Balkanization Manuscript

BALKANIZATION OF AMIDU: AN ANALYSIS OF THE JURISPRUDENCE OF THE SUPREME
COURT ON THE REQUIREMENT OF PARLIAMENTARY RATIFICATION OF INTERNATIONAL

BUSINESS OR ECONOMIC TRANSACTIONS
Clement Kojo Akapame
Abstract
The growth of international trade and commerce over the years has meant that
Governments now interact more often with private business entities in domestic
and cross-border economic or business transactions. The nature of these business or
economic transactions in the main include the procurement of funds, the purchase
of equipment and the supply of the services. The extensive scope of the interaction
between Government and private business entities exposes both parties to rights
responsibilities and liabilities.
In recent times, the Parliamentary oversight on the business and economic
activities the Government has been put under strict scrutiny with adherent of
concept hoisting the provisions in Article 181 (5) of the 1992 Constitution in a crusade
for judicial interpretation. The Supreme Court has also responded in equal measure
in a line of judicial decisions interpreting the latent provisions of Article 181 (5).
The focus of this paper is to analyse these decsions of the Supreme Court anchoring
it in the Constitutional history of the provision with the aim of finding out whether
the jurisprudence on the interpretation of Article 181(5) by the Court present a
harmonious tune of which Beethoven will be jealous off or cacophony of cords to
further complicate compliance with the constitutional provision.

BSc Admin (Banking and Finance), LLB, BL (Ghana), LLM (Michigan)
1
1. INTRODUCTION
The importance of public borrowing on economic growth continues to divide
opinion among economists. This is not unconnected with the effect of public
borrowing on such variables as the pre-borrowing economic wealth of countries,
the number and type of economic indicators included in the model, as well as the
technique of econometric analysis adopted, to mention only a few.
Investigating both linear and non-linear correlation between growth and public
debt1 in developed and developing countries, Schclarek2 found a positive and
negative relationship between these variables for developing and developed
countries, respectively. Expanding the indicators to take the effect of inflation
into account, Reinhart and Rogoff3 found a weak link between growth and low
levels of growth in developing countries, while Kumar and Jaejoon 4 found an
inverse relationship between initial public debt and growth, which worsened as
the Debt-GDP ratio reached 90 percent.
Economists have over time come to agree that economic growth and
development depends not only on the adoption of appropriate growth enhancing
policies, one of which is borrowing to finance government expenditure, but also
on the role of certain key institutions, like an independent and effective legal
system that champions the rule of law. This law-development nexus thus places
an immense obligation on the lawmakers to ensure that certain safeguards are
1
Borrowing and debt, although capable of different technical meanings, are used interchangeably in this Paper
2
Schclarek, A., 2004: Debt and Economic Growth in Developing and Industrial Countries. Lund University Department of
Economics Working Paper: 2005:34
3
Reinhart, C. M. and Rogoff, S. K, 2010. Growth in a Time of Debt. American Economic Review, 100 (2), 573-578
4
Kumar, M. S and Jaejoon W., 2010. Public Debt and Growth. IMF Working Paper, Volume WP/10/174
2
put in place when passing laws, with a view to checking the potential excesses of
the Executives.
It is the informed opinion of the authors that these are some of the things that
went into the couching of Article 1815 of the Constitution6, which makes it
mandatory that all loan agreements entered into by the Government of Ghana
must first of all be subjected to parliamentary approval by means of a resolution
supported by the votes of a majority of all 7 the Members of Parliament. This
provision goes on to stress that this condition would apply whether the
Government is seeking to raise the loan on behalf of itself or any other public
institution or authority. To make it even more interesting, the requirement of
Parliamentary consent was extended to cover international business or economic
transactions in which the Government is a party, in Article 181 (5), albeit
stipulating that Parliament would have to have made the necessary modifications
before hand.
5
(1) Parliament may, by a resolution supported by the votes of a majority of all the members of Parliament, authorize the
Government to enter into an agreement for the granting of a loan out of any public fund or public account.
(2) An agreement entered into under clause (1) of this article shall be laid before Parliament and shall not come into
operation unless it is approved by a resolution of Parliament.
(3) No loan shall be raised by the Government on behalf of itself or any other public institution or authority otherwise than
by or under the authority of an Act of Parliament.
(4) An Act of Parliament enacted in accordance with clause (3) of this article shall provide,
(a) that the terms and conditions of a loan shall be laid before Parliament and shall not come into operation unless
approved by a resolution of Parliament; and
(b) that any monies received in respect of that loan shall be paid into the Consolidated Fund and form part of that Fund, or
into some other public fund of Ghana either existing or created for the purposes of the loan.
(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.
(6) For the purposes of this article, “loan” includes any monies lent or given to or by the Government on condition of
return or repayment, and any other form of borrowing or lending in respect of which
(a) monies from the Consolidated Fund or any other public fund may be used for payment or repayment; or
(b) monies from any fund by whatever name called, established for the purposes of payment or repayment whether
directly or indirectly, may be used for payment or repayment.
(7) The Minister responsible for Finance shall, at such times as Parliament may determine, present to Parliament any
information concerning any discrepancies relating to
(a) the granting of loans, their repayment and servicing;
(b) the payment into the Consolidated Fund or other public fund of monies derived from loans raised on institutions
outside Ghana.
6
Constitution of the Republic of Ghana, 1992
7
Article 102 of the Constitution of the Republic of Ghana provides for the Quorum in Parliament and states that ‘A quorum
of Parliament, apart from the person presiding, shall be one-third of all the Members of Parliament. So in effect, we are
looking at a situation where two-thirds of at least one-thirds of all persons duly elected into Parliament consent by voting in
favor of that resolution.
3
Relying on Article 181 (5) of the Constitution, the Supreme Court of Ghana, in
deciding a line of cases with similar facts but at different times, appear to have
interpreted this legal provision in such as a manner as to suggest that it is capable
of a number of meanings. In particular, the phrase, ‘international business or
economic transactions’ has been given a number of meanings by the Supreme
Court, depending on the facts of a particular case.
This Paper therefore seeks to critically examine the decisions of the Supreme
Court with respect to its interpretation of Article 181 (5) of the Constitution, with a
view to ascertaining the wider implications of these decisions on the potentials
for securing future international financial or economic transactions for Ghana,
especially as the World bank and the IMF are in agreement that the economy
requires more borrowing to attain self reliance.
The Paper is structured into five parts as follows: Following this Introduction,
Section embarks on a historical journey to trace the Constitutional antecedents of
the controversial Article 181 (5) of the Constitution, while Section III looks at the
judicial interpretation of Article 181 (5) from 2005 to 2014. The ingredients in the
Supreme Court’s reasoning on these decisions are distilled in Section IV with a
view to determining whether there is any harmony, while Section V concludes the
study with some recommendations that the Author believes would not only
provide clarity, but ensure that Ghana is not disadvantaged by the application of
this Constitutional provision.
2. CONSTITUTIONAL HISTORY OF ARTICLE 181 (5) OF THE CONSTITUTION

