"Clause 19. SETTLEMENT OF DISPUTES
The parties shall endeavour to settle any and all disputes, differences, or disagreements under this contract through conciliation in the first instance. In the event that the parties cannot settle such disputes or differences, the aggrieved party may refer that matter for arbitration under the UNCITRAL rules."
4.16.1 On 11 August 2011, Bankswitch requested the bifurcation of the proceedings (discussed in Paragraphs 4.12 to 4.14 above). Ghana failed to submit its comments on draft Procedural Order No 1 by 12 August 2011. On 20 September 2011, therefore, the Tribunal extended the deadline for comments to 21 October 2011, and notified the Parties that it would be issuing a modified version of draft Procedural Order No 1 – which it attached for their consideration – if the Respondent did not provide its comments by this date.
4.16.2 As no communication was received from the Respondent regarding the modified draft Procedural Order No 1, the Tribunal issued Procedural Order No 1 on 25 October 2011, which included, inter alia, a timetable for written submissions and provisions for documentary evidence.
4.16.3 On 1 December 2011, in response to a request for clarification from the Claimant, the Tribunal amended Paragraph 2.3 of Procedural Order No 1 regarding the transmission of written submissions.
4.18.1 On the deadline, 29 February 2012, the Tribunal received a proposed procedural time schedule from the Claimant, but did not hear from the Respondent. In a facsimile dated 2 March 2012, the Respondent requested an extension of three months to the procedural timetable set forth in draft Procedural Order No 3. By letter dated 5 March 2012, the Claimant objected to the proposed extension, noting that (i) the Respondent's comments were received after the deadline set by the Tribunal; (ii) the Respondent had ample opportunity to review the merits of the case as the Notice of Arbitration was filed on 4 March 2011; and (iii) the Respondent had already received several extensions of time.
4.18.2 By a letter dated 9 March 2012, which was corrected by a letter dated 14 March 2012 and incorporated in Paragraph 2.1 of Procedural Order No 3, the Tribunal – "in the view of the desirability of facilitating the Respondent's participation in the case"– granted the Respondent an additional four weeks to submit its Statement of Defence. The Tribunal also provided a detailed procedural time schedule, and clarified that The Hague would remain the seat of arbitration pending receipt of the Respondent's Statement of Defence.
4.18.3 Owing to the Respondent's recurrent failures to participate in the arbitration, the Tribunal stated the following at Paragraph 1 of Procedural Order No 3:
"[The] Respondent having failed to submit a Statement of Defence by 10 February 2012, the proceedings will continue under Article 28(1) of the UNCITRAL Rules 1976.
If [the] Respondent fails to appear at the Main Hearing, the Tribunal will proceed under Article 28(2) of the UNCITRAL Rules 1976 which provides that '[i]f one of the parties, duly notified under these Rules, fails to appear at a hearing, without showing sufficient cause for such failure, the arbitral tribunal may proceed with the arbitration.'
If [the] Respondent fails to produce documentary evidence, the Tribunal will proceed under Article 28(3) of the UNCITRAL Rules 1976 which provides that '[i]f one of the parties, duly invited to produce documentary evidence, fails to do so within the established period of time, without showing sufficient cause for such failure, the arbitral tribunal may make the award on the evidence before it.'"
4.18.4 At Paragraph 5.1 of Procedural Order No 3, the Tribunal notified the Respondent of the adverse consequences of non-conformance to the procedural time schedule, as follows:
"Considering that the Tribunal has accommodated [the] Respondent with multiple extensions of time and ample opportunity to be heard; and in the interests of fairness, to prevent undue surprise, and for the purposes of Article 28(2) of the UNCITRAL Rules 1976]; the Tribunal shall construe the time schedule set forth in Paragraph 4.1 strictly. The Tribunal shall consider implementing adverse inferences, allocation of costs due to further delays, and/or other penalties for deviation from, or non-conformance with, the Schedule of paragraph 4 above."
4.18.5 At Paragraph 3.2 of Procedural Order No 3, the Tribunal set The Hague, the Netherlands as the hearing venue.
4.19.1 On 4 April 2012, the Respondent requested an extension until 20 April 2012 to indicate a date by when it could file its Statement of Defence. On 6 April 2012, the Tribunal requested that the Respondent submit its Statement of Defence on or before 20 April 2012 along with its Reply Submission on the Seat of Arbitration. The Tribunal amended the procedural time schedule to reflect the extended deadlines.
4.19.2 On 20 April 2012, the Respondent submitted its Statement of Defence and Reply Submission on the Seat of Arbitration. The Respondent also requested the Tribunal to allow it to serve its Counter Memorial by 11 September 2012 and to vacate the July and August 2012 hearing dates. The Tribunal gave the Claimant until 24 April 2012 to comment on this request.
4.19.3 On 24 April 2012, the Claimant requested that the Tribunal "strictly enforce the schedule dates in [Procedural Order No 3] and the Tribunal's letter dated 6 April 2012 and deny the Respondent's requests". By letter dated 9 May 2012, the Tribunal offered to postpone the hearing to the week of 14 January 2013, with the consent of the Parties, provided that the Respondent pay its arrears on deposits. On the same date, the Claimant rejected the proposal. For its part, by letter dated 15 May 2012, the Respondent's counsel agreed with the Tribunal's proposal.
4.19.4 By letter dated 16 May 2012, the Tribunal clarified that it meant only to solicit comments regarding practical impediments to the hearing being set for the week of 14 January 2013, and asked the Claimant to inform the Tribunal of any such impediments and their nature.
4.19.5 On 23 May 2012, the Respondent reiterated its request that the submission of the Counter Memorial be postponed until 11 September 2012. On the same day, the Claimant requested for the strict enforcement of the dates set out in Procedural Order No 3 and the Tribunal's letter of 6 April 2012.
4.19.6 By letter dated 25 May 2012, the Tribunal postponed the hearing to the week of 14 January 2013, and attached a draft of Procedural Order No 4, which incorporated a revised procedural agenda and time schedule, on which the Parties' comments were requested by 31 May 2012.
4.19.7 By letter dated 31 May 2012, the Claimant informed the Tribunal of its agreement with Procedural Order No 4, insofar as the Tribunal wished to maintain the procedural time schedule set out therein. By letter of the same date, the Respondent proposed a revised procedural time schedule and requested an additional month to file its Counter Memorial, suggesting that the second round of document requests be foregone in order to accommodate the change.
4.19.8 On 31 May 2012, the Tribunal requested the Claimant to respond to the Respondent's request by 4 June 2012. On that date, the Claimant requested the Tribunal to enforce the scheduled dates strictly.
4.19.9 On 5 June 2012, the Tribunal noted that the Parties had not yet reached consensus on the procedural time schedule and requested that the Respondent explain why it needed an additional month to file its Counter Memorial (which the Respondent did on 7 June 2012). On 8 June 2012, the Claimant reiterated its request for the strict enforcement of the procedural time schedule contained in draft Procedural Order No 4.
4.19.10 By letter dated 14 June 2012, the Tribunal granted the Respondent's request for the amendment of the draft procedural time schedule, and set 6 August 2012 as the deadline for the submission of the Counter Memorial. The Tribunal indicated its willingness to work with a single round of document production, and provided a procedure for the ad hoc resolution of contested document requests, if any. Transmitted with its letter was an updated draft Procedural Order No 4, on which the Tribunal requested the Parties to comment by 18 June 2012.
4.19.11 As the Parties provided no further comments on this matter, the Tribunal issued Procedural Order No 4 on 22 June 2012. This procedural order contained provisions regarding (i) the place of arbitration and the venue of the hearing; (ii) the IBA Rules on the Taking of Evidence in International Arbitration ("IBA Rules"); (iii) an Agreed List of Issues; (iv) the Sequence of the Proceedings; (v) the Documentary Evidence and Evidence of Fact and Expert Witnesses; (vi) the Hearing, Hearing Bundles, and Timetable; and (vii) the Rulings by the Chairperson.
4.20.1 During the telephone conference itself, the Respondent requested the postponement of the Pre-Hearing Telephone Conference to accommodate the Ghanaian national elections. With the consent of the Claimant, the Tribunal gave the Parties until 21 December 2012 to provide written answers to its Questionnaire for the Pre-Hearing Telephone Conference ("Questionnaire") (see Paragraph 4.52 below). The Questionnaire was re-sent to Ms Adusu to ensure receipt by the Respondent.
4.20.2 On 21 December 2012, the Claimant provided its answers to the Questionnaire. Despite the accommodation made for it, however, the Respondent failed to provide answers to the Questionnaire by either the original deadline of 21 December 2012 or the revised deadline of 4 January 2013, which the Tribunal granted on its own motion.
4.20.3 On 8 January 2013, therefore, the Tribunal issued Procedural Order No 5, which was based solely on the Claimant's answers to the Questionnaire. While Procedural Order No 5 dealt primarily with Hearing Directions, it also reiterated the provisions on default of which the Respondent was initially made aware at Paragraph 1 of Procedural Order No 3 (reproduced at Paragraph 4.52 below).
4.20.4 Although the Respondent had not requested the presence of any of the Claimant's fact witnesses, the Tribunal directed the Claimant by letter dated 28 December 2012 to "proceed on the basis that all of its witnesses should be present for the Evidentiary Hearing in The Hague as the Tribunal will likely want to hear from all of the Claimant's witnesses in any event". The Tribunal altered this direction in Procedural Order No 5, where Paragraph 4.3 stated that the Tribunal was not committing itself to calling any of the witnesses in case of the Respondent's absence at the Evidentiary Hearing and Paragraph 6.1 allowed the Claimant, in response to its 5 January 2013 application, to produce certain witnesses by videoconference.
4.20.5 Although the Respondent had represented that it would participate in this arbitration, it did so to only a limited extent, failing to meet deadlines and to file submissions, in breach of the Tribunal's directions. To address the lack of participation of the Respondent, the Tribunal reissued the following direction at Paragraph 1.1 of Procedural Order No 5:
"1.1.1 If [the] Respondent fails to appear at the Main Hearing, the Tribunal will proceed under Article 28(2) of the UNCITRAL Rules 1976 which provides that '[i]f one of the parties, duly notified under these Rules, fails to appear at a hearing, without showing sufficient cause for such failure, the arbitral tribunal may proceed with the arbitration.'
1.1.2. If [the] Respondent fails to produce documentary evidence, the Tribunal will proceed under Article 28(3) of the UNCITRAL Rules 1976 which provides that '[i]f one of the parties, duly invited to produce documentary evidence, fails to do so within the established period of time, without showing sufficient cause for such failure, the arbitral tribunal may make the award on the evidence before it.'"
4.22.1 Owing to the failure of Ghana to pay for its share of the initial deposit, the Tribunal requested, by letter dated 12 August 2011, that the Claimant provide a substitute payment pursuant to Article 41(4) of the UNCITRAL Rules 1976. As noted by the 12 August 2011 letter, this substitute payment under Article 41 of the UNCITRAL Rules 1976 is to either be refunded or accounted for in this Award. In response to this request, the Claimant provided an additional EUR 17,500, receipt of which was acknowledged by the PCA by letter dated 17 August 2011.
4.22.2 The Respondent failed to reimburse the Claimant for the substitute payment by the deadline of 19 March 2012.
4.23.1 By letter dated 2 April 2012, the PCA acknowledged receipt of the EUR 100,000 from the Claimant.
4.23.2 As the Tribunal did not receive the Respondent's supplementary deposit by the 30 March 2012 deadline, on 6 April 2012, it notified Ashurst LLP (which the Respondent had engaged on 3 April 2012) of the outstanding deposit balance of the Respondent – consisting of both the substitute payment of EUR 17,500 owed to the Claimant and the EUR 100,000 owed to the PCA – and requested payment as soon as possible.
4.23.3 By letter dated 24 April 2012, and in view of the absence of any indication from the Respondent as regards its efforts to pay its arrears on deposits, the Tribunal requested "(i) confirmation [from the Respondent] that it intend[ed] to contest this arbitration in accordance with the directions of the Tribunal; and (ii) advice as to when payment of its overdue deposits will be made."
4.23.4 By letter dated 26 April 2012, the Respondent (i) confirmed that it intended to contest the arbitration and (ii) notified the Tribunal that it was awaiting client's instructions on the payment date of the outstanding deposits. On 3 May 2012, the Respondent informed the Tribunal that the Ghanaian Ministry of Finance was processing the payments. On 15 May 2012, the Respondent's counsel indicated that it had received the outstanding EUR 117,500 from the Government, and would be transferring the whole sum to the PCA the next day.
4.23.5 By letter dated 18 May 2012, the Tribunal acknowledged receipt of EUR 117,500 from the Respondent. The PCA subsequently refunded EUR 17,500 of the Respondent's deposit to the Claimant.
4.26.1 Response to the Request for Interim Relief: The Respondent was given 56 days to respond to the Claimant's Request for Interim Measures, including two extensions amounting to 28 additional days. At the end of this extended period, however, the Respondent had yet to submit a response. The Tribunal therefore proceeded to deal with the Claimant's request based on the Claimant's submission alone (discussed in Paragraphs 4.37 to 4.43 below).
4.26.2 Statement of Defence : Paragraph 1.1(b) of Procedural Order No 1 gave the Respondent eight weeks from the filing of the Statement of Claim to serve its Statement of Defence. The Respondent failed to meet this deadline. By letter dated 16 February 2012, therefore, the Tribunal declared the Respondent to be in default, stating:
"Under Article 28 of the UNCITRAL Rules, the Respondent is currently in default and the Tribunal is authorized to proceed to the Main Hearing. If [the] Respondent fails to appear at the Main Hearing or present evidence, Article 28 provides that the Tribunal proceed with the arbitration in their absence and make the award on the evidence before it."
4.26.3 In Procedural Order No 3, and "in the view of the desirability of facilitating the Respondent's participation in this case," the Tribunal granted the Respondent additional time to serve its Statement of Defence, extending its deadline to 6 April 2012.
4.26.4 On 4 April 2012, the Tribunal received its first correspondence from the external counsel retained by the Respondent. In this communication, the Respondent requested a further two-week extension to file its Statement of Defence, or until 20 April 2012, stating that it had only begun representing the Government on 3 April 2012.
4.26.5 By letter dated 6 April 2012, the Tribunal granted the Respondent's request, while stating that "(i) the Statement of Claim was submitted on 16 December 2011; (ii) the Tribunal has granted numerous extensions to the Respondent in the past; (iii) there has only been one request for an extension that was supported by any justification for the delay (see the Respondent's communication of 27 January 2012 in which it cites the appointment of a new Attorney-General); and (iv) the fact that [the] Claimant's First Memorial was scheduled to be submitted on or before 20 April 2012." The Tribunal also noted that the Statement of Defence should "consist of a full written submission including factual and legal arguments and corresponding exhibits rather than a mere statement of position."
4.26.6 The Statement of Defence and the Respondent's Reply Submission on the Seat of Arbitration were filed concurrently on 20 April 2012.
4.26.7 First Memorial : Pursuant to Paragraph 5.1(a) of Procedural Order No 4, the Claimant submitted its First Memorial, together with factual exhibits, written witness statements and authorities on 11 May 2012.
4.26.8 First Counter Memorial : In response to the Claimant's First Memorial, the Respondent submitted its First Counter Memorial on 6 August 2012 pursuant to Paragraph 5.1(b) of Procedural Order No 4 along with the Respondent's single written witness statement.
4.26.9 Second Memorial : Addressing the Respondent's First Counter Memorial, the Claimant submitted its Second Memorial with responsive written witness statements pursuant to Paragraph 5.1(i) of Procedural Order No 4.
