Minister-designate for Trade and Industry, Alan Kyeremanteng, has allayed fears of a possible judgement debt incurred by the State over the sudden termination of its contract with trade facilitation company, Ghana Community Network System (GCNet).
Concerns raised over a possible judgment debt against the State follows a recent $134 million judgement debt slapped the country by the International Court of Arbitration over the cancellation of its Emergency Power Agreement with GCGP Limited in 2015.
The concerns were expressed by the Parliament’s Appointments Committee during Mr Kyeremanteng’s vetting as the Trade and Industry Minister-designate.
Speaking to the issue, Mr Kyeremanteng, noted government’s termination of its contract with GCNet was lawful and assured the Committee that no judgement debt will be incurred.
According to him, the original contract signed between GCNet and government in the year 2000, provided government the right to early termination of the contract upon payment of appropriate compensation.
“The transition from GCnet to ICUMS is not going to incur a judgement debt for the country, the original agreement signed between SGS/GCNet and government was signed on October 2, 2000 but it didn’t come into effect until 2003. The agreement provided for a ten year period of service provision and that was to take us from 2003 to 2013, but before the expiration of the agreement in 2013, there was a first supplemental agreement signed on August 26, 2013 giving an extension of 5 years to GCnet, so ostensibly the supplemental agreement was to end in 2018.”
“But strange enough in October 2016, two months before the end of the term of the previous government, and 2 years before the end of the contract, there was a second supplemental agreement signed on October 28, 2016, extending an unexpired term of an agreement for a further 5 years which was to end in 2023, so that called for some enquiries.”
“When I came into office in 2017, I realized that the supplemental agreements signed for the first and second in all intents and purposes ought to be construed as international agreements because SGS which is the largest shareholder of GCNet is a foreign company and there was a requirement in law for the supplemental agreements to be submitted to Parliament which was not done.”
“Second, article 11(3) of the original agreement signed in 2000 granted government the right to early termination, and so based on these two factors the supplemental agreements are void in law and so under normal circumstances we ought not to have even operationalised the agreement, but for us also to have allowed the contract to continue having found out its shortcomings in itself will be further violating the law.”
“And besides the provisions of the original agreement gives government the right of early termination upon payment of appropriate compensation.”
“So if GCNet or SGS decides to go to court, we will be ably represented and will look at the merits of the case,” the Trade Minister-designate posited.
SGS/GCNet’s contract with government to provide trade facilitation services at the nation’s land and sea borders was terminated in April 2020. Government is reported to have paid a total of $120 million in damages for the abrupt termination of the contract.