Ghana stands tall as the first black African country to secure her independence
from colonial masters, having successfully extricated herself from British rule in
1957. Upon Independence, the 1957 Constitution 8 was more or less foisted on
Ghana, with majority of its input apparently coming from the erstwhile colonial
8
The document was referred to as The Ghana (Constitution) Order In Council and was laid before Parliament in the Court
at Buckingham Palace on February 22, 1957 in the presence of the Queen’s Most excellent in Council
4
masters. Admittedly, this document did not capture the true aspirations and
yearnings of the Ghanaian people, as evidenced by both its size and contents 9. It is
therefore not uncommon that this Constitution did not make any provisions
regarding loans/public loans by the President/Government of Ghana on behalf of
the Ghanaian people.
In 1960, Ghana became a Republic, and consequently, had its first ‘home made’
Constitution, which as much as practicable, took into account the aspirations and
yearnings of the Ghanaian people. This Constitution provided some ground rules
for Public Loans in Article 3510.
However, these ground rules, particularly from reading clauses (2) and (3)
together, seem not to be strict on the requirement of Parliamentary approval.
Clause (2) particularly seems to only request Parliamentary approval if the initial
loan amount is exceeded, while clause (3) gives the impression that Parliamentary
ratification is obtained only after the loan has been taken. In essence therefore,
although the 1960 Constitution of the Republic of Ghana provides for the
modalities regulating Public Loans, the plain reading of the texts of these
provisions are indicative of the fact that there are no strict requirements that
Parliament must ratify or authorize by means of a resolution before such
agreements are entered into by the President.
Notwithstanding the provisions on Public Loans in Article 35 of the 1960

