The Commercial Division of the High Court has indicated that the Electricity Company of Ghana (ECG) has not been sued by PDS in any court in the country.
Initial reports indicated that the Electricity company had been sued by the Power Distribution Service for the termination of its contract in the country.
But clarifying the issue, the court explained that,;the action in Court was against the Energy Commission and not ECG, for the “unlawful” termination of PDS operating licenses by the Commission. Thus the Court gave its ruling on Friday, 2nd July 2021.
PDS last year dragged the government to the High Court with a judicial review application asking the court to quash the cancellation of its operation licenses by the government,;acting through the Energy Commission.
However, the court presided over by Her Ladyship;Justice Akua Sarpomaa Amoah in a ruling dismissed an application for the judicial review filed by Power Distribution Services Limited (PDS) against the Attorney-General,;following the cancellation of PDS’ Operating Licenses issued by the Energy Commission.
In giving its ruling, the Court only stated that the suit was dismissed and awarded cost of Ghs5,000 in favor of the Commission. The Court further indicated that the parties could apply for copies of the ruling.
The parties are yet to know the reason(s) behind the decision, as copies of the ruling are yet to be received.
ECG-PDS agreement
In July 2018, the ECG signed two agreements with PDS. It was a lease assignment agreement, which allowed PDS to manage the assets of the ECG worth more than $3 billion and a bulk supply agreement for PDS to take over the distribution of electricity in the southern distribution zone of the country.
The conditions precedent of the agreements made it mandatory for PDS to secure a payment security to serve as a form of insurance for the assets of the ECG which it was managing.
The government said PDS presented a payment security in the form of demand guarantees from Al Koot Insurance, a Qatar-based insurance firm but government, however, started raising red flags in 2019 after accusing PDS of securing a fake demand guarantee.
According to the government, its checks revealed that Al Koot had not issued any demand guarantee for PDS and subsequently terminated the concession agreement with PDS in October 2019.
PDS law suit
Dissatisfied with the cancellation of its operation licences, on February 12, last year, PDS dragged the Energy Commission and the Attorney-General (A-G) to court, arguing that the commission had failed to give it a hearing and, therefore, breached the rules of natural justice.
It averred that apart from the Energy Commission breaching the rules of natural justice, it also failed to take into consideration certain rights it had under the transitional period following the termination of the concession agreement.
The Attorney General in an opposition also described PDS’s legal action as unwarranted and without any basis.
