An international arbitration tribunal in London has dismissed claims brought by Ghana Community Network Services Limited (GCNet) against the Government of Ghana, awarding Ghana $2,185,983.21 in legal fees. The sum includes $1,744,050.42 for legal representation and $441,932.79 for expert witness fees, with simple interest at USD SOFR + 1% if unpaid within 30 days.
GCNet initiated arbitration in June 2022 after the government terminated a service agreement under which GCNet managed customs and trade systems at Ghanaian ports. The company, which collected fees on import and export transactions, sought over GH¢3.3 billion in damages, claiming wrongful termination, exemptions, and discounts granted to importers.
The agreement, originally signed in 2000, had been extended multiple times without proper statutory approvals, violating Ghana’s procurement laws. In 2020, the government terminated the contract following a value-for-money assessment and offered compensation in line with the agreement. GCNet rejected this offer and pursued arbitration.
Ghana, represented by Attorney-General Godfred Dame, argued that the termination was lawful and that compensation should not exceed the $6 million cap outlined in the agreement. The government further maintained that:
- GCNet’s claims for losses from exemptions and discounts lacked merit as these policies adhered to Ghanaian law and international trade standards.
- GCNet had forfeited its right to seek damages by not contesting these policies earlier.
- Compound interest was inapplicable under Ghanaian law, and any awarded sum should only attract simple interest.
The tribunal ruled unanimously in favor of Ghana, determining that:
- The April 2020 termination of the agreement was lawful.
- GCNet had waived its rights to claim damages related to exemptions and discounts.
- GCNet was entitled to $5.4 million for early termination as stipulated in the contract.
Additionally, the tribunal deemed GCNet the unsuccessful party and ordered it to cover Ghana’s legal costs.
This ruling marks a significant victory for Ghana, saving the country billions of cedis in potential liabilities and reinforcing the importance of adhering to legal and contractual frameworks.