking more than $1.3 million in judgement debt over claims that a contract it signed with the government was wrongfully terminated.
It was said to have been contracted to execute agricultural irrigation and rural electrification projects based on solar technologies in 2006 but the then government re-awarded the contract to another Spanish company, Elecnor.
With the advent of a new government in 2009, Isofoton accused the former administration of illegally abrogating the contract and subsequently sued for compensation at the High Court.
The government later made part payment of $325,472 of the claim put up by Isofoton, in consonance with a default judgement at the High Court.
In a unanimous decision, the court also directed the Registrar of the Supreme Court to refer the conduct of lawyers for Isofoton to the General Legal Council, following a complaint by the plaintiff on their conduct in the case.
Other members of the panel were Mr Justice Julius Ansah, Mrs Justice Sophia Adinyira, Ms Justice Rose Owusu, Mr Justice Jones Dotse, Mr Justice Annin Yeboah, Mr Justice Paul Baffoe-Bonnie,
Mr Justice N. S. Gbadegbe and Mrs Justice Vida Akoto-Bamfo.
Mrs Justice Adinyira was absent due to ill-health but sent a written consent to the judgement which was read in open court.
In his pleadings before the court, Mr Amidu, the plaintiff, said Isofoton had no basis to make the claims against the government because it had no contract with the government of Ghana, the breach of which should result in the payment of judgement debt.
Isofoton is involved in designing, manufacturing and supplying solar energy products.
According to the Supreme Court, the High Court, presided by Mr Justice Ernest Obimpeh, had no jurisdiction in determining the case and should have referred the matter to the Supreme Court for determination.
Agent’s name struck out of suit
Mr Amidu, who received commendation from the court, had prayed the court to order Isofoton and its agent, Mr Anane Adjei Forson, to refund the money, but the court held a different view and, accordingly, struck out Mr Forson’s name from the suit.
According to the court, Mr Forson was only an agent for Isofoton and, therefore, not a proper person to be sued.
It also stated that Mr Amidu had not shown any p
roper cause of action against Mr Forson in his pleadings before the court.
It, accordingly, upheld Mr Forson’s argument that he had only acted for Isofoton on professional grounds and could, therefore, not be held liable for any wrongdoing.
Isofoton’s demand and court’s orders
The government had started paying in instalments the money Isofoton claimed, but the Supreme Court, on March 7, 2013, put a hold on further payments until the final determination of Mr Amidu’s suit.
It also stayed all proceedings in connection with the case at the lower courts until the final determination of the suit which challenged the constitutionality of the payment to Isofoton by the government.
The court’s order was aimed at not rendering Mr Amidu’s case a let down, in the event he succeeded in his claim against the parties in the case on behalf of Ghanaians.
Lower court has no locus
Following from the court’s latest decision, the effect is that the lower court does not have the locus to continue hearing the case because the court was of the view it did not have jurisdiction.
According to the court, the entire proceedings on the matter and subsequent garnishee order from the lower court was, therefore, null and void and of no legal effect.
According to the Supreme Court, it had power under Article 2 (2) of the 1992 Constitution to set aside any consent judgement that was at variance with the Constitution.
The judgement
Reading the judgement on behalf of the court, Prof Justice Date-Bah questioned the jurisdiction of the High Court to have entertained Isofoton’s suits numbers BC23/2008 and BC24/2008 against the state.
It further sustained Mr Amidu’s argument that Isofoton lacked the locus standi to commence that action because it did not have the fiat to sue the government and for that reason, it could not have had any operative contract with the Government of Ghana.
The court held that on a true and proper construction of Article 181(3) and (4) of the Constitution and Section 7 of the Loans Act, (Act 335), the laying before and approval on August 1, 2005 of the terms and conditions of the Second Financial Protocol between the Republic of Ghana and the Kingdom of Spain for 65 million euros for the implementation of development projects and programmes in Ghana did not nullify the effect of Article 181(5) of the 1992 Constitution that mandates further laying before and approval of any specific international business or economic transaction to which the government is a party, even if payment had to be made from the said loan approval by Parliament.
