The Bank of Ghana (Defendant) wins a lawsuit against Sibton Switch Systems Limited (Plaintiff) in relation to a request (case) filed for Arbitration with the London International Court of Arbitration (LCIA) on 9th April 2018 by the plaintiff.
The request for Arbitrage filed by Sibton Switch relates to the termination of Master Agreement between Sibton Switch and Bank of Ghana in 2017 by the plaintiff. The agreement as disclosed by the BoG, was purposed to grant Sibton Switch the exclusive right to “build, operate and own the Ghana Retail Payment Systems Infrastructure”.
According to the press release by the BoG, the said contract was entered into prior to the appointment of the new governing board of the BoG. Hence, the need to review the terms of the contract entered by the previous administration.
“Following the 2016 elections and on the appointment of a new Management of the Bank of Ghana, it became necessary to review the terms of the contract entered into by the previous administration.”
Bank of Ghana
Furthermore, the need for the defendant to terminate the contract came as a result of the plaintiff not having “neither the acquired licence nor fulfilled the condition precedent for the effectiveness of the rights and obligations of the parties”.
The BoG further disclosed that the contract was unilaterally beneficial to the plaintiff, hence, the contract did not consider the interest of the defendant.
Additionally, the defendant disclosed that the contract had some “corruptly-procured” content which laid about USD 478 million potential liability on the BoG.
“The contract awarded to Sibton Switch was one-sided in favour of Sibton Switch and was severely detrimental to the interests of Bank of Ghana.
“For example, the Public Procurement Authority (PPA) approval for the project provided that the Bank of Ghana’s maximum liability was to be GH¢300,000.
“Contrary to this approval, the corruptly-procured contract with Sibton Switch provided that the Bank of Ghana had a huge potential liability GH¢2.6 billion.”
Bank of Ghana
Additionally, the case presented by the plaintiff to the LCIA was intended to seek a relief sum of USD 478 million from the defendant.
Also, the BoG disclosed that the “the tender price of Sibton Switch was more than 33 times more expensive than the next most expensive bid”.
Following the termination of the contract with the plaintiff in 2017, the Bank of Ghana’s subsidiary, Ghana Interbank Payment and Settlement (GhIPSS), was able to deliver mobile payment systems interoperability at a fraction of the cost of the contract, saving the Ghanaian taxpayers billions of Cedis, the BoG disclosed.
The final verdict of the court proceedings on 28th July 2021 was reached on grounds of non-compliance by the plaintiff, after the previous interim award by the “Tribunal on 25th June 2019” in favour of the defendant, which required the plaintiff “to make interim award payment for security of cost”.
Furthermore, the end of the court proceedings witnessed “a panel of three distinguished arbitrators issue an award in favour of the Bank of Ghana in the LCIA arbitration, dismissing all the claims brought by Sibton Switch Systems Limited”.
Additionally, the final verdict ordered the plaintiff to pay the defendant in full “its costs of the arbitration, in respect of the Bank of Ghana’s legal fees”.
Dr. Ernest Addison, Governor of BoG, disclosed that he was pleased with favourable outcome the final verdict, for the Bank and especially for the billions of cedis saved for the Ghanaian taxpayer.
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