GCNet ¢4bn arbitration claim thrown out; tribunal awards $2.2m costs to Ghana
An international arbitration tribunal in London has dismissed the claims of Ghana Community Network Services Limited (GCNet) against Ghana, awarding Ghana $2,185,983.21 in legal fees.
This amount 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.
GCNet filed for arbitration in June 2022, challenging the Government of Ghana’s termination of a service agreement for managing customs and trade systems at Ghanaian ports.
Under the agreement, GCNet charged users fees on import and export transactions.
The contract, initially signed in 2000, was extended multiple times by different Trade Ministers but without proper statutory approvals, violating Ghana’s procurement laws.
In 2020, the government terminated the agreement after a value-for-money assessment, offering compensation per the contract.
GCNet rejected this and sought over GH¢3.3 billion in damages, including claims for wrongful termination, government exemptions, and discounts granted to importers.
Ghana, represented by Attorney-General Godfred Dame, argued that the termination was lawful and that compensation should not exceed the $6 million cap specified in the agreement. The government maintained that:
• 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.
The tribunal further deemed GCNet the unsuccessful party and ordered it to pay Ghana’s legal costs.
This ruling is a major victory for Ghana, saving billions of cedis in potential liabilities while highlighting the importance of adhering to proper legal and contractual frameworks.