Constitution, it stands to good reason that the true origin of the present day
article 181 of the 1992 Constitution of the Republic of Ghana is article 133 11 of the
9
The 1957 Constitution was a 39 paged document with only 91 articles
10
Article 35 (1) The President may, on behalf of the Republic, enter into an agreement for the granting of a loan out of any
public fund or public account if he thinks that it is expedient in the public interest to do so
Article 35 (2) if the National Assembly so resolve, agreements entered into under this article for amounts exceeding the
amount specified in the assembly’s resolution shall not become operative unless ratified by the National Assembly
Article 35 (3) As soon as practicable after an agreement has been entered into under this article, particulars of the
agreement, and of the borrower, and the purpose for which the loan is required, shall be laid before the national Assembly
11
Article 133 (1) The National Assembly may, by a resolution passed on that behalf and supported by the votes of majority
of all the members of the National Assembly, authorize the Government to enter into an agreement for the granting of a
5
1969 Constitution. The reasoning behind this assertion is that the requirement for
parliamentary authorization of such loan agreements, which, from the reading of
article 35 of the 1960 Constitution, seemed relaxed (and could even be secured
retrospectively), became quite evident in the 1969 Constitution, as no such loan
agreements would become operative without the prior authorization of
parliament. However, it bears emphasizing that article 133 of the 1969
Constitution limited itself only to providing the modalities for loans taken by the
Government in the interest of the people of Ghana, and made absolutely no
reference whatsoever to international business or economic transactions to
which the Government of Ghana is a party.
To fully appreciate the philosophy behind article 133 of the 1969 Constitution, the
authors invite you to a short journey with them to the Report of the
Constitutional Commission for a Constitution for Ghana (1958) 12. The relevant
paragraphs of the Report13 read thus:
589. One of the most revealing consequences of the coup d’état of the
24th February was the realization by the people of Ghana of the huge
debt which the country owed. Apart from the fact that our economy had
been made bankrupt we owed money well over N¢800,000,000. We need
not go into the details; we all know the various agreements which the
National Liberation Council has had to undertake in order to have
rescheduling of our external debts. This calls for specific provisions in the
Constitution to deal with the question of loans, and we propose that
Government should not enter into an agreement for the granting of a
loan out of any public fund or public account unless the National
loan out of the public fund or public account

Article 133 (2) An agreement entered into pursuant to the provision of the preceding clause shall be laid before the national
Assembly and shall not come into operation unless the same has been approved by a resolution of the National Assembly
Article 133 (3) No loan shall be raised by the Government on behalf of itself or any other public institution or authority
otherwise than by under the authority of an Act of Parliament
12
This Commission submitted Proposals to the Constituent Assembly which drew up the 1969 Constitution
13
At page 158
6
Assembly has approved, by the votes of not less than two-thirds of all the
members of the Assembly, the granting of the loan.
590. We further propose that the agreement entered into in respect of

the loan should be laid before the National Assembly and should not
become effective or operative unless it has been approved by an ordinary
resolution of the National Assembly in the case of a loan granted to an
authority in the country, but where the agreement is in respect of a loan
granted to an authority outside this country then the agreement should
only come into force after a resolution in favour of the granting of the
loan has been passed by the National Assembly, supported by the votes
of not less than two-thirds of all the members of the National Assembly.
591. We are strongly of the view that the above proposals relating to the
granting of loans should apply with equal force to the raising of loans.
The only addition we wish to make is that the Government should not
have power to raise a loan on behalf of itself or any public institution or
authority except by or under the authority of an Act of Parliament. That
Act of Parliament should incorporate our above proposals regarding
resolutions of the National Assembly mutatis mutandis.
A careful study of these paragraphs gives an indication that the impetus of the
framers of these provisions was to guard against a practice where transparency,
collaborative and cooperative management, as well as Parliamentary approval in
matters relating to the securing and implementation of debt obligations
contracted by the Government are not upheld.
7
The provisions in the 1969 Constitution were exported verbatim into the 1979
Constitution (article 14414), obviously for the same reasons as already discussed,
but expanded to include international business or economic transactions to which
the Government is a party, in the 1992 Constitution of the Republic of Ghana
(article 18115). The rationale for the expansion ((article 181(5) 16), in the opinion of
the authors17, is to cater for the triple requirements of transparency, collaborative
and cooperative management, as well as Parliamentary approval in agreements
that are classified as international business or economic transactions to which the
Government of Ghana is a party.
The implication of the foregoing is that agreements in the nature of an