4.26.10 Second Counter Memorial : The Respondent failed to submit either its Second Counter Memorial or a Responsive Witness Statement in this arbitration, even though it was given the opportunity to do so.
4.26.11 The Claimant's Opening Written Submission : The Claimant submitted its Opening Written Submission and corresponding authorities on 17 December 2012 pursuant to Paragragh 5.1(s) of Procedural Order No 4.
4.26.12 Responsive Opening Written Submission : In Paragraph 9.1 of Procedural Order No 5, and on its own motion, the Tribunal granted the Respondent an extension to file its Responsive Written Opening Submission, which was due on 7 January 2012, and directed the Respondent to incorporate the points it would have made in its Second Counter Memorial into its Responsive Written Opening Statement.
4.26.13 The Claimant's Aide Memoire : Before completing the Evidentiary Hearing, the Tribunal invited the Claimant to file an aide memoire on the issues raised by the Tribunal during the course of the hearing.2 The Claimant stated, however, that the Tribunal's letter of 21 January 2013 referred to all of the issues covered by the Tribunal at the Evidentiary Hearing, rendering an aide memoire unnecessary.
4.26.14 Post-Hearing Submissions : As discussed at Paragraphs 4.77 to 4.78 below, the Respondent requested the Tribunal to adjourn the proceedings for a few weeks and applied for leave to make submissions "on the constitutional and other legal issues." The Tribunal denied the Respondent's application for an adjournment, but directed the Parties to file two rounds of simultaneous Post-Hearing Submissions on a limited number of legal issues by 5 February 2013.
4.26.15 The Respondent notified the PCA on 4 February 2013 that the Solicitor-General would be unable to sign the Respondent's Post-Hearing Submission until 6 February 2013. By letter dated 5 February 2013, therefore, the Tribunal extended the deadline for the Post-Hearing Submissions of both Parties to 6 February 2013.
4.26.16 On 6 February 2013, both Parties submitted their Post-Hearing Submissions. The Respondent was delayed in submitting hard copies of its Post-Hearing Submission and supporting documents but, once received, the documents were transmitted to the Claimant and Tribunal. On 24 February 2013, the Tribunal requested the Respondent to reproduce pages from its supporting documents that were illegible in the copies of the Tribunal, but the Respondent never complied with this request.
4.26.17 By letter dated 14 February 2013, the Respondent requested a one-week extension to the deadline for its Second Post-Hearing Submission, citing "challenges" faced by the Ministry of Justice. Although the Claimant objected to this request, the Tribunal granted the requested extension and set a new deadline for 25 February 2013.
4.26.18 On 25 February 2013, the Parties transmitted their Second Post-Hearing Submissions.
4.26.19 On 14 March 2013, the Tribunal requested a further Post-Hearing Submission on two questions:
• Do the Parties accept the description of the Doctrine of Incorporation (i.e., the incorporation of principles of customary international law into their domestic law) under principles of Ghanaian law as it is set out in TIYANJANA MALUWA, INTERNATIONAL LAW IN POST-COLONIAL AFRICA at 37 (Kluwer Law International 1999) (including the citations of Lardan v Attorney-General & Others (No. 1) ; Lardan v AttorneyGeneral & Others (No. 2), West Afr. L.R. (1958) at pp 55 and 114; and The State v Schumann, 39 I.L.R. 433)?
• May a tribunal apply principles of national law to the exclusion of principles of customary international law in light of Article 3 of the International Law Commission's Articles on State Responsibility and the Norwegian Loans Case (France v Norway), ICJ Reports 1957 (Separate Opinion of Judge Lauterpacht)?
4.26.20 The Claimant transmitted its Third Post-Hearing Submission on 29 March 2013. But on 30 March 2013, the Respondent requested additional time for its submission on the basis that it did not receive the Tribunal's 14 March 2013 letter. On 1 April 2013, the Tribunal granted the Respondent's request and extended the deadline to 5 April 2013.
4.26.21 On 5 April 2013, the Respondent submitted its Third-Post Hearing Submission. The Claimant requested that the Respondent produce as soon as possible the authorities referenced in this submission, which were not initially provided. On 10 April 2013, the Respondent transmitted its authorities to the PCA, which then forwarded the same to the Claimant and the Tribunal.
4.26.22 On 18 April 2013, the Claimant applied to the Tribunal for the opportunity to submit a five-page response to the Respondent's Third Post-Hearing Submission due to the submission of several new documents related to the Respondent's position that customary international law is not part of the law of Ghana. On 24 April 2013, the Tribunal received an objection from the Respondent to the Claimant's application, and on 26 April 2013, the Tribunal granted the Claimant's request and set 30 April 2013 as the deadline for such submission. The Claimant submitted its Submission on the Respondent's Third Post-Hearing Submission on 30 April 2013.
4.26.23 On 10 July 2013, the Respondent, without prior application, submitted two letters to the Tribunal along with three Ghanaian Supreme Court cases for the Tribunal's attention. The Claimant responded to the Respondent's letters on 13 July 2013 and addressed the three cases submitted by the Respondent. As the Tribunal has determined that neither Party would be prejudiced by the consideration of these three cases, it has taken them into consideration in this Award.
4.26.24 Statements of Costs : On 29 July 2013, pursuant to Articles 38 and 40 of the UNCITRAL Rules, the Tribunal requested the Parties to submit their respective statements on the quantification and allocation of the costs incurred in this arbitration by 12 August 2013. Although the Claimant submitted its Statement of Costs on 12 August 2013, the Respondent requested, and was granted, a one-week extension to file its own statement until 21 August 2013. The Respondent submitted its Statement of Costs on 21 August 2013.
4.35.1 For the Claimant: (i) First Witness Statement of Kwabena Appenteng dated 12 March 2012; (ii) First Witness Statement of Francis Darlington Kwashie dated 7 May 2012; (iii) First Witness Statement of Derek David Mensah Asamoah dated 7 May 2012; (iv) First Witness Statement of Paul Osei-Kwabena dated 7 May 2012; (v) First Witness Statement of Harry Owusu dated 22 March 2012; (vi) First Witness Statement of Dr Anthony Akoto Osei dated May 2012; and (vii) Responsive Witness Statement of Kwabena Appenteng dated 5 October 2012.
4.35.2 For the Respondent: First Witness Statement of William Kofi Larbi dated 6 August 2012. The Respondent did not submit any responsive witness statement.
"Before ruling on [the] Respondent's application for a deferral of the Hearing dates, the Tribunal would like to have [the] Respondent's (i) confirmation that it intends to contest this arbitration in accordance with the directions of the Tribunal; and (ii) advice as to when payment of its overdue deposits will be made."
"The Tribunal has given careful consideration to all the circumstances of the case. It believes that the best interests of the arbitration as a whole will be served by a consolidated hearing in one sitting at a date after July and August which will enable both parties to better assist the Tribunal to conduct a fair and efficient arbitration.
4.50.1 First, although the original schedule complied with due process in the circumstances of this case, the Tribunal believed that there would be a better arbitration if the hearing were conducted in a single session and at a date later than both the July or August dates.
4.50.2 Second, the Tribunal wished to avoid prejudging the complexity of the issues to be tried or the evidence to be presented before reviewing both Parties' Memorials and Witness Statements. It also wished to avoid any late applications for adjournments and/or the admission of new evidence, which might disrupt the hearing schedule. The Tribunal noted that the Claimant had filed six Witness Statements and one Expert Opinion, and was unaware of how many witnesses the Respondent would be calling for cross-examination.
4.50.3 Third, as the Claimant had not indicated that it would be unavailable for a hearing on the week of 14 January 2013, the Tribunal was not aware of any logistical reasons for why the hearing could not take place at that time.
"If [the] Respondent fails to appear at the Main Hearing, the Tribunal will proceed under Article 28(2) of the UNCITRAL Rules 1976 which provides that '[i]f one of the parties, duly notified under these Rules, fails to appear at a hearing, without showing sufficient cause for such failure, the arbitral tribunal may proceed with the arbitration.'
If [the] Respondent fails to produce documentary evidence, the Tribunal will proceed under Article 28(3) of the UNCITRAL Rules 1976 which provides that '[i]f one of the parties, duly invited to produce documentary evidence, fails to do so within the established period of time, without showing sufficient cause for such failure, the arbitral tribunal may make the award on the evidence before it.'"
4.60.1 Francis Darlington Kwashie (Chief Operating Officer, Bankswitch);
4.60.2 Derek David Mensah Asamoah (Chief Financial Officer, Bankswitch);
4.60.3 Paul Osei-Kwabena ("Mr Osei-Kwabena") (former Chairman, Ghana Revenue Agencies Governing Board);
4.60.4 Harry Owusu ("Mr Owusu") (former Executive Secretary, Ghana Revenue Agencies Governing Board);
4.60.5 Anthony Akoto Osei (former Minister of State, Ministry of Finance and Economic Planning); and
4.60.6 Andy Akoto (Engagement Partner, Project Team, KPMG).
4.70.1 The Claimant requested the Tribunal to sign the revised Award on Agreed Terms in lieu of all signatures because the Respondent had evidenced its acceptance of the award without any reservation, and the Claimant had accepted the position on the amount of damages, which was the last outstanding disputed issue (see the Tribunal's analysis at Paragraphs 11.8 to 11.22 below).
4.70.2 In the event that the Tribunal denied the Claimant's request to sign the draft Award on Agreed Terms in lieu of the Respondent's signatures, the Claimant alternatively withdrew its claims for relief as set out under Chapter 13 of its Statement of Claim except for (i) Prayer Alternative A(iv) and (ii) Primary and Alternative Prayers B, C and D. This meant that the Claimant (i) withdrew the claim for specific performance [Chapter 13 of the Statement of Claim, A(i) and A(ii)]; (ii) requested that the Tribunal declare or find that the Respondent had breached the Agreement [Chapter 13 of the Statement of Claim, A(iv)(1)]; (iii) requested that the Tribunal order the Respondent to pay "Breach Damages" and "Extra Costs" up to the date of the final Arbitral Award, within 14 days after the date of the final Arbitral Award [Chapter 13 of the Statement of Claim, A(iv)(2)], and (iv) request the Tribunal to grant all that was claimed under Sections B, C and D [Chapter 13 of the Statement of Claim, B, C, and D]. A full discussion of the amended claims for relief is found at Paragraph 7.2 below.
4.70.3 The Claimant also requested leave to submit new evidence (Exhibit C-97) on the FOB Import Values predicted by the KPMG Report I and calculated in Exhibits C-59 and 67.
"After considering the correspondence of the Parties and all of the circumstances of the Arbitration, the Tribunal has determined that a further tranche of the Evidentiary Hearing will not be necessary, but that Post-Hearing Submissions on a limited number of issues would assist the Tribunal in its deliberations. Such Post-Hearing Submissions shall discuss the following issues:
1. Whether Article 181 of the Ghanaian Constitution applies, and if so, whether the Agreement was valid and enforceable under Ghanaian law;
2. The meaning of the phrase "with the necessary modifications by Parliament" in Article 181(5), and whether there has been any such "modification" made by Parliament to extend the application of Article 181 beyond the issuance of loans out of any public fund or public account to "international business transactions";
3. The (i) legal duration of the Agreement, (ii) legal duration of the period during which the Claimant was entitled to charge the Service Fee, and (iii) when such period commenced;
4. Whether, under Ghanaian law, the requirement of a Certificate of Satisfaction could be waived, and if so, what acts are to be relied on for such waiver;
5. The applicable rate of interest to be applied to an award of damages, if any, both pre- and post-Award;
6. The appropriate calculation of damages, taking into account the Tribunal's questions from the Evidentiary Hearing on 16 January 2013 (e.g., discounting of future lost profits)."
not be appropriate to decide finally any issue of assessment or allocation of costs in this Award Save as to Costs without affording the Parties a further opportunity to address the Tribunal in light of its decisions in this Award Save as to Costs. Accordingly, this is an Award Save as to Costs on the issues specifically mentioned except legal and arbitration costs. The Tribunal will issue the necessary orders for the Parties to submit their arguments on the assessment and allocation of costs and will determine the costs of the arbitration and legal costs at a later date by a further Award or Order.
"Clause 4: OBLIGATIONS OF CONSULTANTS
(i) [Bankswitch] shall submit quarterly reports to the [Government] on the operation of the systems to include both performance of the systems and all other reports requested by the [Government].
(ii) [Bankswitch] hereby agree and undertake to provide the services and implementation activities applying the best industry practices and the highest possible professional standards.
(iii) [Bankswitch] shall develop a software and hardware system out of their menu of patents to achieve the development, implementation and keeping of an up-to-date Transaction Price Data Base on prices of all sea and air imports into Ghana to be used by Customs Excise and Preventive Service, Ghana for the Customs valuation of imports.
(iv) In addition, [Bankswitch] shall develop electronic solutions to facilitate the following:
(a) The secure acquisition of shipping documents such that the electronic copies of original documents from carriers can be used to aid in the identification of declarations made by shippers and individuals.
(b) Provision of a Risk Management System to facilitate the identification of consignments requiring inspection based on the blacklisted importers identified through the document auditing process.
(v) [Bankswitch] shall establish a Portal platform and Development of a system that will enable:
(a) The presentation and evaluation of prototypes
(b) Documentation consistent with the systems to be deployed to facilitate easy adaptation for trouble shooting
(c) The integration of the deployed system to existing systems and extension thereof to other entities to be agreed between the parties
(d) The establishment of a hosting platform of servers and hardware to accommodate portal solutions for the agreed institutions to be served by the system
(e) [Bankswitch] shall supply the hardware and servers required to operate the system.
(f) [Bankswitch] shall employ high value professionals for management of the systems. The names and CVs of the these [sic] persons shall be submitted to the [Government] for approval
Any replacements shall be of comparable professional status and subject to approval by the [Government].
(g) [Bankswitch] shall be responsible for updating and maintaining integrity of the Price Data Base
(h) [Bankswitch] shall provide external backup facilities at different locations to reduce risk of any failure of the systems."
"Clause 6. TRAINING AND TRANSFER OF KNOW-HOW
[Bankswitch] shall provide training to identified staff to the [Government] for such periods and frequency as shall be mutually agreed for the effective operation of the system and for the transfer of know how to [the Government]'s staff.
Clause 14. SUPPORT, MAINTENANCE AND AUDIT OF SYSTEMS
[Bankswitch] and the [Government] shall carry regular audits of the systems under an audit programme to be established
[Bankswitch] shall provide the requisite maintenance support to ensure the uninterrupted operation of the system."
"Clause 5. OBLIGATIONS OF THE CLIENT
(a) The [Government] shall make available all the physical facilities required for the deployment of the systems to be provided by [Bankswitch]. These shall include sites for work stations.
(b) The [Government] shall grant and hereby grants [Bankswitch] exclusive rights on the provision of the services and development of the systems outlined herein for a period of five years subject to any extensions that may be agreed by the parties on mutually agreed terms.
(c) The [Government] shall consult with [Bankswitch] on any additional services to be provided at cost to be agreed between the parties.
(d) The [Government] shall issue the necessary administrative and policy instructions to shippers and industry operators to ensure that all shipments are captured within the data base to ensure optimization of revenues."
"Clause 7. FEES AND TERMS OF PAYMENT
(i) The parties agree that [Bankswitch] shall employ their own resources to develop the software and products to be deployed in accordance with specifications to be provided by the [Government] in annexure 'A' of this Agreement.
