The court of appeal has urged defunct TI Microfinance Limited to seek redress from the Court of Arbitration.
In a ruling, the Court of Appeal, has in a complete agreement of a decision made by three-member panel, upheld that the judicial review application filed before the High Court in relation to the revocation of the operating licence of a defunct microfinance company, TI Microfinance Limited, by the Bank of Ghana (BoG), was wrong in law.
The court, in its ruling, disclosed that per Section 141 of the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930), any argument concerning the revocation of the license of an insolvent entity by the Central Bank should be sent to arbitration for redress.
“By the provision of the law, a party aggrieved by the decision of the Bank of Ghana and desires to seek legal redress shall resort to arbitration. Act 930 has provided a remedy for an aggrieved person to submit himself to arbitration, the applicant is enjoined by law to submit himself to arbitration.
“For, after all, it is the duty of the court to uphold Acts of Parliament. It has been said that, the courts are servants of the legislature in terms of construing laws passed by Parliament.”The Court of Appeal
BoG, TI Microfinance Limited Tussle
Mr. Emmanuel Babuboa, the Founder of TI Microfinance Limited, on October 23, 2019 filed a certiorari application at the High Court against BoG’s decision to revoke the bank’s operating license without any notice in conformity with Section 16 of Act 930.
Mr. Babuboa therefore urged the court to reject the Central Bank’s decision to revoke the operating license of the company by considering it as invalid.
The Bank of Ghana after being served with a judicial review application, filed a preliminary legal objection for the High Court to set it aside on the basis that, the application was flawed in law.
On December 2, 2022, the High Court dismissed the preliminary legal objection by the BoG and awarded cost of GH¢15,000 against the Central Bank. The BoG then appealed the decision of the High Court to the Court of Appeal.
Making a case for the appeal, BoG argued that, it revoked the license of TI Microfinance under Section 123 of Act 930 and not Section 16.
“Unlike Section 16 that allows the BoG to revoke the license of a financial institution that is engaged in a crime or illegalities, Section 123 of Act 930 allows the BoG to revoke the license of a financial institution that is insolvent.”Bank of Ghana
According to BoG, per Section 141of Act 930, any entity dissatisfied with a decision of the BoG to revoke its license under Section 123 ought to resort to arbitration and not litigation.
In view of that, the BoG argued that, the applicant breached Section 141 of Act 930 by resorting to a judicial review application instead of arbitration to seek redress, and therefore the High Court should not had entertained the application.
“In the instant case, although the challenge is against the decision of a public institution, statue has specifically prescribed the form for seeking redress. Thus, the respondent is disabled from circumventing the procedure set out in the Act.”Bank Of Ghana