international business or economic transactions are to be accorded the same
treatment as loan agreements, which is to say that all international business or
economic transactions to which the Government is a party shall, before it
becomes operative, be submitted to the Parliament of Ghana for authorization,
regardless of whether or not such transactions are financed by debt.
14
Article 144 (1) Parliament may, by a resolution passed in that behalf and supported by the votes of a majority of all
members of Parliament, authorize the Government to enter into an agreement for the granting of a loan out of any public
fund or public account
Article 144 (2) An agreement entered into pursuant to clause (1) of this article shall be laid before Parliament and shall not
come into operation unless the same has been approved by a resolution of Parliament
Article 144 (3) No loan shall be raised by the Government on behalf of itself and any other public institution or authority
otherwise than by or under the authority of an Act of Parliament
15
Article 181 (1) Parliament may, by a resolution passed in that behalf and supported by the votes of a majority of all
members of Parliament, authorize the Government to enter into an agreement for the granting of a loan out of any public
fund or public account
Article 181 (2) An agreement entered into pursuant to clause (1) of this article shall be laid before Parliament and shall not
come into operation unless the same has been approved by a resolution of Parliament
Article 181 (3) No loan shall be raised by the Government on behalf of itself and any other public institution or authority
otherwise than by or under the authority of an Act of Parliament
16
181 (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
17
The Report of the Committee of Experts (Constitution) on Proposals for a Draft Constitution of Ghana (1991), which
constituted the proposals out of which the 1992 Constitution emerged, does not provide any express comment on the
purpose of the expansion of ambit. The expansion is proposed, without explanation or comment, in clause 17(5) of
Appendix M to the Report. This Appendix deals with Economic and Financial Order. The proposal adds the following clause
to the original provision: "This article shall, with the necessary modifications, apply to an international business or
economic transaction to which the Government is a party as it applies to a loan."
8
In summary therefore, all but one (1957) of Ghana’s constitutions made provisions
for the modalities regulating (public) loans. However, only three of these
constitutions (1967, 1979 and 1992) expressly require Parliamentary authorization,
while only one of them (1992) extends the requirement to cover international
business or economic transactions. Table 2.1 below summarizes these provisions.
Table 2.1: Constitutional Provisions on (Public) Loan Requirements in Ghana
LOAN ON PARLIAMENTARY
YEAR ENTITY TAKING LOAN BEHALF AUTHORIZATION SCOPE
WHOM REQUIRED
1957 N/A N/A N/A N/A
No, except where
1960 President Republic amount exceeds
initial grant
Government Loans only
or any other
1969 Government public Yes
institution or
authority
Government Loans only
or any other
1979 Government public Yes
institution or
authority
Government Loans and
or any other international
1992 Government public Yes business or
institution or economic
authority transactions
3. JUDICIAL INTERPRETATION OF ARTICLE 181 (5): BALKANIZATION?
Between 2005 and 2014, the Supreme Court of Ghana have decided a number of
high profile cases based on the provisions in Article 181 (5) of the Constitution, and
in all of these cases, the decision has gone against parties that have executed
contracts for the Government from funds that were sourced as loans, either from
public funds or public accounts. We shall proceed with a review of all of these
cases, with a view to ascertaining whether the reasoning adduced by the Court for
its decision represent a balkanization of the provision.
9
In Faroe Atlantic Co. Ltd. v Attorney General 18 the Plaintiffs issued a Writ of
Summons against the Defendant in his capacity as the Chief Legal Advisor to the
Government of Ghana and the proper party to be sued in respect of the
Government or a Ministry thereof in accordance with Article 88 19 of the 1992
Constitution. This was pursuant to an agreement entered into between the
Government of Ghana and the Plaintiff-Company for the purchase of electricity in
a Power Purchase Agreement, wherein the defendant company alleged that the
Government had breached the agreement. The reliefs sought were: (i) Specific
performance of an agreement in writing dated the 24th day of April 1998,
described as the Power Purchase Agreement made between the Government of
Ghana, acting by and through the Ministry of Mines and Energy for the purchase
of electric power by the Government of Ghana from the Plaintiffs, as amended by
exchange of letters dated 15th and 16th days of June 1998; and (ii) And or in the
alternative, damages for breach of the Power Purchase Agreement ("P.P.A").
In refusing the reliefs, the court found that the entire transaction fell within the
category of international business under article 181(5) of the 1992 Constitution,
and ought to have been laid before Parliament for approval before execution,