This position of the court stemmed from Isofoton’s argument that there was no need for the sub-contracts for agric irrigation and solar energy projects to go to Parliament because the umbrella agreement had already gone to Parliament for approval.
However, the court held that Parliament had the legitimate interest to scrutinise project implementation agreements to ensure transparency, openness and parliamentary consent in all transactions.
It said it was imperative for all international transactions which government was a party to go to Parliament for approval.
Complaint About Lawyers
Responding to Mr Amidu’s prayer to the court to sanction defence lawyers in the case for misconduct, the court held that the appropriate forum for such issue was the Disciplinary Committee of the General Legal Council.
It also urged Mr Amidu to follow up with his complaint at that forum.
Capacity of Mr Amidu
Isofoton had challenged the locus of Mr Amidu to bring up the suit against it, but the court held that such argument was flawed, because Mr Amidu had the right under the law to protect the Constitution and the public purse.
Mr Amidu Praised
The court expressed appreciation and praised Mr Amidu for his public spiritedness in bringing up the issue for determination.
It also made reference to the court’s judgement on June 14, 2013 which directed Waterville Holdings to refund an amount of 25 million euros it had received from the government due to what the court termed as unconstitutional the contracts Waterville entered into with the government on April 26, 2006.
Justice Dotse’s Concurring Opinion
Mr Justice Dotse held in a concurring opinion that the only thing that the learned trial judge should have done was to take advantage of the provisions in Article 130 (2) of the Constitution, in view of the fact that it was only the Supreme Court that had original jurisdiction in dealing with the issues raised before the trial court in respect of Article 181 of the Constitution.
Article 130 (2) of the 1992 Constitution states; “Where an issue that relates to a matter or question referred to in clause (1) of this article arises in any proceedings in a court other than the Supreme Court, that court shall stay the proceedings and refer the question of law involved to the Supreme Court for determination and the court in which the question arose shall dispose of the case in accordance with the decision of the Supreme Court.”
Clause 1 (a) refers to the exclusive jurisdiction of the Supreme Court having exclusive original jurisdiction relating to all matters in relation to the enforcement of interpretation of the Constitution, while Article 130 Clause 1 (b) refers to all matters arising as to whether or not an enactment was made in excess of the powers conferred on Parliament or any other authority or person by law or under the Constitution.
Mr Justice Dotse, accordingly, urged trial courts to take note and refer all matters of constitutional interpretation and or enforcement which genuinely and seriously arise in any proceedings before them to the Supreme Court which had the jurisdiction to deal with such matters.
The “brazen and bold attempt by the learned trial Judge to usurp the powers of this court are not in tune with the jurisdictional limits of the High Court as provided for in articles 140 and 141 of the 1992 Constitution and sections 15, 16, 17, 18, 19, 20 and 21 of the Courts Act, 1993 Act 459,” Mr Justice Dotse held.
“Trial courts must therefore hasten slowly when issues of constitutional interpretation are raised before their courts, and unless the constitutional provisions in issue have been over flogged by this Court, the necessary reference must be made to the Supreme Court for it to assume its jurisdiction,” he stated.
Mr Justice Dotse added that it was only by strict adherence to these basic principles that the jurisdictional limits set in the 1992 Constitution, the Courts Act, 1993 Act 459 and other statutes would be honoured in their observance than in their breach.
‘We respect but disagree with court’
Reacting to the Supreme Court’s order to Isofoton to refund the money, Mr Forson said although he disagreed with the court, he respected its decision.
He accused the government of misleading Isofoton to enter an agreement which had not received parliamentary approval and emphasized that it was not the duty of Isofoton to send the agreement to Parliament.
“The government of Ghana refused to do what was right. Why should Isofoton be made to suffer for government’s wrongdoing?” Mr Forson queried.
According to Mr Forson, he had documents to prove that the government had agreed to pay Isofoton for all the losses it had incurred and at present, the government owed Isofoton about $3 million.
The amount, he explained, included interests.
For that reason, he urged the government to deduct the $325,472 Isofoton had so far received and return the balance to Isofoton.
Mr Forson said he was waiting for further directive from lawyers of Isofoton and confront the government with relevant documents at the appropriate time.
Story by Mabel Aku Banaseh
Writer’s email: [email protected].