(ii) [Bankswitch] shall prefinance the procurement of all required hardware and related equipment in accordance with specifications provided by the [Government] in annexure 'B' to this Agreement.
(iii) In consideration of services to be provided by [Bankswitch], the [Government] shall pay the equivalent of 2/3 of 0.7% of the final invoice FOB value of all import transactions which pass through the Ghana Customs Document Management System (GCSDMS).
(iv) [Bankswitch] shall submit an invoice to the [Government] within five working days of the end of each month or such other period as may be agreed by the parties. The [Government] undertakes to make payment to [Bankswitch] within thirty (30) working days of receipt of the invoice."
"Clause 9. PILOT PHASE
The parties agree that because the systems would have to be developed at cost to enable the deliverables outlined in Clause 8 for the initial phase (Pilot) involving in particular the phasing in of the price data base, an oversight project management team comprising MOFEP/RAGB, and GETGroup/BankSwitch Ghana shall oversee the operationalization of the systems.
The GETGroup/Bankswitch Ghana shall file an inception report for review by MOFEP/RAGB being the [Government] parties who shall issue a 'Certificate of Satisfaction' following which other components of the implementation plan for the project shall kick in.
The basis for issuance of the Certificate of Satisfaction shall be the demonstrated potential of the deployed systems to increase revenues exponentially by a factor satisfactory to the [Government].
The joint project management team of MOFEP/RAGB/GETGroup BankSwitch Ghana shall take steps to resolve all implementation bottlenecks that may be identified at the initial phase of the project if feasible.
The initial phase (pilot) shall be completed within three (3) months of effectiveness."
"Clause 10. CONTRACT TERM AND REVIEW
[Bankswitch is] hereby granted a term of five (5) years for performance of the services subject to satisfactory performance under the pilot phase and fulfilment of all obligations outlined herein. The Contract may be renewed for further terms as the parties shall agree on mutually acceptable terms.
To ensure efficient management, monitoring and optimisation of the systems, a biannual review of the contract shall be undertaken by the joint project management team of MOFEP/RAGB and GETGroup BankSwitch Ghana."
"Clause 11. OWNERSHIP OF DEPLOYED SYSTEMS
The systems once deployed shall become the property of Government of Ghana.
In the event that any third party requires deployment of the system due to Ghana Customs' efficient use of the facilities, the parties agree that they shall meet to discuss a formula for the sharing of revenues that may accrue from the deployment of the system to such third parties."
Article 1.1(h) defined the term 'Effective Date' as 'the date of performance of all actions necessary for coming into force of the Agreement. '"
"Clause 12. PENALTIES
[Bankswitch] warrant[s] and undertake[s] that [its] deployed systems will generate revenues of up to 30% over the current rate of increase of 25% under existing systems.
The [Government] shall deduct and withhold 10% of fees for collections falling below the agreed threshold and warranted by [Bankswitch] all things being equal particularly where the under collections are solely attributable to defaults and non performance by [Bankswitch]."
"Clause 13. WARRANTY
[Bankswitch] warrant[s] that they own the proprietary rights including intellectual property rights to all the software systems to be deployed and that the integrity of the systems are competent for the delivery of the contracted services and for the period or periods for which they will be required."
"Clause 15. LIQUIDATED DAMAGES
[Bankswitch] shall be liable for the payment of liquidated damages at the rate of 0.1% of the contract sum for each day of delay on the implementation of any component of the system solely attributable to defaults by [Bankswitch] up to a maximum of 5% of the total contract sum."
"Clause 20. TERMINATION
This Agreement may be terminated by [Bankswitch] if the [Government] defaults in the performance of its obligations after due notice of such default is filed by [Bankswitch] and the [Government] persists in the default for 30 days.
By [the Government]
The [Government] may terminate this Agreement by giving 30 days notice if any of the following events occur and [Bankswitch] fails or refuses to provide a remedy.
If [Bankswitch] becomes bankrupt or enters into accommodation or agreement with its creditors for debt relief or goes into liquidation or receivership.
If [Bankswitch] is unable to perform a material part of the services for a period exceeding 7 working days and fails or refuses to provide any remedies provided such inability is not caused by any action or default of the [Government]."
6.16.1 Develop, customise and maintain the Ghana Customs Management System(used by CEPS to validate and process customs and trade documents) and record the results of the validation and processing;
6.16.2 Deploy the Ghana Customs Management System to assist CEPS in capturing electronically all customs duty and tax payments made by declarants and to reconcile the payments against their respective bills of entry/single administrative documents, and, where applicable, the Final Customs Valuation Report (issued by a Destination Inspection Company ("DIC") with respect to a particular consignment);
6.16.3 Introduce risk sensitivity features into the Ghana Customs Management System to secure the system and assist CEPS to execute an effective risk management process;
6.16.4 Develop the "TradeNet System" as a platform for accessing the Ghana Customs Management System and promoting the exchange of trade information between businesses and the Government; and
6.16.5 Ensure that the Ghana Customs Management System generated necessary statistical data, including data on foreign trade and revenue accounting reports that would interface with the TradeNet System.16
"The Principal enactment is amended by the substitution for section 9 of the following sections:
9. For the purpose of ensuring that the quality, quantity, price and other specifications of import goods are in conformity with the particulars on the Import Declaration Form, Invoice and any other document relevant to the goods, all commercial imports shall be subject to destination inspection of the goods at the port or point of clearance in the country.
10. The Minister may in writing appoint inspectors to conduct the destination inspection of commercial imports at the port or point of clearance of the goods."
6.25.1 GCNet : Primarily responsible for providing the communications network used by governmental and commercial participants involved with Ghanaian customs.
6.25.2 DICs : Provide database, classification and valuation services to CEPS in order to assist CEPS in its primary functions.
6.25.3 CEPS : Classify, value and inspect consignments; assess the appropriate amount of duty on consignments; and ensure that appropriate duties are paid before the goods are released.
"1. [The BRS] describes a particular business issue as identified as a result of a requirements gathering process. The document is an agreed statement of what a future system is required to do. Its intended audience is the business sponsor and the Project Steering Committee.
2. The purpose of this document is to capture the complete set of business requirements in order to validate the existing documented requirements and scope of CEPS.
3. This document does not reflect a commitment to deliver all these requirements.
4. The decision on what will be delivered will be taken once the requirements have been agreed and their impact relative to scope has been determined. This will be a joint decision between the Project team and the business.
5. Additional inclusion to scope will be determined assessing the impact on the functionality, decision of the CCB, time & effort.
6. Solution Design (Internal document) would include comprehensive illustrated examples, sample screen/outputs etc."35
"The valuation software tested in Dubai was found to be efficient and useful in performing Customs valuation functions. The team found it to be user-friendly and fashioned to solve most of the current problems in valuation. It encapsulates the entire clearance procedure from submission of documents to releasing goods out- of-Charge. It is a potent tool for monitoring, risk management and post audit scrutiny. [....] In the opinion of the team, the use of the software will greatly impact on the efficiency of the valuation officer as well as enhance the revenue generation capacity of CEPS. For these capabilities, the team highly recommends the software for use by CEPS."48
"[A] combined CEPS and BANKSWITCH team went to Dubai for a review of the Valuation software and the visiting team's report is positive. All changes recommended to upgrade the GCSDMS had been effected."56
"[The CEPS Commissioner, Emmanuel Doku stated]... this system has been designed largely with consultation and collaboration with CEPS thus making it more viable. The Commissioner added that unlike previous projects, this one is more focused and user friendly especially the valuation module which was not a component of existing modules.
[CEPS Assistant Commissioner of Valuation, Wallace Akondor stated that]... the BANKSWITCH team had faithfully acted upon comments and criticisms from CEPS to modify and update the Valuation Software. He was therefore confident the Valuation software could make a lot of difference in terms of revenue mobilization for CEPS and the country at large. He further assured the Chief Director that the Valuation module has the capacity to replace the current functions of DICS. He however cautioned that there was the need to introduce a mechanism that would verify the credibility of importers' documents from the source of supply as this was a prerequisite to the successful implementation of the WTO Agreement on Valuation. Dr Appenteng pledged to collaborate with CEPS to get this issue resolved.
The Chief Director [of MOFEP] sought information about when the DICS' contract expired and what CEPS would be doing with the valuation software in the interim. In response, the Commissioner said three (3) of the contracts would expire at the end of 2008 and the 4th one in May 2010. He indicated the software would be used by the Valuation Department to valuate import[s] alongside the DICs as well as used to handle petitions from aggrieved importers. This would afford CEPS an opportunity to acquire the requisite skills and experience in managing the software to ensure a smooth take over from the DICs.
The Executive Secretary of RAGB [Harry Owusu] said he was satisfied with the current development. He indicated that initially, other complementary organizations such as GCNet and the DICs were not cooperative to the success of the project. It was therefore a relief for him to learn that the beneficiary of the project (CEPS) was satisfied. He stressed that valuation is key to CEPS' revenue generation capacity since it serves as the base of duties and taxes collectible on imports. He also commended BANKSWITCH for using the buy-in approach in developing the software. He hoped at the end of it all CEPS and indeed, Ghana would be the beneficiaries.
The [MOFEP] Chief Director congratulated CEPS and assured the [CEPS] Commissioner of the full support of the Ministry of Finance and Economic Planning.
He also acknowledged that such projects involve heavy financial commitments and asked the Commissioner not to hesitate in submitting financial demands that might be involved in the project. He also appealed to the PIT, RAGB, MOFEP to jointly ensure the success of the project."57
"[T]he [CEPS] Commissioner confirmed verbally that [Bankswitch] had indeed provided software with the functionality given above and furthermore, that CEPS had found the software satisfactory. When pressed to explain what he meant by satisfactory, the Commissioner stated that CEPS had rejected software presented by other companies and so the use of the phrase satisfactory could be taken as a positive endorsement. The Commissioner further pointed out that the software provided would add value to the current systems in place and CEPS [was] prepared to use the software."62
"At the meeting of 18th March 2008, the Commissioner confirmed verbally that we had indeed provided software with the functionality given above and furthermore, that CEPS had found the software to be satisfactory. When pressed to explain what he meant by satisfactory, the Commissioner stated that CEPS had rejected software presented by other companies and so the use of the phrase satisfactory could be taken as a positive endorsement. The Commissioner further pointed out that the software provided would add value to the current systems in place and CEPS [was] prepared to use the software."64
"Mr Aknondor praised the valuation software and said this is the best software CEPS had seen because the software used a systematic approach in determining the value of items using both WCO and WTO principles. He added that the remarks feature in the software also makes the valuation software  better as  the officer has to state his reasons for choosing a particular value."66
"[T]he [RAGB Sub-Committee] members agreed that the Group [was] indeed doing a good job and had so far put workable systems in place. For this reason it will be fair to make payments to them whilst waiting for final integration with the GCNET system.
The Chairman said that members were privy to what the Group had started and were confident that it would yield results. He said they also appreciated that CEPS had to be in a state of readiness before the [DICs] are out so that the clearing process will not grind to a halt. Thus to ensure that this important issue is addressed, there was the need to have a 'stand-by' system which the Service can fall on at the crucial hour. This he said meant that it will be important to see to the survival of the Group until such time. He said there was therefore the need to iron out the payment issues and asked the Group to justify why they should be paid.
In his response, Dr. Kwabena Appenteng told members that the reality is that the DICs will be out of the system by the beginning of the last quarter. He said this raised very crucial issues including efficiency and level of commitment of the DICs as they fold up, readiness of CEPS to take over the function and most importantly the need to protect Government revenues for the last quarter of the year. He said the Group had an operational cost of [GH¢]2.0 million per month, which they had been paying since June 2007, but were flexible to payment arrangements terms that would be agreed on. In breaking down the costs the Finance Director of the Group told members that the figure included their communication link costs, staff costs, license and other fees.
A member in response said that costs such as license and other fees, communication link costs etc must be borne by the Group because that should be part of what the company is made of. Such costs should therefore not be seen as costs which have to be recovered through their direct operations.
At this point, the Chairman asked that members retire to another room to deliberate on the proposal.
Upon return, a member asked the Group when they thought the 'effective date' mentioned in the Agreement was and also the stage of the implementation of the system.
In response, Dr. Kwabena Appenteng said that in his opinion the effective date of the Agreement meant when the Group had delivered their part of the Agreement which he thought had been done. He said their system was ready to undertake aspects of the clearing process they had been asked to develop. Linking the stage of implementation to interaction with stakeholders, he said it was a two-way issue but was certain that that had advanced. He added that this was a crucial aspect and the progress of it determined the success of the project since the stakeholders played a very important role in the process.
The Commissioner of CEPS in his contribution to the matter said that the involvement of stakeholders was just to test whether the systems being put in place would inure to their benefit and not to determine the success of it.
The Chairman at this stage asked the Commissioner of CEPS if the Valuation Module which is one basis of payment to the Group was ready for use.
In his response, the Commissioner of CEPS said that the Valuation Module was complete and ready for use. He said however that the only thing needed was the aspect of foreign verification and an office to house the CEPS Valuation staff. He added however that on the Foreign Verification aspect, Dr. Kwabena Appenteng had come to his office the previous day with representatives from [Intertek] Government Services to inform them that they had partnered [with] them to undertake the foreign verification of the Valuation Module. He said as a matter of caution, taking the payment issues into consideration, he advised that since [Intertek] Government Services were third parties the Group must inform the Ministry about their new venture."72
"[T]he issue of integration [of the GCS] had been lingering for over a year. He explained that this was indirectly thwarting the efforts of [the] Government to put in place appropriate mechanisms to enhance its revenue collections. He added that the position of the Board was that the problem had been allowed to linger on for much too long and there was the need to find a lasting solution and curtail the delays. A solution was therefore needed to allow systems that had been put in place to be effectively used and maximized. He said the Board had anticipated that integration took place immediately and live operations of the fully integrated system start by September 1, 2008. He said this would give enough time for the system to be tested online before the DICs are phased out. With this background he invited the two companies to outline any reservations they had on the integration process."74
"[F]rom the submissions made by the two companies it was clear that the objectives and importance government puts to its revenue enhancing collections had been understood. He said with the readiness of the two companies to cooperate through integration, the Board must meet the parties as soon as possible and come up with concrete timelines for the integration process. He added that he did not envisage any further delays since the parties had reached a common ground.
