The name “Alfred Agbesi Woyome” virtually popularized the concept Judgment debts in Ghana. Songs were composed by entertainers in an attempt to keep the conversation in the news, demand an end to the trend and make light of the situation.
One such popular song had the chorus “Woyome, Woyome, Woyome Woyome, Woyome Woyome ehhh, gargantuan ooo Munky3 ndi”’
Politicians had a go at each other on who was to bear the utmost responsibility for causing various losses to the state through breach of contracts. Legal analysts spent many months assessing the facts available while journalists fished for more.
It came as no surprise that the NPP’s 2016 Manifesto pledged to halt the payment of what it termed dubious judgment debts.
“The corruption under John Mahama’s NDC Government is exemplified bypayments of dubious judgment debts and questionable settlements.”
A Commission headed by a sole judge, Justice Yaw Appau was tasked to probe the subject of judgement debts since 1992.
The Woyome saga
The facts surrounding the Woyome matter can be traced to July 2004 when Ghana won the rights to host the African Cup of Nations which was to take place in 2008. The nation thus set in motion processes for the award of various procurement contracts geared at rehabilitating and constructing stadia. Vamed Engineering Gmbh and CO KG submitted a tender for the award of a contract to rehabilitate some stadia.
Vamed was shortlisted by Government’s evaluation committee. The company later issued a letter indicating it has assigned its rights and obligations to Waterville Holdings Limited. Waterville was recommended by the Entity Tender Committee for the award of the contract with its tender declared the most competitive.
The Central Tender Review Board gave its concurrent approval for the award of the contract. The Ministry of Youth and Sports however purported to terminate the procurement process due to ‘high commitment implied in the submissions, the inconclusive and the non-assuring nature of the financial submissions”.
Waterville registered its displeasure and subsequently signed a Memorandum of Understanding with government indicating that they will be awarded the Ohene Djan and El Wak stadia project on a turnkey basis. Two separate but similar agreements were then signed for the rehabilitation of the Ohene Djan and El Wak stadia in Accra and the Baba Yara stadium in Kumasi.
The two agreements provided that they will only become effective once the contract is signed by all parties, signing of the Loan Agreement relating to the Contract by the Minister for Finance and Economic Planning, and Approval of the Contract by the Cabinet and Parliament of the Republic of Ghana, confirmation by the bank holding the Escrow Account to the Contractor that the Escrow Account is established and credited with the total amount of the Contract Price, receipt of the necessary approvals from Multilateral Investment Guarantee Agency (MIGA), Ex-Im Bank, USA and the Lender.”
In spite of the fact that the agreements were thus not yet in force, the Government granted Waterville access to the sites of the stadia.
The Deputy Minister of Education and Sports, by a letter dated 6th February, 2006, informed the Managing-Director of Waterville, that his Minister had “no objection to your moving to the construction sites to commence evacuation and demolition exercises for the rehabilitation and upgrading of the Accra, Kumasi and El-Wak stadia. By this notice, we are informing the authorities of the stadia and El-Wak to grant access to the construction teams for the agreed initial exercise.”
Waterville thus commenced works involving the demolition of structures and the excavation and clearing of the sites. Subsequently, on 1st August, 2006, the Government terminated the agreements with Waterville pointing out that the contracts did not receive Cabinet approval as provided for in the agreement.
Government then entered into negotiations with sub-contractors of Waterville, Micheletti and Co Ltd and Consar Ltd, to continue with the rehabilitation and refurbishment of the Ohene Djan, Baba Yara and El Wak stadia. The agreement reached with them was that Government would pay the sub-contractors the value of the work already executed by Waterville before the date of takeover by the sub-contractors of the work. The sub-contractors would then pay Waterville the value of work it had undertaken.
Government paid €22.3million for the work done. Waterville nonetheless wrote to government demanding payment for pre-financing costs for the initial construction works from the Government, instead of making the demand from their subcontractors, as agreed.
Woyome enters fray
In August, 2009, businessman Alfred Agbesi Woyome wrote to the Government, asserting that Waterville’s claim was grossly exaggerated and giving his opinion as to what was due from Government to Waterville. He described himself as the one who engineered the whole CAN 2008 concept.
“The claim by Waterville BVI should have been a joint claim by M-Powapak, Alfred Woyome, and Austro Invest. The quantum of Waterville BVI demand is far above what should have been the legitimate claim.
M-Powapak, Austro Invest, Alexandra Van-Cleef (Austro Invest Representative in the United States) and Alfred Woyome legitimate claim under this circumstance is Euro 6 million while Waterville claim should have been about Euro 5 million without interest, charges and damages.” He stated.
It is worth noting that Mr. Woyome was not a party to any of the agreements surrounding the transaction. Waterville wrote challenging Mr. Woyome’s claims.
“Mr. Woyome’s allegation that Waterville’s claim is illegitimate and clearly betrays his limited knowledge and involvement in the construction works, and importantly, his motive to discredit the legitimate claim of Waterville to payment of pre-financed works.
It is on record that work done by Waterville was certified by the Consultant. The certificates were issued pursuant to settlement negotiations initiated at the Castle, Osu a couple of years ago, and Waterville has been pressing its claims on GoG ever since. Mr. Woyome’s emergence in the matter is belated and with no locus standi.”
The businessman then sued government at the High Court demanding payment of 44.2 million euros or its cedi equivalent. He claimed he had procured more than 100 million euros for the construction of sports stadia, medical facilities, among others. The businessman told the High Court he was not relying on the terminated CAN 2008 agreements as basis for his claim. He however did not furnish the court with an independent contract upon which his claim was based on.
