20-Year review of judgement debt payments in Ghana — Impact, causes, remedies (III)

In this section, we highlight selected cases of judgment debts to illustrate the extent to which negligence, blatant disregard for public procurement laws, and illegal abrogation of contracts by public officials in their line of duty leads to judgment debt awards against the State and results in the payment of huge sums from the public coffers.

Table 4 provides a summary of the cases described in the sub-sections below and other selected cases.

Judgment debt payments due to contractual breaches

Rockshell International Ltd vs. Attorney General

How GH¢55,305.60 Contractual obligation became US$35,000,000.00 Judgment Debt Payment.

The Report of the Sole Commissioner for Judgment Debt Enquiry contained the payment of US$35 million, equivalent to GH¢51,047,500 (using 2010 $/GHc rate) to Rockshell International Ltd as negotiated settlement payment for performance under a contract to supply stones to the Keta Sea Defence Project.

The facts as captured in the above report are summarised below.

In December 1983, the Government of Ghana awarded Rockshell International Ltd a contract to supply Stones for the construction of the Keta Sea Defence Project.

Rockshell performed its obligations under the contract and on 28 January 1986, issued a certificate for payment of five hundred and fifty-three million and fifty-six thousand old cedis (¢553,056,000.00), or in Ghana cedis terms, fifty-five thousand, three hundred and five cedis, sixty pesewas (GH¢55,305.60).

After several unsuccessful demand notices and follow-ups, the company instituted legal action against the State and obtained a favorable judgment on 20th November 2006. A total of Seventy million United States Dollars (US$70 million) was awarded by the court in favor of Rockshell International.

The government at the time could not settle its indebtedness to the company.

Change in govt

Following a change in government in January 2009, the new government was faced with mounting cases of outstanding judgment debt payments suffocating the government.

The government decided to re-negotiate with significant judgment creditors, one of which was Rockshell International Ltd.

The negotiations teams were led by Philip Addison, who was Counsel for Rockshell International and on the Government side by the Attorney General at the time, Betty-Mould Iddrisu.

The two parties, on 12th June 2009, agreed on the payment in installments totaling US$35 million as full and final settlement of the liability of the state to the company.

Payments commenced on 22nd June 2009 with US$10.00 million, US$15.00 million was paid in March 2010, US$5.00 million in July 2010, and ended with the final payment of US$5.00 million on 5th August 2010, thus bringing the case between Rockshell International and the Government of Ghana to a close.

Bank of Africa vs. Ghana Post & Messrs Brick House

An unauthorised contract involving a GH¢45,000 loan cost taxpayers GH¢215,168.23

The Auditor-General’s report on public boards, corporations, and other statutory institutions for the period ended 31 December 2019 revealed that Management of Ghana Post Company Ltd awarded a contract to Messrs Brick House (GH) Ltd to renovate the Kaneshie Post office at the cost of GH¢125,022.15 in March 2009.

Aside from the fact that Messrs Brick House lacked the financial capacity to execute the contract as prescribed by the Public Procurement Act of 2003, the following pre-qualification documents were also not provided:

. Tax clearance certificate

. Business registration certificate

. Ministry of Works and Housing Certificate of classification

. Letters of Credit/ Bid Security/Performance Bond and

. SSNIT Clearance

Loan from Amalgamated Bank

Messrs Brick House, jointly with Ghana Post, contracted a GH¢45,000 loan from Amalgamated Bank Ltd (now Bank of Africa) to finance the project. Upon completing the project, Ghana Post failed to pay Messrs Brick House the certificate amount of GH¢95,883.63 for work done.

The bank filed a suit in court against Messrs Brick House and Ghana Post for failure to pay the loan. Judgment was entered against Ghana Post for a sum of GH¢169,168.23, constituting interests accrued on the GH¢45,000 loan.

An additional GH¢46,000.00 was claimed by Messrs Brick House. In this particular case, the Auditor-General recommended that the Board and Managing Director of Ghana Post be held liable for the loss and made to refund GH¢90,146.08 (the difference between the contract sum and the total debt incurred).