[....] He said as pointed out by the representative of RAGB, the introduction of the new system will indeed help to uncover a lot of these fraudulent acts. He mentioned that the introduction of any new venture is bound to be met with resistance especially when it tramples on old but bad habits. He added however that this does not have to serve as a stumbling block to the new system that is to be introduced especially when confirmation had been given that it would serve the right purpose."76
"With regards to funds for the payment of Services provided by Messrs Bankswitch, the Board is proposing that monies that hitherto went to the [DICs] as service charge (1%) paid by importers will now accrue to CEPS upon assumption of the valuation function of the clearing process. Currently, the annual amounts earned by the DICs at an average growth of 30% is around [GH¢]50 million. A portion of this is what will be ceded to Bankswitch. In addition measures put in place anticipate up to 30% increment in revenue over projected revenue for the period."79
"The [GCS] was subjected to a rigorous technical assessment and was found to be:
(i) compliant with WTO Valuation;
(ii) Fast and therefore reduce processing period for valuation and classification;
(iii) Trade documents are electronically submitted to CEPS. All prior approvals of applications currently given manually are automated. These minimizes [sic] to a large extent human contacts, thereby reducing the tendency for rent seeking in Customs clearing;
(iv) Eliminate forged documents and seal off revenue leakages from the clearance system. This is made possible because of the electronic submission of cargo manifests directly into the [GCS] by the carriers and the ability to automatically match individual Bills of lading from importers against manifests;
(v) The system sits on the internet and can therefore be accessed by any individual or entity who/which is registered with [the] system irrespective of location;
(vi) The system has a user-friendly reporting module;
(vii) Document wear and tear is reduced;
(viii) Potentially capable of sharpening the professional skills of officers in valuation and classification;
(ix) Wrong description of goods for purposes of cheating on revenue is eliminated with the introduction of the extended attributes in the system;
(x) Completed Customs Classification and Valuation reports (CCVC) are electronically sent to the importers' front–end screen. This makes the system a complete[ly] paperless one[;]
(xi) Opportunity to doctor information on document[s] is lessened;
(xii) The [GCS] mode of manifest rotation by Customs, removes the opportunity for illegal integration of undocumented/suspicious cargo onto manifests for the evasion of prescribed CEPS controls, and the manipulation of fees/penalties for overstay and demurrage[; and]
(xiii) The [GCS] will resolve the fragmentation of automation in the current system. This will result in less opportunity for manipulation of cargo particulars because information once introduced upstream is automatically supplied wherever/whenever it is required to be provided downstream, without further human intervention."81
"(i) The [GCS] has been tested and found suitable. The good thing about this system is that it is not an imposition on CEPS. Instead this is a system that has been developed largely with inputs from CEPS. It can therefore be adjusted to accommodate any future development in the clearance procedure without any difficulty.
(ii) It is without doubt that judging from the data obtained during the testing of the system, revenue from import duties and taxes could increase significantly."82
"Lastly and most importantly [t]he SIT has enabled CEPS to perform their core function of classification and valuation and build the relevant capacity before the actual GO LIVE date of 1st Jan 2009. On this day CEPS will take over their role of classification and valuation from majority of the Destination and Inspection companies. This exercise has also helped build strong support/working relations between External Price verification entity (Intertek) and CEPS."101
|Range of Declared FOB as % of Assessed FOB||% of Sample||Cumulative % of Sample|
|0%, CORRECT DECLARATION||58.7||58.7|
|> 0% < 25%||8.7||67.4|
|> 25% < 50%||9.4||76.8|
|> 50% < 100%||7.2||84.1|
|> 100% < 300%||13.8||97.8|
6.69.1 This proposition is contested by the Claimant, who argues that the GCS does not (or at least not to a significant extent) duplicate the existing Ghanaian customs infrastructure.113 The Claimant also points out that the statements by Mr Larbi are not supported by minutes or documentation.114
6.69.2 The Ghanaian President accepted the Special Committee's recommendations and directed that the Destination Inspection Scheme should continue, entrusting the Ghanaian Ministry of Trade Industry with the implementation of the directive.115
6.69.3 The Ghanaian Ministry of Trade and Industry invited organisations interested in destination inspection services to apply for the contract and, from there, created a short list of organisations that could submit a proposal. Mr Larbi notes that although Bankswitch responded to the request, it was not short listed.116
6.69.4 The Claimant disputes the President's alleged acceptance of the Special Committee's recommendations and points out the absence of proof to support this allegation.117 There is also contradictory evidence of the Government accepting the claim that GRA, an agency of the Government, published a notice in April 2010 for importers to submit documents to the GCS.118 This implies that the Government accepted that the DICs and the GCS could and should co-exist within the infrastructure then in place.119
6.70.1 CEPS Control: Mr Larbi states that the Bankswitch System does not address the primary vulnerability of the existing customs infrastructure, namely the potential for CEPS officers to perform their function improperly. Bankswitch claims that its system would render the DICs unnecessary and mandate the CEPS to control the system and perform the valuation and classification function on its own, leading to a significant increase in customs revenue.120
6.70.2 Mr Larbi further states that, if the Government phased out the DICs and put CEPS in charge of classification and valuation, there would be a real risk for a significant increase in the improper interference with the processing of consignments through the customs system which would have a negative impact on customs revenues.121
6.70.3 Evidence of Bankswitch's Claims: The Government was concerned with the lack of evidence suggesting that the Bankswitch System had been tested sufficiently to enable the Government to conclude that the Bankswitch System was capable of producing the results claimed.122
6.70.4 The 2009 International Monetary Fund Report on Strategy to Modernize the Ghana Revenue Administration cited 1,316,189 import declarations in 2008.123 However, neither the Inception Report nor the Readiness Report provided by Bankswitch specifies the quantity, if any, of live imports that were processed through the Bankswitch System. It was therefore not established that the Bankswitch System had sufficient capacity and integrity to process the large number of imports required of it had it been put into operation.124 Specifically, the Preliminary Report on the SIT produced by CEPS in November 2008 reported that 185 consignments had been processed during the test period from 23 October 2008 to 7 November 2008,125 while a presentation to the GRA on 21 May 2010 suggested 1,989 imports.126
6.70.5 Role of Intertek: Bankswitch entered into an agreement with Intertek International Ltd ("Intertek International") that placed the latter in charge of the price verification of the goods imported into Ghana.127 Mr Larbi notes that the Government determined that Intertek International's responsibilities would be duplicative of those performed by the DICs.
6.70.6 Mr Larbi further notes that Intertek International is an indirect, wholly owned subsidiary of Intertek Group Plc ("Intertek Group") which had provided preshipment inspection services under the pre-Destination Inspection Scheme system that ended in 2000.128 While the Government had rejected Intertek Group's proposal to be appointed as a DIC, under the Bankswitch System, Intertek Group's subsidiary was set to take on a role similar to that of a DIC.129
6.70.7 Mr Appenteng rejects the implication that the agreement between Bankswitch and Intertek International was done without the involvement of the Ghanaian Government. He maintains that the Government was fully aware of Mr Appenteng's engagement with Intertek and accepted it. He also states that parties from the Government were fully aware of Intertek International's involvement, and no objection was ever raised.130
"The Ghana Customs Excise Preventive Service (CEPS) announces for the information of the public that it is introducing control measures to revalidate the valuation and classification of goods for customs purposes. The exercise is intended to further ensure fairness and equity in the assessment of customs duties and taxes when the FCVR is used.
3. Submission of Trade Documents
As part of these new measures, traders/agents will be required to submit soft copies of their trade documents as follows:
Traders and agents with front end setup (FES) will submit documents electronically through the Ghana Customs Documents Management System (GCSDMS)
Traders and agents without the front end setups (FES) will submit documents electronically through CEPS service centres or online using the URL www.gcsdms.com
Traders/Agents shall be registered in order to have access to the GCSDMS FrontEnd Setups (FES).
6. Deadline for the Submission of Trade Documents
The electronic submission of trade documents through the GCSDMS Front-End setup shall be done at the same time as the trade documents are sent in hard copy to the Destination Inspection Companies for the processing of FCVRs. Traders should note that these trade document are by law required to be submitted NOT LATER than 21 DAYS before the arrival of goods in Ghana.
7. Non Compliance
Submission of trade documents is mandatory and failure to submit them may result in undue delays in the clearance of goods from the port.
8. Submission of Customs Declarations
The FCVR obtained from the DICs will continue to be used for the preparation and submission of all customs declarations.
9. Scope of Application / Start Date
For a start and until further notice, these arrangements shall apply only at the Port of Tema. Submission of trade documents through the front-end setup of the GCSDMS will begin from 1st May 2010.
Traders/agents are advised to ensure that only genuine and correct trade documents are submitted for processing. By so doing, entry and clearance of goods from the ports will be made easy and timely."150
"We refer to the obligation of both parties under the agreement particularly clause 5 (d) of the agreement that stipulates that:
'The Client [MOFEP RAGB] shall issue the necessary administrative and policy instructions to shippers and industry operators to ensure that all shipments are captured within the data base to ensure optimization of revenues.'
And clause 7 (iii) of the agreement stipulates that:
'The consultants shall submit an invoice to the Client [MOFEP/RAGB] within five working days of the end of each month or such other period as may be agreed by the parties. The Client [MOFEP/RAGB] undertakes to make payment to the Consultants within thirty (30) working days of receipt of the invoice.'
We have in recent times been concerned about information reaching us which includes the information that in a presentation delivered to, among others, H.E. The President, the Minister of Finance and the Deputy Minister of Finance, on the 21st May 2010, and to which we had been invited, that the Client [MOFEP/RAGB] had suspended payments to the Consultants.
We have yet to be informed of any breach or subsisting acts of default on our part and so are at loss as to why the Client [MOFEP/RAGB] should unilaterally choose to suspend payment due on our contract. At the same meeting, we also learned that the Client [MOFEP/RAGB] were considering various options which included:
Total buy out of the private partner
Resumption of monthly payments
Long term lease of the software
Short term rental of software while Customs develop its own software
The above mentioned matters, we believe are clear intimation on the part of the Client [MOFEP] to abrogate the contract, which poses a serious threat to our investment under the agreement for the GCSDMS.
We are therefore as a matter of urgency drawing your attention to our present concerns raised for your response and action.
We believe the Client [MOFEP/RAGB] would appreciate our fears and zest to protect our investment which was made in the interest of Ghana."158
(a) find that the Respondent has breached the Agreement;
(b) order the Respondent to pay damages consisting of the loss of profits ("Breach Damages") and certain extra costs which have been incurred in relation to the refurbishment and maintenance of the CEPS Valuation Office ("Extra Costs") up to the date of the final Arbitral Award to the Claimant within fourteen days of the final Arbitral Award;
(c) order the Respondent to pay all costs associated with these proceedings, including all professional fees and disbursements and the fees and expenses of the Tribunal;
(d) award the Claimant interest (being pre-award and post-award interest) from the date of 1 May 2010 (or such other date as the Tribunal deems appropriate), until final payment at the highest Bank Base Rate at the relevant date, per annum, compounded annually; and
(e) order any further relief the Tribunal may consider appropriate.
(a) implement the Bankswitch System;
(b) enable Bankswitch to recoup its investment;
(c) ensure all shipments were captured within the Bankswitch System; and
(d) make payments to Bankswitch, whether pursuant to Clause 7 of the Agreement or otherwise, including in relation to services allegedly provided by Bankswitch that were outside the scope of the Agreement
so that, by not doing so, the Government was in breach of the Agreement
(a) a declaration that the Government has breached the Agreement;
(b) specific performance of the Government's alleged outstanding obligations under the Agreement;
(c) damages; and/or
(d) an order that the Agreement be terminated retroactively.
9.2.1 As the lex arbitrii is Dutch law, Article 154(1) of the Dutch Code of Civil Procedure ("DCCP") applies and states:
"1. A legal acknowledgment by a party of the truth of one or more of the counterparty's statements during the course of proceedings.
2. A legal acknowledgment can only be retracted if it is shown that it was made in error or was not freely made."
9.2.2 The list of situations where a legal acknowledgment may be revoked is exhaustive, and if a listed situation does not exist (and it does not here), then a tribunal must consider such acknowledgment an established fact, and is precluded from investigating – of its own accord or even at the request of the Parties – the truth of such acknowledgment.167
9.2.3 In Sections 1, 33 and 34 of the Respondent's Statement of Defence, the Government expressly acknowledged that the Agreement was valid:
"1. [....] The "Agreement" means the agreement between the Respondent and the Claimant on the Ghana Customs Excise and Preventive Service Secure Document Management System entered into on 12 December 2007, attached as Exhibit C-1 to the Statement of Claim.
33. The Government's primary position on the status of the Agreement is that the Agreement terminated in accordance with clause 10 on, or around, 11 March 2006 (or shortly thereafter) when the Pilot Phase ended without fulfilment of the preconditions necessary for the issuance of the Certificate of Satisfaction. [....]
34. The Government's alternative position is that the five year term of the Agreement will end on 12 December 2012 (being five years from the execution of the Agreement)."168
9.2.4 The above-quoted portion of the Statement of Defence clearly and unconditionally asserts that the Agreement was entered into and specifies that the Government's position on the status of the Agreement was that the Agreement was effective and legally binding from the start until either 11 March 2008 or 12 December 2012.169 Further statements from the Respondent only refer to whether the Agreement was breached or whether it should be terminated.170 No statements were made until the Counter Memorial that there was any issue of the validity of the Agreement.
9.2.5 Further, from the date the Agreement was entered into (i.e., 12 December 2007) onwards, the Government has acted as if the Agreement was valid and legally binding, making an explicit declaration to that effect in a 28 September 2010 letter from the Attorney General and Minister for Justice, Betty Mould Iddrisu, which stated "[h]aving carefully examined the above mentioned Agreement I am of the opinion that there is a valid / legally binding contract between the parties."171
9.2.6 Based on the above facts, which show that the Government has no grounds to revoke the legal acknowledgement of the Agreement, the Tribunal must consider the validity of the Agreement to be an established fact, thereby rendering the question of the validity of the Agreement under Ghanaian law irrelevant.172
9.3.1 Article 19(2) of the UNCITRAL Rules 1976 states:
"The statement of defence shall reply to the particulars (b) [statement of facts supporting the claim], (c) [points at issue] and (d) [relief or remedy sought] of the statement of claim."
9.3.2 With regard to the UNCITRAL Rules 2010, Webster notes that "the Respondent should add all issues that the Respondent believes should be dealt with in the Award".173 Because Article 19(2) of the UNCITRAL Rules 1976 is identical to Article 21(2) of the UNCITRAL Rules 2010, the statement regarding the latter also applies to the former.
9.3.3 Article 20 of the UNCITRAL Rules 1976 specifically lays out the rule for supplementing a claim or defence:
"During the course of the arbitral proceedings either party may amend or supplement his claim or defence unless the arbitral tribunal considers it inappropriate to allow such amendment having regard to the delay in making it or prejudice to the other party or any other circumstances. However, a claim may not be amended in such a manner that the amended claim falls outside the scope of the arbitration clause or separate arbitration agreement."
9.3.4 The Respondent is thus prevented from amending or supplementing its defence if there is an inordinate delay in making the amendment or supplement or if such delay will prejudice the other party.174 In his textbook, Mr Born has added that the tribunal may disallow the amendment based on any other circumstances that would make an amendment inappropriate.175
9.3.5 In Mohsen Asgari Nazari v The Government of the Islamic Republic of Iran, the tribunal refused to allow the claimant to amend its claim based on the significant lapse of time preceding the amendment, and noted that "the Claimant had not offered any justification for his delay in making his application".176 Further, when a party has repeatedly disobeyed orders setting deadlines and delayed the proceedings, tribunals should be even more reluctant to accept new defences in submissions:
"Repeated non-compliance with deadlines and last-minute amendments to pleadings or evidence can compromise the efficacy and integrity of the arbitral process. It is sometimes difficult for arbitrators, who lack the coercive authority of a national court, to prevent such conduct, but making determined efforts to do so is an essential part of the tribunal's mandate to conduct an efficient and fair proceeding."177
9.3.6 The Respondent has repeatedly disregarded procedural deadlines, constantly placing the Claimant in a difficult position, and the Claimant would be prejudiced if the Respondent were allowed to amend its Statement of Defence.
