Ghana wins wrongful termination case against GCNet, awarded $2.2m costs
An international arbitration tribunal in London has dismissed the Ghana Community Network Services Limited (GCNet)’s claims, challenging the Government of Ghana’s termination of a service agreement for managing customs and trade systems at Ghanaian ports.
The court awarded Ghana $2,185,983.21 in legal fees, which 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 of the ruling.
The application was filed by GCNet for arbitration in June 2022.
Under the agreement, GCNet was in charge of charging users’ fees on import and export transactions.
Initially signed in 2000, the contract was extended multiple times by different trade ministers but without proper statutory approvals, violating Ghana’s procurement laws.
The government terminated the agreement in 2020 after a value-for-money assessment, offering compensation per the contract.
This did not sit well with GCNet, who rejected the termination and sought over GH¢3.3 billion in damages, including claims for wrongful termination, government exemptions, and discounts granted to importers.
Represented by the Attorney-General, Godfred Dame, Ghana argued that the termination was lawful and that compensation should not exceed the $6 million cap specified in the agreement.
The government maintained the following stances:
• GCNet’s claims for losses due to exemptions and discounts were baseless as the policies complied with Ghanaian law and global trade standards.
• GCNet had waived its rights to seek damages from such policies by not contesting them earlier.
• Compound interest was inapplicable under Ghanaian law, and any awarded sum should attract simple interest only.
The tribunal unanimously ruled in favour of Ghana, determining that:
• The termination of the agreement in April 2020 was lawful.
• GCNet waived its rights to claim damages from exemptions and discounts.
• GCNet was entitled to $5.4 million for early termination, as stipulated in the agreement.
In its ruling, the tribunal deemed GCNet the unsuccessful party and ordered it to pay Ghana’s legal costs, asaaseradio.com reports have noted.
Ghana’s victory saves the country several billions of cedis and highlights the importance of adhering to the terms of contracts and other legal dealings.