High Court rules
On 24th May, 2010, the High Court, Commercial Division, presided over by His Lordship Justice Tanko Amadu, entered final judgment against the Attorney-General for a total sum of GHC105,565,548.24. The Attorney-General’s Office then entered into negotiations with the businessman.
It was agreed that the businessman will be paid the sum of GHC51,283,480.59 representing the negotiated judgment debt as follows: a. Judgment debt – 41,811,480.59, b. Interest – 9,447,000.00, c. Costs – 25,000.00. This was to be paid by three equal monthly instalments in the sum of GHC17,094,493.53 beginning June, 2010 and ending August 31, 2010 in full and final settlement of the judgment debt. These terms of settlement were signed by both parties to the action in the presence of their counsel.
The Attorney-General then filed an application in the High Court to set aside these terms of settlement. The application was dismissed and the Court in the same ruling, adopted the terms of settlement as a Consent Judgment, on the 9th of June, 2010.
The A-G sued yet again seeking to set this aside on the grounds that it was procured by a mistake due to fraudulent misrepresentation by Mr. Woyome. The proceedings were still pending at the High Court when Martin Amidu took the matter to the Supreme Court.
Supreme Court takes over
Mr. Amidu contended at the Apex Court that the agreement for the rehabilitation of the stadia entered into between Ghana and Waterville Holdings which is based in the British Virgin Islands is an international business or economic transaction under Article 181(5) of the 1992 constitution. This provision states as follows; (1) Parliament may, by a resolution supported by the votes of a majority of all the members of Parliament, authorise the Government to enter into an agreement for the granting of a loan out of any public fund or public account
(5) This article shall, with the necessary modifications by Parliament, apply to an international business or economic transaction to which the Government is a party as it applies to a loan.”
Mr. Amidu contended that the agreement could only have become operative and binding on the Government of Ghana after being laid before and approved by Parliament. He argued that the office of Attorney-General acted in contravention of the constitution when it made payments arising out of these agreements. He insisted all transactions and claims made by Alfred Woyome using a foreign registered company Austro-Invest Management premised upon the said agreements also required parliamentary approval.
He urged the Court to declare that the High Court erred when it dealt with the case filed by the businessman. He asked the court to compel Waterville holdings and Alfred Woyome to refund all sums of money paid to them.
Ruling
The Supreme Court noted that the basis for the businessman’s claim for payment was Opaque. It explained that his claim suggests a relationship to the 2 terminated stadia agreements. It however noted that those agreements never became operative.
It further pointed out that Article 181 of the 1992 constitution which required parliamentary approval for international contracts had not been complied with.
“A contract which breaches article 181(5) of the Constitution is null and void and therefore creates no rights. It should not be legitimate to evade this nullity by the grant of a restitutionary remedy. Although one accepts the cogency of the argument that there is need to avoid unjust enrichment to the State through its receipt of benefits it has not paid for, there is the higher order countervailing argument that the enforcement of the Constitution should not be undermined by allowing the State and its partners an avenue or opportunity for doing indirectly what it is constitutionally prohibited from doing directly.”
The court emphasized the importance of parliamentary approval.
“The requirement that international business contracts to which the Government is a party should be approved by Parliament has a purpose and it should be made clear to Government and its partners that non-compliance with the requirement, directly or indirectly, will have consequences. We are accordingly inclined to the view that, where article 181(5) has been breached, a restitutionary remedy would be in conflict with the Constitution and therefore not available.”
Conclusion and subsequent review
The Court therefore concluded that it was unconstitutional for Government to pay Waterville for work it did prior to the conclusion of the terminated agreements.
“The 2nd defendant (Waterville) is thus obliged to return all monies paid to it pursuant to the transaction. The settlement, pursuant to which the monies were paid, was founded on an unconstitutional act and should be treated as null and void. It is obvious that the agreements of 26th April never became operative and even if they had become effective they would have been null and void if not approved by Parliament.”
On businessman Alfred Woyome, the court said since he was not a party to the international agreement, it could not apply its decision in relation to him unless it was demonstrated that he benefited from the agreement by way of work done before the agreements became operative but connected to it. It added that the High Court was the proper forum to determine whether there was a contract between Woyome and the Government such that either could enforce it.
Martin Amidu was however not satisfied with this conclusion as he believed the court could have equally compelled Alfred Woyome to refund the money rather than take the view that it was a matter to be litigated at the High Court as was already underway.
The Supreme Court ruled that all Mr. Woyome’s claims premised on the two agreements between Ghana and Waterville needed parliamentary approval. It explained that any transaction between Waterville, Woyome (acting through foreign registered Austro-Invest) to obtain loans for the stadia projects constitute an international transaction.
Attorney-General’s recoveries since 2014
The Attorney-General has since filed multiple legal processes in an attempt to seize cash contained in the businessman’s bank accounts and also sold some properties belonging to him. The sold properties included two houses at Trasacco Valley estates and one at Kpehe in Accra.
The Auctioneer however, could not find a buyer for the properties. He therefore applied to the National Security to consider purchasing the Trasacco properties. The National Security paid 8,350,000 cedis and 5,500,000 for the properties. The first had a market value of 11,099,000(11 million, ninety-nine thousand cedis) and a Forced sale value of 7,769,000 cedis (Seven million, seven hundred and sixty-nine thousand cedis).
The second had a market value of 6,407,000 (six million, four hundred and seven thousand cedis) and a forced sale value of 4,485,000 (four million, four hundred and eighty five thousand cedis).
One Mrs. Nellie Ekpi Woyome has meanwhile filed a claim of interest in the Kpehe property. This is still pending with the state’s total recoveries standing at 18,516,801 (Eighteen million, five hundred and sixteen thousand cedis, eight hundred and one cedis). The Office of Attorney-General says it is following various leads to retrieve the outstanding amounts.