9.3.7 Further, as discussed at Paragraphs 9.2.3 to 9.2.6 above, the Respondent has continuously treated the Agreement as a valid and enforceable contract, and nowhere in the Statement of Defence or Counter Memorial has the Respondent refuted the explicit statements of validity.178
9.3.8 It took the Respondent five years after the Agreement was signed to dispute the validity of the Agreement for the first time. All of the facts and circumstances allegedly showing the invalidity of the Agreement – on which the Respondent has relied in its Counter Memorial (e.g., the 1992 Ghanaian Constitution) – have existed and have been expressly known by the Government not only when it submitted its Statement of Defence but also well before the Agreement or First MOU had been signed.179
9.3.9 Furthermore, to allow this change in position would disrupt the efficacy of the proceedings as the Respondent has not elaborated on its argument on the validity of the Agreement in its Counter Memorial, providing the Claimant no information on the Respondent's position on the consequences of the Agreement being void and of no effect.180 It is undisputed that the Claimant has performed many tasks under the Agreement, cooperating closely with many branches of the Government (e.g., CEPS, RAGB, and PIT).181
9.4.1 Article 181(5) of the Ghanaian Constitution provides that parliamentary approval is required for "international business transactions" to which Ghana is a party.
9.4.2 The Claimant relies on the decision of the Supreme Court of Ghana in Attorney General v Balkan Energy Ghana Ltd, which establishes that an Agreement with foreign elements will only be considered an international business or economic transaction within the meaning of Article 181(5) in exceptional circumstances:
"Given the complexity of contemporary international business transactions, there will be transactions of such a clear international nature that they should come within any reasonable definition of an international business transaction...."182 (emphasis provided by the Claimant)
9.4.3 Balkan Energy further establishes that Art 181(5) in no way covers all agreements that have a foreign element:
"We think that a business transaction is "international" within the context of article 181(5) where the nature of the business which is the subject-matter of the transaction is international in the sense of having a significant foreign element or the parties to the transaction (other than the Government) have a foreign nationality or reside in different countries, or in the case of companies, the place of their central management and control is outside Ghana."183 (emphasis provided by the Claimant)
9.4.4 The Claimant contends that the current transaction is not an "international business transaction" for two reasons. First, the current transaction can be distinguished from that at issue in Balkan Energy. Second, the Respondent's arguments cannot support a finding that the Agreement constitutes an international business or economic transaction under Article 181(5) of the Ghanaian Constitution.
9.4.5 The Claimant first submits that the facts of this case can be distinguished from Balkan Energy.
9.4.6 First, the Agreement was negotiated by Mr Appenteng, a Ghanaian national and resident. All of Bankswitch's correspondence with the Government – written, oral, or otherwise – was conducted through Mr Appenteng who also signed the Agreement on behalf of Bankswitch. The MOU was signed by Mr James Osei-Poku on behalf of Bankswitch and GETGroup. Mr Osei-Poku was also a Ghanaian citizen at the relevant time.184
9.4.7 Second, Bankswitch is not a wholly owned foreign entity. At the relevant time, 40% of the shares in Bankswitch were indirectly held by Ghanaian nationals residing in Ghana.185
9.4.8 Third, Bankswitch's management was Ghanaian. Mr Appenteng, who has been the Managing Director of Bankswitch since 2006, is a Ghanaian national and resident. Additionally, five out of six members of the management team responsible for the day-to-day operations of Bankswitch are Ghanaian.186
9.4.9 Fourth, as opposed to Balkan Energy, the Agreement does not contain a clause obliging the Parties to finally resolve their dispute by means of international commercial arbitration. Clause 19 of the Agreement (Settlement of Disputes) provides for conciliation in the first instance, and if the dispute cannot be resolved, then arbitration under the UNCITRAL Rules:
"The parties shall endeavour to settle any and all disputes, differences, or disagreements under this contract through conciliation in the first instance. In the event that the parties cannot settle such disputes or differences, the aggrieved party may refer that matter for arbitration under the UNCITRAL rules."
9.4.10 The clause thus does not necessarily refer to international commercial arbitration, as it does not stipulate whether arbitration is to take place inside or outside of Ghana.
9.4.11 Fifth, the Agreement does not contain a clause stipulating the Government's waiver of sovereign immunity while the agreement in Balkan Energy included a waiver of sovereignty immunity as follows:
"24. To the extent that [Government of Ghana] may in any jurisdiction claim for itself or its assets or revenues immunity from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other process and to the extent that any such jurisdiction there may be attributed to the [Government of Ghana] or its assets or revenue such immunity [the Government of Ghana] agrees not to claim and irrevocably waives such immunity to the full extent permitted by the laws of such jurisdiction."
9.4.12 Sixth, the Agreement does not contain a clause stipulating that no taxes or foreign exchange controls would impede the execution of the Agreement. In Balkan Energy, in contrast, the tax and foreign controls clause stated:
"29.2 [The Government of Ghana] represents and warrants that:
(g) No Taxes. There is no Tax other than stamp duty at a nominal rate imposed on or in connection with:
(A) the execution, delivery or performance of this Agreement;
(B) the enforcement of any of this Agreement; or
(C) on any payment to be made to the [Balkan Energy] under this Agreement. In connection with Letters of Credit, no Government Authority shall impose any reserve, special deposit, deposit insurance or assessment affecting [Balkan Energy].
No Foreign Exchange Controls : There are no foreign exchange or other restrictions in effect in the Republic of Ghana adversely affecting the ability or right of [the Government of Ghana] to acquire and to remit to [Balkan Energy] foreign currency to pay and satisfy [the Government of Ghana]'s obligations under this agreement."187
9.4.13 As the factual matrix of this dispute can be sufficiently distinguished from that of Balkan Energy, the Claimant contends that the Agreement does not constitute an "international business or economic transaction" within the meaning of Article 181(5) of the Ghanaian Constitution.
9.4.14 The Claimant further asserts that the Respondent's arguments that the Agreement constitutes an international business or economic transaction are flawed.
9.4.15 While the Respondent notes that the Claimant's shareholders are domiciled in Switzerland, Bankswitch was incorporated in Ghana and registered in the Ghanaian Registry of Companies,188 with 40% of Bankswitch's shares being held by residents of Ghana with Ghanaian nationality.189
9.4.16 While the Respondent notes that the GETGroup operates from premises in Dubai, the Claimant asserts that it explicitly chose its domicile to be at Bankswitch's offices in order to have a presence in Ghana.190
9.4.17 While the Respondent notes that fundamental obligations of Bankswitch and the GETGroup were subcontracted to GET Holdings, the Claimant argues that the Supreme Court in Balkan Energy made no reference whatsoever to the possible role of the contractual involvement of a third party in the determination of whether an agreement is considered an "international business or economic transaction" within the meaning of Article 181(5).
9.4.18 The Claimant further submits that the Government had "insisted on the cosigning of the Agreement by the GETGroup, as they wanted to ensure that the entity who owned the software had its name on the contract so that they could be held accountable in case of any failures".191
9.4.19 GET Holdings, though based in Cyprus, performed its services predominantly in Ghana. It conducted "review and analysis of business processes, involving lengthy interviews with various user groups to determine their specific roles in the current customs system".192
9.4.20 While the Respondent notes that GET Holdings and the Dubai-based GETGroup FZE were entitled to 16% of the total fees received by Bankswitch, the Claimant reiterates that the contractual involvement of third parties should not be considered in the determination of whether an agreement is an "international business or economic transaction" as this factor was not referred to in Balkan Energy. Nonetheless, this 16% payment represents payment for the contractually agreed services. It is difficult to reconcile a 16% payment with the requirement that a foreign element be "significant" under Balkan Energy.193
9.4.21 While the Respondent notes that Bankswitch engaged UK-based Intertek International Ltd, the Claimant reiterates that the Balkan Energy decision did not hold that the participation of a foreign third party would result in the transaction becoming an "international business or economic transaction" under Article 181(5) of the Ghanaian Constitution. The Claimant further notes that Intertek was engaged to provide price verification services for the benefit of the GCS.194 Neither MOFEP nor any other body of the Government protested against this engagement.195
9.4.22 The price verification service handled by Intertek International was not part of Bankswitch's contractual obligations under the Agreement at the time of signing. It was not foreseeable at the time of signing the Agreement that Bankswitch would agree to provide price verification services, let alone engage Intertek International. Accordingly, the engagement of Intertek International cannot affect the determination of whether the Agreement falls under the purview of Article 181(5). Also, Intertek International's price verification role falls short of the "significant" foreign element requirement stipulated in Balkan Energy.
9.4.23 While the Respondent notes that Bankswitch engaged Panama-based Faberkner Corp, the Claimant reiterates that the Balkan Energy decision did not hold that the participation of a foreign third party would result in the transaction becoming an "international business or economic transaction" under Article 181(5) of the Constitution. The Claimant nevertheless submits that Faberkner provided services related to Bankswitch's day-to-day operations and not specifically to its obligations under the Agreement. Therefore, the agreement with Faberkner is irrelevant to the validity of the Agreement. The involvement of Faberkner also in no way meets the requirement set out by the Supreme Court in Balkan Energy that the foreign element must be "significant".
9.4.24 Because the Respondent's argument cannot lead to the conclusion that the Agreement constitutes an international business or economic transaction, the Agreement is thus valid and legally binding.
9.5.1 The doctrine of estoppel precludes a party from asserting or proving facts that are contrary to its own representations and that have induced the other party to act to its detriment. Arguing that it can prove the conditions of representation, reliance, inequitablility, and detriment, the Claimant asserts that the Respondent is estopped from relying on Article 181(5) of the Constitution to argue that the Agreement is void and of no effect. The Respondent represented to the Claimant that the Agreement was valid and legally binding through the following:
9.5.2 Throughout the six years of the contractual relationship between the Parties, at no time did the Respondent indicate that the Agreement was invalid or not legally binding on the Government.196
9.5.3 The Respondent, acting through MOFEP and RAGB, signed the First MOU on 21 December 2006.197 Following the successful deployment test of the GCS, the Respondent signed the Agreement on 12 December 2007,198 and special commissions were created and special commissioners appointed in relation to the GCS.199 Numerous meetings were convened by the Government and attended by all Parties to evaluate the progress of the development of the GCS software.200
9.5.4 Additionally, monthly down payments were made by the Respondent to the Claimant in the amount of GH¢ 600,000 each, pursuant to a series of release letters.201 The Respondent further approved, but has not to date paid, the release of GH¢ 3,000,000.00 to the Claimant.202
9.5.5 The Respondent also issued multiple public notices,203 informing the public and stakeholders about the GCS and inviting all stakeholders to use and test the system.204 Public announcements that the GCS would "go live" on 27 and 29 April 2010 were also made in two national newspapers.205
9.5.6 Further, the Respondent explicitly confirmed that the Agreement was valid and legally binding in an exchange of letters with MOFEP. In the letter dated 28 September 2011, Ghana's Attorney-General and Minister of Justice wrote that "[h]aving carefully examined the above mentioned Agreement, I am of the opinion that there is a valid legally binding contract between the parties."206
9.5.7 The Claimant argues that the facts also meet the element of reliance.
9.5.8 First, the Claimant relied on representations of the Respondent that (i) the Agreement was legally binding and (ii) the Claimant had carried out its obligations under the MOU and the Agreement.
9.5.9 Second, the Claimant bought, developed and installed hardware and software,207 developing electronic solutions and a portal platform for the Respondent.208 The Claimant further provided training and know-how to the Respondent's staff.209 In completing the Pilot Phase,210 the Claimant made every possible effort to finally implement the GCS.
9.5.10 Third, beyond its contractual obligations, the Claimant also made additional investments and exerted every effort necessary to have the GCS ready for implementation.211
9.5.11 Fourth, the Claimant's reliance was legitimate and based on representations made by the Respondent, including those made by the Government, its ministries, its Attorney-General, and other special commissioners and committee members appointed by the Government.212 Not once did the Respondent, or any of its representatives, question the Agreement's validity until the commencement of this arbitration.213
9.5.12 Based on the above, it would be inequitable for the Respondent to assert the invalidity of the Agreement, given that the Claimant had entered into the Agreement in reliance on the representations of the Respondent and its representatives. The Claimant has performed acts that cannot be undone, and cannot be restored to the position it would have been in had it not relied on the validity of the Agreement.214
9.5.13 The Claimant also submits that the element of detriment is not necessary to prove estoppel in this case because this requirement has only been imposed for the specific case of estoppel by representation, where the promisee has done something he was previously not bound to do.215 In other kinds of estoppel, evidence of reliance suffices.216
9.5.14 Should the Tribunal hold, however, that the element of detriment is required, there can be no doubt that the behaviour of the Respondent was (and still is) detrimental towards Bankswitch considering the damage that has been suffered.217
9.5.15 Accordingly, the Claimant submits that, since the elements of estoppel have been met in this case, the Government is estopped from arguing, based on Article 181(5) of the Ghanaian Constitution, that the Agreement is void and of no effect.
9.6.1 A breach of contract occurs when a party fails or refuses to perform its obligations under the contract,218 and liability for such non-performance of contractual duties is strict and independent of fault unless the provisions of the specific contract provide otherwise.219
9.6.2 The Claimant submits that the Respondent has breached its obligations under (i) Clause 5 (Obligations of the Client) (discussed in Paragraph 9.9 below); (ii) Clause 7 (Fees and Terms of Payment) (discussed in Paragraph 9.8 below); and (iii) Clause 9 (Pilot Phase) (as discussed below in Paragraph 9.7 below).
9.7.1 Under Clause 9 of the Agreement (quoted in Paragraph 6.6 above), the Claimant satisfied its obligations by submitting (i) an Inception Report explaining the status of the GCS220 and (ii) a project brief outlining the Project to date.221
9.7.2 Clause 9(iii) of the Agreement stated that "[t]he basis for issuance of the Certificate of Satisfaction shall be the demonstrated potential of the deployed systems to increase the revenues exponentially by a factor satisfactory to the Client."
9.7.3 The Government, through various officials from MOFEP, RAGB and CEPS, made statements at two separate meetings that it was satisfied with the demonstrated performance of the GCS.222 The condition for the issuance of the Certificate of Satisfaction as set out in Clause 9(iii) had therefore been met. At the PIT Committee Meeting on 18 March 2008, several statements were made which indicated the Respondent's satisfaction with the "demonstrated potential" of the GCS (discussed at Paragraph 6.40 above).223
9.7.4 Additionally, the SIT (discussed in detail at Paragraph 6.62 above) was successful, and demonstrated the revenue potential of the GCS. The Preliminary Report on SIT, submitted in conjunction with CEPS,224 demonstrated the GCS's potential to increase revenue, including, inter alia, (i) a statement that the GCS has a 100% submission rate;225 (ii) a recommended public notice for all clearing agents to submit trade documents to GCS;226 (iii) a recommendation that carriers use the GCS to provide missing information from their bills of lading;227 (iv) a recommendation for the issuance of a public notice for all clearing agents indicating the optimal connectivity options for better overall benefits of using the GCS;228 (v) an explanation of only minor improvements in the process needed to make the GCS fully ready for implementation;229 and (vi) a conclusion that the SIT was "successful in all respects."230
9.7.5 On 5 March 2009, Bankswitch sent a letter to MOFEP, further explaining the successes of the GCS as evidenced by the October-November 2008 SIT.231 In the letter, Bankswitch explained that there was a significant capability of the GCS to capture potential losses in revenue that were not being captured under the current customs system, "namely the significant under-declarations of FOB [Freight on Board] values by importers."232 Specifically, the results of the SIT showed that 41.3% of consignments submitted were under-declared and of those underdeclarations, 15.9% were under-declared by more than 100% as compared to the figures obtained through the GCS.233 Thus, by implementing the GCS, CEPS could effect significant increases in revenue by preventing such rampant underdeclaration.
9.7.6 Further, on 27 and 29 April 2010, the Government issued two public notices in the Ghanaian Times and Daily Graphic respectively, stipulating that submission of trade documents through the GCS would begin on 1 May 2010.234 These notices clearly indicated the Government's willingness to "go live" with the GCS, and therefore evidenced their satisfaction with the GCS's revenue potential under Clause 9(iii) of the Agreement.
9.7.7 The Claimant requested that the Respondent consider issuing the Certificate of Satisfaction on several occasions, beginning with a letter dated 19 February 2008.235 Since that date, the Government has failed to issue the Certificate of Satisfaction, and further, has never informed Bankswitch of any reason for its failure to do so.
9.7.8 Based on the foregoing, the Claimant submits that the Respondent is in breach of its contractual obligations under Clause 9 of the Agreement.
9.8.1 Under Clause 7 of the Agreement, the Claimant was to "prefinance the procurement of all required hardware and related equipment" and then recoup such investments after the implementation of the GCS through the Service Fee provided for in Clause 7(iii) of the Agreement. The Service Fee represents the Respondent's consideration for the Claimant's services.
9.8.2 Owing to the structure of the Agreement, the Claimant's compensation was based solely on a percentage (2/3 of 0.7%) of the final invoice of the FOB value of all import transactions passing through the GCS. Therefore, without a set price for the Claimant's services, the Claimant would only be compensated once import transactions began passing through the GCS, which in turn would happen only after the commencement of the Implementation Phase was triggered by the issuance of the Certificate of Satisfaction under Clause 9 of the Agreement.
9.8.3 Despite the successful completion of the Pilot Phase, the Respondent failed to issue the Certificate of Satisfaction (discussed in Paragraph 9.7 above), the prerequisite to triggering the start of the Implementation Phase and the corresponding calculation of the Service Fee.
9.8.4 By failing to comply with the Agreement, as stated above, the Respondent is in breach of its obligations and has consequently prevented and is preventing the Claimant from recouping its investments.
9.9.1 Clause 5(d) of the Agreement obliged the Respondent to "issue the necessary administrative and policy instructions to shippers and industry operators to ensure that all shipments are captured within the database to ensure optimization of revenues."
9.9.2 Although the Respondent did issue public notices informing the stakeholders about the GCS and instructing them to submit trade documents through the system,236 those obligations were never enforced and the stakeholders continued to proceed under the previous customs regime.237 No shipments have been captured under the GCS.238
9.9.3 By failing to enforce the public notices, the Respondent failed to abide by its obligations under Clause 5(d) of the Agreement.
9.11.1 Article 181 of the Ghanaian Constitution provides:
"1. Parliament may, by a resolution supported by the votes of a majority of all members of Parliament, authorise the Government to enter into an agreement for the granting of a loan out of any public fund or public account.
2. An agreement entered into under clause (1) of this article shall be laid before Parliament and shall not come into operation unless it is approved by a resolution of Parliament.
3. No loan shall be raised by the Government on behalf of itself or any other public institution or authority otherwise than by or under the authority of an Act of Parliament.
4. An Act of Parliament enacted in accordance with clause (3) of this article shall provide:
(a) that the terms and conditions of a loan shall be laid before Parliament and shall not come into operation unless they have been approved by a resolution of Parliament; and
(b) that any moneys received in respect of that loan shall be paid into the Consolidated Fund and form part of that Fund or into some other public fund of Ghana either existing or created for the purposes of the loan.
5. This Article shall, with the necessary modifications by Parliament, apply to an international business or economic transaction to which the Government is a party as it applies to a loan."
9.11.2 The Ghanaian Supreme Court in Balkan Energy enumerated criteria for determining what transactions come under Article 181(5) as being "international business or economic transactions".
9.11.3 "International" : The Balkan Energy court held that Article 181(5) of the Ghanaian Constitution should be construed purposively, to mandate the consideration of more than the mere nationality of the parties to an agreement and the assessment of the nature of the transaction and the parties involved:
"The phrase 'international business or economic transaction to which the Government is a party', if purposively construed, should not lead necessarily to the result that only agreements between entities resident abroad and the Ghana Government can be embraced within the meaning of the term. Given the complexity of contemporary international business transactions, there will be transactions of such a clear international nature that they come within any reasonable definition of an international business transaction, but which may have been concluded with [the] Ghana Government by an entity resident in Ghana."239
9.11.4 The Respondent focuses on the following factors in establishing that the Agreement is "international" under the meaning of Article 181(5) of the Ghanaian Constitution:
(i) Bankswitch's shareholders are domiciled in Switzerland.240
(ii) GETGroup operates from premises in Dubai (evidenced by the fact that significant elements of the GCS are hosted at its premises in Dubai and requests for technical assistance in relation to the GCS were directed to Dubai).241
(iii) Under the Technical Consultant Agreement, certain fundamental obligations of Bankswitch and GETGroup were subcontracted to GET Holdings, a company incorporated under the laws of Cyprus with its registered address in Nicosia, Cyprus. GET Holdings was responsible for (i) business process review and analysis; (ii) system design configuration and recommendations; and (iii) strategic planning advisory services.242
(iv) The Claimant's claims in this Arbitration include a claim for the fees payable to GET Holdings under the Technical Consultant Agreement (16% of the total fees received by Bankswitch from MOFEP/RAGB).243
(v) Invoices submitted to MOFEP for payment of fees allegedly owed under the Agreement have been submitted on behalf of both Bankswitch and GETGroup FZE, a Dubai company (according to its website).244
(vi) Bankswitch engaged Intertek International, a company incorporated under the laws of England and Wales, with a registered office in London, to provide price verification services. The Claimant's claims include amounts for the fees paid to Intertek International.245
(vii) Bankswitch engaged Faberkener Corp, a company incorporated under the laws of Panama, for the provision of management services to Bankswitch. Bankswitch's claims include a claim for the fees payable to Faberkener Corp.246
(viii) The Agreement contains an international arbitration agreement.247
9.11.5 "Business Transaction" : In Balkan Energy, the Supreme Court held that a transaction will be deemed a "business transaction" where (i) it is commercial in nature or (ii) impacts on the wealth and resources of Ghana.248 The transaction contemplated by the Agreement envisaged the development of a sophisticated IT system in consideration for significant fees, which form the basis of Bankswitch's claim for some GH¢ 853,779,000.249 The nature of the Agreement and the amounts claimed under it demonstrate that the transaction potentially impacts on the wealth and resources of Ghana.250
9.11.6 "Major" : In Balkan Energy, the Supreme Court clarified that Article 181(5) of the Ghanaian Constitution only applies to "major" transactions. Given the value of the fees claimed by Bankswitch, the Respondent believes that the Agreement clearly contemplates a "major" transaction. Based on the above, by classifying the Agreement as contemplating an "international business or economic transaction", and pursuant to Articles 181(1) and (2) of the Ghanaian Constitution, the Agreement could not come into operation unless and until it was approved by a resolution supported by the affirmative votes of a majority of all the Members of Parliament.251 As no such resolution was ever passed, it could not have come into operation, and is thus void and of no effect.252
9.12.1 Clause 9 of the Agreement (reproduced at Paragraph 6.6 above) provides for the issuance of the Certificate of Satisfaction, with Clause 9(iii) conditioning its issuance on "the demonstrated potential of the deployed systems to increase revenues exponentially by a factor satisfactory to the [Government]." Based on the language of the Agreement, the decision of whether or not to issue a Certificate of Satisfaction is a matter exclusively for the Government's subjective judgment as there are no objective criteria specified in the Agreement according to which the Government's decision not to issue such certificate can be judged.253 Further, MOFEP and RAGB, as the Government parties, were designated in Clause 9(ii) as the parties with the power to make the decision of whether to issue the Certificate of Satisfaction.
9.12.2 Although the Claimant argues that statements made by certain members of CEPS evidence the satisfactory revenue potential of the GCS (see Paragraph 9.7 above), the views expressed by CEPS representatives are not relevant to a determination of whether the precondition in Clause 9(iii) of the Agreement was met, as the power to issue the Certificate of Satisfaction was granted exclusively to MOFEP and RAGB. Accordingly, the statements cited by the Claimant above are not relevant to a determination of the issuance of the Certificate of Satisfaction and should be disregarded.
9.13.1 Pursuant to Clauses 7(i), 7(ii) and 9(i) of the Agreement, the Claimant agreed to develop the GCS using its "own resources" to "prefinance the procurement of all required hardware and related equipment" and to develop the GCS "at cost".254
9.13.2 The Claimant accepted the risk that it would ultimately bear the cost of any works it carried out in seeking to obtain the issuance of the Certificate of Satisfaction if it was unable to meet the preconditions in Clause 9(ii) of the Agreement. Moreover, the Respondent is not obliged to make any payment prior to the issuance of the Certificate of Satisfaction, whether as a contribution towards the Claimant's costs or otherwise.255
9.15.1 Owing to the fact that the remainder of the Respondent's obligations under the Agreement were conditioned on the issuance of the Certificate of Satisfaction, the Respondent cannot be held in breach of Clauses 5 or 7 (as discussed at Paragraphs 9.8 to 9.9 above).
9.15.2 Clause 7: Under Clause 7 of the Agreement, the Claimant was responsible for pre-financing the development of the GCS and, in consideration of its services, would receive "the equivalent of 2/3 of 0.7% of the final invoice FOB value of all import transactions which pass through the [GCS]." The Respondent's payment obligation under the terms of the Agreement is only applicable following the issuance of the Certificate of Satisfaction and the implementation of the GCS. As the Certificate of Satisfaction was not issued and the GCS not implemented, the Respondent has no obligation to make the payment under Clause 7(iii) or any other payment for that matter.256
9.15.3 Clause 5 : Under Clause 5(d) of the Agreement, the Respondent was responsible for ensuring that any shipments being imported into Ghana were recorded in the GCS "to ensure optimization of revenues". The Respondent was not obliged to ensure that any shipments were recorded in the GCS until the precondition in Clause 9(iii) was satisfied, the Certificate of Satisfaction was issued, and the GCS was implemented.257 Therefore, by failing to satisfy the precondition of Clause 9(iii), the subsequent obligations have not become binding on the Respondent, who cannot be held in breach of the relevant provisions of the Agreement.
9.16.1 If, assuming arguendo, the Respondent breached the Agreement on 1 May 2010 (or another date) as alleged by the Claimant, then the Claimant failed to exercise its right to terminate the Agreement under Clause 20 of the Agreement and thereby waived this right by its continued performance of the Agreement. Accordingly, the Tribunal cannot grant the remedy of retroactively terminating the Agreement.258
9.16.2 Equally, if the Tribunal finds that the Respondent repudiated the Agreement on 1 May 2010, then the Claimant did not accept the repudiation and instead elected to affirm the Agreement by its subsequent actions and current claim for specific performance.259
9.16.3 The Claimant's election to continue its performance of the Agreement was an affirmation of the Agreement and a question of fact; thus the Tribunal cannot retroactively alter this fact or retroactively terminate the Agreement.260
"Contractual damages are usually awarded in relation to the injured party's expectation loss – the loss of what he would have received had the contract been performed.... This means that damages cover the profit which the injured party would have derived from the contractual performance."263
"According to the generally held view, the object of damages is to place the party to whom they are awarded in the same pecuniary position that they would have been in if the contract had been performed in the manner provided for by the parties at the time of its conclusion.... This rule is simply a direct deduction from the principle of pacta sunt servanda, since its only effect is to substitute a pecuniary obligation for the obligation which was promised but not performed. It is therefore natural that the creditor should thereby be given full compensation. This compensation includes loss suffered (damnum emergens), for example expenses incurred in performing the contract, and the profit lost (lucrum cessans), for example the net profit which the contract would have produced. The award of compensation for the lost profit or the loss of a possible benefit has been frequently allowed by international arbitral tribunals."265
10.7.1 Damages can be claimed as of right by a party adversely affected by a breach of contract;266 thus, every breach of contract gives rise to a claim for damages.267 A claim for damages in relation to a breach of contract is a claim for monetary compensation for the fact that a claimant has not received the performance for which it bargained.268
10.7.2 The damages to be compensated include the loss sustained as well as the profits lost as a result of the breaching party's actions, so that its expectations arising from or created by the contract are protected.269
10.7.3 Contractual damages seek to put the third party in the position in which it would have been had the contract been performed satisfactorily.270 In Robinson v Harman,271 the court stated:
"The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed."272
10.7.4 This principle has been confirmed by a recent Ghanaian Supreme Court decision in Juxon-Smith v KLM Dutch Airlines in which it states:
"Where a party has sustained a loss by reason of breach of contract, he was, so far as money could do it, to be placed in the same situation with respect to damages, as if the contract had been performed."273
10.8.1 A foundational rule of damages is that a loss will not be recoverable if it is found to be too remote. In the oft cited English case of Hadley v Baxendale, the general rule of remoteness is characterised as follows:
"Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated. But, on the other hand, if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances, from such a breach of contract. For such loss would neither have flowed naturally from the breach of this contract in the great multitude of such cases occurring under ordinary circumstances, nor were the special circumstances, which, perhaps, would have made it a reasonable and natural consequence of such breach of contract, communicated to or known by the defendants."274
10.8.2 Thus, there are two classifications of recoverable damages – (i) those arising naturally from the breach and (ii) those reasonably contemplated by both parties when they made the contract as being a probable result of its breach.275 Under the second classification, it is necessary that the parties foresaw the type of damages, but whether they foresaw the extent of damages or the precise manner of its occurrence is irrelevant.276
10.8.3 Loss of Profits: The Claimant's loss of profits that are caused by the Respondent's breach is recoverable because it falls into the first classification of those damages arising naturally out of the contract. Clause 7(iii) of the Agreement clearly stipulates that the Claimant will receive a Service Fee in consideration of the services provided. However, owing to the Respondent's breach, the Claimant has not earned its Service Fee. Thus, the loss of profits is a normal consequence of the breach since Clause 7(iii) of the Agreement explicitly provides that payment relates to the implementation of the GCS.277
10.9.1 If the Tribunal finds that the loss of profits and/or incidental costs did not arise naturally out of the breach, these losses should still be recoverable as they were reasonably contemplated by the Parties at the time of the breach pursuant to the terms of Clauses 5 and 7 of the Agreement.
10.9.2 Loss of Profits: At the time of signing the Agreement, the Respondent knew, or reasonably should have known, by virtue of the terms of Clause 7(iii), that the Claimant would not earn its Service Fee, and would subsequently suffer lost profits if the Respondent failed to implement the GCS in a timely fashion, as per Clause 5(d) of the Agreement.
10.9.3 Incidental Costs: At the time of signing the Agreement, the Respondent knew, or reasonably should have known, by reason of the terms of Clauses 7(i) and 7(ii) of the Agreement, that the Claimant would be responsible for keeping the GCS system and facilities ready for implementation if the Respondent failed to implement the GCS timeously, as per Clause 5(d) of the Agreement.
"A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than in the statement of defence or, with respect to a counter-claim, in the reply to the counter-claim."
"[A] defence of jurisdiction is deemed to be waived if not raised in time. This concept derives from the assumption that defences on jurisdiction can be waived by the Parties, with the consequence that a Tribunal is not able to set aside or disregard a Party's waiver in respect to the defence of lack of jurisdiction."281
"If a witness whose appearance has been requested pursuant to Article 8.1 fails without a valid reason to appear for testimony at an Evidentiary Hearing, the Arbitral Tribunal shall disregard any Witness Statement related to that Evidentiary Hearing by that witness unless, in exceptional circumstances, the Arbitral Tribunal decides otherwise."
11.10.1 On 4 January 2013, the Claimant provided the Respondent (through the Chief Director of MOFEP, Commissioner-General of GRA and Director Legal of MOFEP) with a copy of the draft Award on Agreed Terms. On 8 January 2013, Mr Appenteng discussed the draft at length in a meeting chaired by the SolicitorGeneral and attended by three attorneys from the Attorney-General's Office, the Director Legal of MOFEP, the Commissioner-General of GRA, a Customs officer, and Ms Nania Owusua-Ankomah of Bentsi-Enchill, Letsa & Ankomah, the Claimant's Ghanaian Counsel.286
11.10.2 On 10 January 2013, Messrs Appenteng and Darko of Bankswitch met with the GhanaianVice-President to discuss the draft of the Award on Agreed Terms, and the Claimant sent follow-up correspondence on the morning of 11 January 2013 that included the revised text of the draft based on the conversation.287 The email notes that "the changes were agreed with a senior government official at the meeting last evening, except for the increase of the repayment term and the increase in instalments in clause 4.3".288
11.10.3 In the afternoon of 11 January 2013, Professor Koppenol-Laforce spoke to Ms Gaise, the Solicitor-General, and an agreement was reached on the (i) the terms of the Award on Agreed Terms and (ii) the percentage of the Service Fee. The only outstanding issue was the amount of damages in case of the Respondent's non-performance, on which Ms Gaise was to send a proposal once she had completed internal discussions.289 The Respondent informed the Claimant that, owing to its inability to speak to officials from MOFEP, the Claimant should "use the percentage that would give a figure of 500-600 [million Cedis,] whichever is preferable to your client".290 The only request from the Respondent relating to damages was that the Claimant state the amount in the Award on Agreed Terms using words and not numbers.291
11.10.4 After discussing the matter with the Claimant, Professor Koppenol-Laforce responded on 12 January 2013 with a revised draft of the Award on Agreed Terms that provided GH¢ 599,000,000 (written in words only) plus applicable taxes as the "Compensation Amount" in Clause 5.1.292 Additionally, the Claimant requested that the Respondent initial the Award on Agreed Terms that day which would then be sent to the Tribunal for its consideration.
11.10.5 On 12 January 2013, the Respondent asked for two further changes, namely (i) a more open clause for the Respondent's bank account information and (ii) the insertion of the names of the persons who would sign the Award on Agreed Terms (i.e., Solicitor-General, Chief Director of MOFEP and the CommissionerGeneral of GRA).293 These changes were incorporated into the Award on Agreed Terms and the document was again circulated to the Respondent.294 The Claimant again requested the Respondent to sign the Award on Agreed Terms as soon as possible so that it could be sent to the Tribunal for comment and signature.295
11.10.6 Mr Appenteng spoke to Ms Gaise on the telephone after the revised draft had been sent out on 12 January 2013, and Ms Gaise indicated that the Award on Agreed Terms would be signed on Monday, 14 January 2013. No reservations were made by Ms Gaise as the language of the Award had been completely agreed and as the Claimant had sent the Award on Agreed Terms to the Tribunal for its review and comments.
11.10.7 During various telephone conversations, the Claimant was notified that Ms Gaise, the Solicitor-General, had signed the Award on Agreed Terms, but was awaiting the remaining two required signatures (i.e., the Chief Director of MOFEP and the Commissioner-General of GRA).296 Additionally, via telephone call on the evening of 14 January 2013, Mr Appenteng was informed by the Director Legal of MOFEP that the Award on Agreed Terms had been signed by all three required signatories and that the Ghanaian Vice-President had also approved it.297 However, despite various representations and promises made by the Respondent, a signed copy of the Award on Agreed Terms was never produced.
11.10.8 On 14 January 2013, the first day of the Evidentiary Hearing, the Tribunal requested that certain changes be made to the language (but not the terms) of the Award on Agreed Terms, which was then circulated to the Parties in a redlined version.298 The Claimant agreed to these changes but, to the Tribunal's knowledge, the Respondent has never provided its acceptance of the changes requested.
"1. If, before the award is made, the parties agree on a settlement of the dispute, the arbitral tribunal shall either issue an order for the termination of the arbitral proceedings or, if requested by both parties and accepted by the tribunal, record the settlement in the form of an arbitral award on agreed terms. The arbitral tribunal is not obliged to give reasons for such an award.
2. If, before the award is made, the continuation of the arbitral proceedings becomes unnecessary or impossible for any reason not mentioned in paragraph 1, the arbitral tribunal shall inform the parties of its intention to issue an order for the termination of the proceedings. The arbitral tribunal shall have the power to issue such an order unless a party raises justifiable grounds for objection.
3. Copies of the order for termination of the arbitral proceedings or of the arbitral award on agreed terms, signed by the arbitrators, shall be communicated by the arbitral tribunal to the parties. Where an arbitral award on agreed terms is made, the provisions of article 32, paragraphs 2 and 4 to 7, shall apply."
"2. The award shall be made in writing and shall be final and binding on the parties. The parties undertake to carry out the award without delay.
4. An award shall be signed by the arbitrators and it shall contain the date on which and the place where the award was made. Where there are three arbitrators and one of them fails to sign, the award shall state the reason for the absence of the signature.
5. The award may be made public only with the consent of both parties.
6. Copies of the award signed by the arbitrators shall be communicated to the parties by the arbitral tribunal.
7. If the arbitration law of the country where the award is made requires that the award be filed or registered by the arbitral tribunal, the tribunal shall comply with this requirement within the period of time required by law."
"With regard to who will sign the agreed terms of settlement on behalf of govt [sic] of Ghana the vice president indicated that it would be the Solicitor-General, the Chief Director of the Ministry of Finance and Economic Planning and the Commissioner-General of the Ghana Revenue Authority." (emphasis in original)300
"MR BORN: Professor Koppenol, isn't it basic contract law that there's a difference between agreement to terms and consent to be legally bound by those terms, and isn't it quite clear that we don't have Ghana's consent to be legally bound by those terms?
PROFESSOR KOPPENOL-LAFORCE: The position of Bankswitch is that, given the emails they have been sending and the questions they have been asking and how they stated in their last email, you could say that they have – that there is consent. Of course, that's the statement of Bankswitch.
MR BORN: No, I understand that's your position. But trying to look at this objectively, isn't it very difficult to say that Ghana has consented to be bound by the terms of the award? Isn't this all if you will, in English terms, subject to contract, which is actual sign-off on the formal document, which has not happened?
PROFESSOR KOPPENOL-LAFORCE: I can't deny that the formal sign-off of the document has not happened, in a way that they really signed something and you saw the signatures. But if you see the email of yesterday evening, they say that at that point in time they would be in a position to communicate favourably with the Tribunal. So in fact, they already provide the answer, and the answer would be yes. They it's a mere formality that they didn't sign."302
"The effect of a stipulation that an agreement is to be embodied in a formal written document depends on its purpose. One possibility is that the agreement is regarded by the parties as incomplete, or as not intended to be legally binding, until the terms of the formal document are agreed and the document is duly executed in accordance with the terms of the preliminary agreement (e.g. by signature). This is generally the position where 'solicitors are involved on both sides, formal written agreements are to be produced and arrangements are made for their execution.' The normal inference will then be that 'the parties are not bound unless and until both of them sign the agreement.' [....] Conversely, an agreement which originally lacked contractual force for want of execution of the formal document may acquire such force by reason of supervening events. This could, for example, be the position where 'it can be objectively ascertained that the continuing intention [not to be bound until execution of the document] has changed or... subsequent events have recurred whereby the non-executing party is estopped by replying on his non-execution'; or where the party resisting the enforcement of the contract had 'waive[d]... [the] requirement' of 'a formal written contract.'"303
"The Tribunal is not required to issue an Award even if the parties have settled the dispute and all parties request it. Usually, a Tribunal will comply with a request to issue an Award unless it has some concern about either the dispute or the settlement. [....] In some very exceptional cases, the Tribunal may not understand the basis for the settlement or may have some doubts as to the reality of the positions of the parties. In such very exceptional circumstances, the Tribunal may prefer to decline to issue an Award and prefer to issue an order for termination."305
"(1) Parliament may, by a resolution supported by the votes of a majority of all the members of Parliament, authorise the Government to enter into an agreement for the granting of a loan out of any public fund or public account.
(2) An agreement entered into under clause (1) of this article shall be laid before Parliament and shall not come into operation unless it is approved by a resolution of Parliament.
(3) No loan shall be raised by the Government on behalf of itself or any other public institution or authority otherwise than by or under the authority of an Act of Parliament.
(4) An Act of Parliament enacted in accordance with clause (3) of this article shall provide –
(a) that the terms and conditions of a loan shall be laid before Parliament and shall not come into operation unless they have been approved by a resolution of Parliament; and
(b) that any moneys received in respect of that loan shall be paid into the Consolidated Fund and form part of that Fund or into some other public fund of Ghana either existing or created for the purposes of the loan.
(5) This article shall, with the necessary modifications by Parliament, apply to an international business or economic transaction to which the Government is a party as it applies to a loan."309
"The argument that, without the legislative modifications that the Constitution mandates under article 181(5), the provision is inoperative and cannot be enforced is erroneous and the defendants are precluded by stare decisis from re-opening that issue. We have already referred to the passage in Attorney-General v Faroe Atlantic Co. Ltd. [2005-6] SCGLR 271, where the Supreme Court held that even before Parliament acts on the modifications to article 181(5) it is enforceable. That position is supported, not only by authority, but also by principle. The framers could hardly have intended that Parliament should be able to stultify their purpose of achieving transparency in the Executive's international business deals through simple inaction. Such an interpretation of article 181(5) would be unreasonable and not in tune with the purpose of the provision."315
"We think that a business transaction is 'international' within the context of article 181(5) where the nature of the business which is the subject-matter of the transaction is international in the sense of having a significant foreign element or the parties to the transaction (other than the Government) have a foreign nationality or reside in different countries or, in the case of companies, the place of their central management and control is outside Ghana."316
11.32.1 Negotiation of the Agreement : The Claimant has focused on the fact that the First MOU was signed on behalf of Bankswitch and GETGroup by Mr Janes Osei-Pokuand and that the Agreement was negotiated and signed by Dr Appenteng also on behalf of these two entities; the Claimant highlights that both Mr James Osei-Poke and Dr Appenteng are Ghanaian nationals and residents.321 However, the Tribunal does not consider the nationality of an entity's representative to be a significant factor in determining whether the entity itself was "international" for the purposes of its determination of the applicability of Article 181(5) to the Agreement.
11.32.2 Bankswitch Shareholders : The Respondent has argued that the existence of foreign shareholders should lead to a determination that the Agreement is "international" in nature.322 According to the Claimant's evidence, at the time of the negotiation and execution of the Agreement, 40% of Bankswitch shares were indirectly held by Ghanaian nationals residing in Ghana.323 While Balkan Energy involved a wholly owned subsidiary of a foreign parent company, the court did not state that a company must be wholly owned by a foreign investor or parent in order to be considered "international". The Tribunal agrees with the Respondent that the 60% foreign ownership of Bankswitch is a factor that must be taken into account in considering the applicability of Article 181(5) to the Agreement.
11.32.3 Control of Bankswitch's Management : The Claimant has provided evidence that the control of the management of Bankswitch was in Ghanaian hands, especially as Dr Appenteng was appointed as its Managing Director.324 According to the Claimant, it is the de facto control of the company and not the place of residence of Bankswitch and GETGroup that is the relevant test for determining the "international" factor.325 Although the control of the entity in question was not addressed in Balkan Energy, the court in that case made it clear that the relevant analysis should not be restricted to a finite list of factors because the consideration should be made on a case by case basis and should include any relevant factors posed by the Parties. The Tribunal has taken the control of Bankswitch's management into account as a factor in considering the applicability of Article 181(5) of the Constitution to the Agreement.
11.32.4 GETGroup's Involvement with the Agreement : The Respondent has argued that (i) GETGroup operates from premises in Dubai; (ii) significant elements of the GCS are hosted at the Dubai premises; and (iii) GETGroup provided a Dubai address for assistance with GCS technical information.326 The Claimant contends that it is irrelevant from where GETGroup operates because, for the purposes of the Agreement, it chose to domicile itself at the Bankswitch offices to have a presence in Ghana.327 The Tribunal has considered the participation of GETGroup, a Dubai company, in the Agreement as a factor in its determination of the applicability of Article 181(5) to the Agreement.
11.32.5 Registration with the Ghana Investment Promotion Centre : The Respondent has not elaborated on its argument regarding Bankswitch's registration with the GIPC. According to its website, the GIPC is a Ghanaian Government agency established to "encourage, promote and facilitate investments in all sectors of the economy except mining and petroleum" and that "facilitates and supports local and foreign investors in both the manufacturing and services sectors as they seek more valuecreating operations, higher sustainable returns and new business opportunities".328 Bankswitch was registered with the GIPC (Registration No CA-23,099/2116) as a company under foreign ownership, so the Tribunal has given this factor consideration in its determination of the applicability of Article 181(5) to the Agreement.
11.32.6 Relationship with the Wealth and Economic Resources of Ghana : The Respondent has not elaborated on its statement that the Agreement's relationship with the wealth and economic resources of Ghana evidences the "international" nature of the contract, nor has the Claimant addressed this argument. The only mention of the relevance of a transaction's impact on the wealth and economic resources of Ghana was made in Faroe Atlantic in relation to the reasoning behind the 1992 Constitution, including the requirement for parliamentary approval in Article 181. Although the court in Balkan Energy did not specifically consider this element in its decision, it did make clear that a decision on Article 181(5)'s application should be based on a purposive approach, therefore mandating that the purpose of the enterprise should be taken into account. Accordingly, the Tribunal has given the Agreement's relationship to the wealth and economic resources of Ghana consideration as a factor in determining the applicability of Article 181(5) to the Agreement.
11.32.7 Engagement of Foreign Entities : The Respondent argues that the third-party contracts entered into by Bankswitch with international companies evidences the international nature of the Agreement. For example, according to Clause 3.1 of the Technical Consultant Agreement, GET Holdings (Cyprus) was subcontracted to perform three activities for which it was entitled to 16% of the total Service Fee collected: (i) business process review and analysis; (ii) system design configuration and recommendations; and (iii) strategic planning advisory services.329 Additionally, the Claimant contracted with Intertek International (UK) for price verification services and Faberkener (Panama) for management services.330 The Claimant argues that such third-party contracts cannot change the nature of the Agreement because these contracts were not entered into until well after the date of the signing of the Agreement.331 To hold otherwise would, according to the Claimant, lead to the possibility of a contract that was valid at the time of signing becoming invalid at some indeterminate future time if an international party became involved.332 The Tribunal rejects the Respondent's contention that the engagement of sub-contractors to assist in the performance of a contract would lead to the characterisation of the main agreement as international even if it previously was not. To do so would effectively lead to the result that a contract for goods that required parts from a foreign manufacturer would have to receive parliamentary approval. In response to a similar argument from the Respondent, the Balkan Energy court characterised the argument as a reductio ad absurdum and noted that there is a principle necessarily implied into Article 181(5) of the Ghanaian Constitution "that only major international business or economic transactions are to be subject to its provisions".333 The implementation of computer hardware developed and manufactured outside of Ghana would not characterise Bankswitch's services as being international in nature. Similarly, in the case of a service contract, the mere existence of a subcontract for services utilised only by the contractor and not the Government should not change the characterisation of the primary contract as international. Further, the listing of foreign entities in itemised costs on invoices to the Government is irrelevant because payments according to such invoices were made on account of Bankswitch's future Service Fee and were thus costs that would have been borne by Bankswitch.334
11.32.8 Waiver of Sovereign Immunity : The Claimant argues that the lack of a clause in the Agreement waiving the Government's sovereign immunity is a major departure from the facts of Balkan Energy and evidences the inapplicability of Article 181(5) of the Ghanaian Constitution in this case.335 While the contract in Balkan Energy did include such a waiver at Clause 24,336 the lack of such a clause does not automatically lead to a determination that the Agreement is not "international" in nature. That being said, the lack of a sovereign immunity waiver in the Agreement was considered by the Tribunal in its determination of the applicability of Article 181(5) to the Agreement.
11.32.9 Tax and Foreign Exchange Control Clause : The Claimant argues that the lack of a clause in the Agreement exempting Bankswitch from certain taxes or foreign exchange controls is a major departure from the facts of Balkan Energy and evidences the inapplicability of Article 181(5) of the Ghanaian Constitution to the Agreement.337 While the contract in Balkan Energy did include such a provision at Clause 29.2,338 the lack of such a clause does not automatically lead to a determination that the Agreement is not "international" in nature. However, this has been considered as a factor by the Tribunal in its determination of the applicability of Article 181(5) to the Agreement.
11.32.10 Relationship to the Wealth and Economic Resources of Ghana : The Respondent has argued that the fact that the Agreement weighs on the wealth and economic resources of Ghana should result in it being subject to Article 181(5) of the Constitution. 339 The Faroe Atlantic court noted that the origin of Article 181 related to the huge debt that has been incurred by the Government and called for specific provisions in the Constitution to deal with the questions of loans.340 The Tribunal acknowledges the public policy interest of the Government to protect against the accrual of debt levels similar to those that had bankrupted the Government, giving rise to the 1992 Constitution and the requirement that Article 181(5) should be interpreted with a "purposive" approach. The Tribunal has therefore placed weight on the Agreement's effect on the wealth and economic resources of Ghana.
11.32.11 Provision for UNCITRAL Rules : The Respondent argues that the inclusion of a dispute resolution clause (Clause 19) in the Agreement that calls for arbitration under the UNCITRAL Rules shows that the Agreement provides for "international commercial arbitration" and is therefore an "international" transaction.341 The Claimant believes that Clause 19 of the Agreement does not lead to the contract being an "international" one because (i) the clause required an attempt at conciliation before any arbitration was commenced and (ii) the clause did not stipulate whether the arbitration was to take place inside or outside of Ghana, and the fact that arbitration is now taking place outside of Ghana is irrelevant to a determination under Article 181(5) of the Ghanaian Constitution since this would not have been known to the Parties at the time of their contracting.342 While it is true that the UNCITRAL Rules are technically available to parties involved in purely domestic arbitrations, such a scenario would be novel in practice, and the Tribunal is unpersuaded by the Claimant's argument, without evidence, that Clause 19 was specifically intended to address that unique situation. The UNCITRAL Rules were developed by the United Nations Commission on International Trade Law specifically "as a method of settling disputes arising in the context of international commercial relations" and "prepared after extensive consultation with arbitral institutions and centres of international commercial arbitration" for "the use [...] in the settlement of disputes arising in the context of international commercial relations, particularly by reference to the Arbitration Rules in commercial contracts".343 The Tribunal has therefore considered Clause 19 of the Agreement as a factor in its determination of the applicability of Article 181(5) to the Agreement.
"In arbitrary states [the laws of nations], whenever it contradicts or is not provided for by the municipal law of the country, is enforced by the royal power: but since in England no royal power can introduce a new law, or suspend the execution of the old, therefore the law of nations (wherever any question arises which is properly the object of [its] jurisdiction) is here adopted in [its] full extent by the common law, and is held to be part of the law of the land. And those acts of parliament, which have from time to time been made to enforce this universal law, or to facilitate the execution of its decisions, are not to be considered as introductive of any new rule, but merely as declaratory of the old fundamental constitutions of the kingdom; without which it must cease to be part of the civilized world."348
"In Anglophone Africa, on the few occasions when domestic courts have been seized with the question, they have tended to follow the approach currently favoured by the English courts at the material time. Thus, the courts in Ghana and Uganda, for example, have adopted the incorporation doctrine in accepting the applicable rules of customary international law as part of the municipal law of those countries."349
"The Government of Ghana shall conduct its international affairs in consonance with the accepted principles of public international law and diplomacy in a manner consistent with the national interest of Ghana."351
"(1) The laws of Ghana shall comprise-
(a) this Constitution;
(b) enactment made by or under the authority of the Parliament established by this Constitution;
(c) any Orders, Rules and Regulations made by any person or authority under a power conferred by this Constitution;
(d) the existing law; and
(e) the common law.
(2) The common law of Ghana shall comprise the rules of law generally known as the common law, the rules generally known as the doctrines of equity and the rules of customary law including those determined by the Superior Court of Judicature.
(3) For the purposes of this article, 'customary law' means the rules of law which by custom are applicable to particular communities in Ghana.
(4) The existing law shall, except [as] otherwise provided in clause (1) of this article, comprise the written and unwritten laws of Ghana as they existed immediately before the coming into force of this Constitution, and any Act, Decree, Law or statutory instrument issued or made before that date, which is to come into force on or after that date.
(5) Subject to the provisions of this Constitution, the existing law shall not be affected by the coming into force of this Constitution.
(6) The existing law shall be construed with any modifications, adaptations, qualifications and exceptions necessary to bring it into conformity with the provisions of this Constitution, or otherwise to give effect to, or enable effect to be given to, any changes effected by this Constitution."
"Legislation of the Imperial Parliament, even in contravention of generally acknowledged principles of international law, is binding upon and must be enforced by the courts of this country, for in these courts the legislation of the Imperial Parliament cannot be challenged as ultra vires."354
"The rights, duties, declarations and guarantees relating to fundamental human rights and freedoms specifically mentioned in this Chapter shall not be regarded as excluding others not specifically mentioned which are considered to be inherent in a democracy and intended to secure the dignity of man."362
"In its dealings with other nations, the Government shall
(a) promote and protect the interests of Ghana;
(b) seek the establishment of a just and equitable international economic and social order;
(c) promote the respect for international law, treaty obligations and the settlement of international disputes by peaceful means;
(d) adhere to the principles enshrined in or as the case may be, the aims and ideals of-
(i) the Charter of the United Nations;
(ii) the Charter of the Organisation of African Unity;
(ii) the Commonwealth;
(iv) the Treaty of the Economic Community of West African States; and
(v) any other international organisation of which Ghana is a member."
"The laws of Ghana are as set out in Article 11 (1) of the Constitution. The Constitution is the supreme law of Ghana. Consequently, laws, municipal or otherwise which are found to be inconsistent with the Constitution cannot be binding on the State whatever their nature. International laws, including intra African enactments, are not binding on Ghana until such laws have been adopted or ratified by the municipal laws…"363
"[I]t would thus be worth our while to examine this question of the relationship between international law and municipal law in Ghana. Ghanaian law on this basic question is no different from the usual position of Commonwealth common law jurisdictions. It is that customary international law is part of Ghanaian law, incorporated by the weight of common law case law [....] This position of the law is usually referred to as reflecting the 'dualist' school of thought, as distinct from the monist approach followed by some other States."365
"The characterization of an act of a State as internationally wrongful is governed by international law. Such characterization is not affected by the characterization of the same act as lawful by internal law."
"The question of conformity of national legislation with international law is a matter of international law. The notion that if a matter is governed by national law it is for that reason at the same time outside the sphere of international law is both novel and, if accepted, subversive of international law. It is not enough for a State to bring a matter under the protective umbrella of its legislation, possibly of a predatory character, in order to shelter it effectively from any control by international law. There may be little difference between a Government breaking unlawfully a contract with an alien and a Government causing legislation to be enacted which makes it impossible for it to comply with the contract."373
"[E]ven in the case of a contract which cannot be considered to be governed or subject to international law, and which therefore allows for a greater role of the domestic legal system and national sovereignty, some key aspects of such contract will, nevertheless be subject to the operation of international law either because there are specific clauses to this effect or because the general safeguards of international law will always be at hand. The latter will of course operate independently from the contract to the extent that there is an international wrong."376
"[I]t can be concluded that treaties and contracts, albeit different, pursue the same objective of ensuring the rule of law and the observance of legal commitments in the international community and are thus called to increasing interaction. To this end, treaties are becoming privatized by allowing a greater role for individuals in their operation, just as contracts are becoming public to the extent that states and international law extend their guarantees to their observance. All of it points towards the need for global protections in a global society, where perhaps the distinction between public and private law will become less meaningful."379
"[I]nternational public policy would be strongly opposed to the idea that a public entity, when dealing with a foreign party, could openly, knowingly and willingly enter into an arbitration agreement, on which its co-contractor would rely, only to claim subsequently, whether during the arbitral proceedings or on enforcement of the award, that its own undertaking was void."390
"[The] international ordre public would vigorously reject the proposition that a State organ, when dealing with foreigners, having openly, with knowledge and intent, concluded an arbitration clause that inspires the cocontractant's confidence, could thereafter, whether in the arbitration or in execution proceedings, invoke the nullity of its own promise."391
"What appears to be the common denominator of the various aspects of estoppel which have been discussed, is the requirement that a State ought to maintain towards a given factual or legal situation an attitude consistent with that which it was known to have adopted with regard to the same circumstances on previous occasions. At its simplest, estoppel in international law reflects the possible variations, in circumstances and effects, of the underlying principles of consistency which may be summed up in the maxim allegans contraria non audiendus est. Linked as it is with the device of recognition, it is potentially applicable throughout the whole field of international law in a limitless variety of contexts, not primarily as a procedural rule but as a substantive principle of law. [....] The extent to which different aspects of estoppel have been 'accepted as law' is a question which can be answered only against the background of a wider survey of the practice of States than has so far been undertaken. It may be considered probable, however, that some aspects of estoppel are in [the] process of fulfilling, if they do not already fulfil, the criteria demanded of an international custom. Any such development towards the establishment of estoppel on a customary basis may be welcomed inasmuch as it serves to encourage respect for the precept of good faith and to promote a measure of stability in the legal relations between States."397
"The principle of preclusion is the nearest equivalent in the field of international law to the common-law rule of estoppel, though perhaps not applied under such strict limiting conditions (and it is certainly applied as a rule of substance and not merely as one of evidence or procedure). It is quite distinct theoretically from the notion of acquiescence. But acquiescence can operate as a preclusion or estoppel in certain cases, for instance where silence, on an occasion where there was a duty or need to speak or act, implies agreement, or a waiver of rights, and can be regarded as a representation to that effect.... On that basis, it must be held in the present case that Thailand's silence, in circumstances in which silence meant acquiescence, or acted as a representation of acceptance of the map line, operates to preclude or estop her from denying such acceptance, or operates as a waiver of her original right to reject the map line or its direction at Preah Vihear.
However, in those cases where it can be shown that a party has, by conduct or otherwise, undertaken, or become bound by, an obligation, it is strictly not necessary or appropriate to invoke any rule of preclusion or estoppel, although the language of that rule is, in practice, often employed to describe the situation. Thus it may be said that A, having accepted a certain obligation, or having become bound by a certain instrument, cannot now be heard to deny the fact, to 'blow hot and cold'. True enough, A cannot be heard to deny it; but what this really means is simply that A is bound, and being bound, cannot escape from the obligation merely by denying its existence. In other words, if the denial can be shown to be false, there is no room or need for any plea of preclusion or estoppel. Such a plea is essentially a means of excluding a denial that might be correct – irrespective of its correctness. It prevents the assertion of what might in fact be true. Its use must in consequence be subject to certain limitations. The real field of operation, therefore, of the rule of preclusion or estoppel, stricto sensu, in the present context, is where it is possible that the party concerned did not give the undertaking or accept the obligation in question (or there is room for doubt whether it did), but where that party's subsequent conduct has been such, and has had such consequences, that it cannot be allowed to deny the existence of an undertaking, or that it is bound."401
"Even if the Respondent was correct in any of its submissions on the miscellaneous points dealt with... above, they would nevertheless fail on them simply because they have rested on their rights. These Agreements were entered into years ago and both parties have acted on the basis that all was in order. Whether one rests this conclusion on the doctrine of estoppel or a waiver matters not. Almost all systems of law prevent parties from blowing hot and cold. If any of the suite of Agreements in this case were illegal or unenforceable under Hungarian law one might have expected the Hungarian Government or its entities to have declined to enter into such an agreement. However when, after receiving top class international legal advice, Hungary enters into and performs these agreements for years and takes the full benefit from them, it lies ill in the mouth of Hungary now to challenge the legality and/or enforceability of these Agreements. These submissions smack of desperation. They cannot succeed because Hungary entered these agreements willingly, took advantage from them and led the Claimants over a long period of time, to assume that these Agreements were effective. Hungary cannot now go behind these Agreements. They are prevented from doing so by their own conduct."404
"There is a very substantial difference between the simple and clear-cut rule adopted and applied in the international field and the complicated classifications, modalities, species, sub-species and procedural features of the municipal system."405
As applicable to this case, the elements of estoppel include (i) an unambiguous statement or representation by the Respondent (either through words or conduct); (ii) which is voluntary, unconditional and authorised; (iii) which is relied on by the Claimant in good faith; and (iv) with such reliance operating either to the detriment of the Claimant or the advantage of the Respondent.406
(a) the training of Government and shipping line staff under Clause 6 of the Agreement;
(b) various statements by CEPS, RAGB and MOFEP officials regarding the planned implementation of the software in committee meetings and correspondence between the Parties;
(c) the signing of the Second MOU governing the responsibilities regarding the Valuation Office;
(d) the various public notices as well as administrative and policy instructions stating that the GCS would be implemented and "go live" in Ghana as required under Clause 5(d); and
(e) the payment of invoices and making of down payments by the Government to Bankswitch on account of the Service Fee under Clause 7(iii).
"Having carefully examined the above mentioned Agreement, I am of the opinion that there is a valid and legally binding contract between the parties."407
(a) It was not addressed or copied to Bankswitch, nor has any evidence been offered as to how Bankswitch came into possession of a copy of it.
(b) The Respondent challenges the effect of this letter on the sole ground that the letter was not addressed to Bankswitch, but has not argued that Bankswitch came into possession of the copy by improper means. The Tribunal therefore proceeds on the assumption that a copy was lawfully furnished to Bankswitch, presumably by a person in the Government with the intention of informing Bankswitch of the views of the Attorney-General and Minister of Justice.
(c) Given that the Attorney-General and Minister of Justice must have been aware of the decision in Faroe Atlantic at the time of her letter in 2011 (the AttorneyGeneral having been a party in that case), her opinion of the legal position of the Agreement in relation to Article 181(5) of the Ghanaian Constitution must mean that she did not find that Article 181(5) would apply to the Agreement so as to nullify any transactions made in potential contravention of that provision.
(d) In the circumstances, the Tribunal regards this letter as confirming the earlier representations by the Government to Bankswitch that there was no issue regarding the legality of the Agreement on any ground (including unconstitutionality).
"According to Dutch private international law (a) the laws of the country in which the legal person was incorporated are applicable to the question regarding the restrictions on the legal person's authority and the question regarding the external enforceability of such restrictions and (b) no restrictions on authority can be invoked against a counterparty that was not aware and could not have been aware of such restrictions. In international legal transactions in principle the party that acted in good faith with regard to its counterparty's authority to act will be protected."415