failing which made the entire transaction offensive to the Constitution, and
therefore null and void. In arriving at the decision, the main consideration by the
court was on the nationality of the company, and, in the words of Dr. Date-Bah
(JSC), “…the Power Purchase Agreement was clearly an international business
transaction and therefore needed to comply with the obligations imposed in
relation to it by article 181(5). The Plaintiff is described in its Statement of Claim as a
18
[2005-2006] SCGLR
19
(1) There shall be an Attorney-General of Ghana who shall be a Minister of State and the principal legal adviser to the
Government.
(2) The Attorney-General shall discharge such other duties of a legal nature as may be referred or assigned to him by the
President, or imposed on him by this Constitution or any other law.
(3) The Attorney General shall be responsible for the initiation and conduct of all prosecutions of criminal offences.
(4) All offences prosecuted in the name of the Republic of Ghana shall be at the suit of the Attorney General or any other
person authorised by him in accordance with any law.
(5) The Attorney General shall be responsible for the institution and conduct of all civil cases on behalf of the State; and all
civil proceedings against the State shall be instituted against the Attorney General as defendant.
(6) The Attorney General shall have audience in all courts in Ghana.
10
limited liability company incorporated in the United Kingdom and carry on business
as suppliers or sellers of electrical power or energy and other goods and services."
The agreement of this United Kingdom Company to generate and supply electricity
to the Government of Ghana in Ghana was clearly a transnational transaction that
qualifies for characterization as an international business transaction to which the
Government of Ghana is a party, within the meaning of article 181(5)”.
It is instructive to note that this judgment was given by the Court in spite of the
fact that it found the Government of Ghana guilty of breach of contract. Dr. Date-
Bah captured it in these words, “…For, while I accept that the Defendant has been
finally adjudged to be in breach of the Power Purchase Agreement, I believe that it is
still open to this Court to hold, in the light of its overriding obligation to uphold the
Constitution of this land, that the Agreement was concluded without complying
with a mandatory prescription of the Constitution and is accordingly not binding on
the Republic”.
The summarized facts of the case in Attorney General v Balkan Energy Ghana Ltd
& 2 Ors20 were that the third defendant, Mr. Phillip David Elders, a businessman
resident in Texas, USA, identified a business opportunity in Ghana and persuaded
the owner of the second defendant to invest in it. The business opportunity was
for the urgent generation of electricity by the Government of Ghana from a
power barge located in its Western Region. The barge needed rehabilitation and
the Government wanted to negotiate with a private investor to achieve this and
bring its generating capacity urgently on stream. In order to achieve this, the
Government of Ghana signed a Memorandum of Understanding With Balkan
Energy LLC. Acting on the advice that was given to the third defendant relating to
the statutory licensing requirements in Ghana for power generation, the investors
in the business opportunity decided to incorporate the first defendant in Ghana
and to make it the party to a Power Purchase Agreement.
20
[2012] SCGLR
11
Accordingly, on 27th July 2007, Balkan Energy (Ghana) Limited, the first
defendant, which had been incorporated in Ghana 11 days previously, entered into
a Power Purchase Agreement ("PPA") with the Government of Ghana.
Subsequently, a dispute arose between the parties to this PPA.
The dispute led to the first defendant initiating, by a Notice of Arbitration dated
23rd December 2010, arbitration proceedings against the Government of Ghana
under the auspices of the Permanent Court of Arbitration at the Hague, the
Netherlands. At these proceedings, the Ghana Government raised the point that
the PPA needed Parliamentary approval under article 181(5) of the 1992
Constitution, but that this approval had not been sought and therefore the PPA
was invalid, as having been executed in breach of a constitutional provision. The
Government of Ghana argued before the arbitration tribunal that non-compliance
with the constitutional provision made the PPA invalid, including its arbitration
clause, and consequently the arbitral tribunal had no jurisdiction over the dispute
before it. However, the arbitral tribunal held that it had jurisdiction, but
expressed a willingness to take account of this Court’s interpretation of the
constitutional provision in question.
The key question before the Supreme Courts was therefore Whether or not the
Power Purchase Agreement between the Government of Ghana and Balkan
Energy (Ghana) Limited constitutes an international business transaction within
the meaning of Article 181(5) of the Constitution. In formulating a test to
determine what transactions come within the ambit of article 181(5) of the 1992
12
Constitution, the Court relied on a combination of the nature 21 of the business or

economic transaction criterion and the parties 22 criterion.
Delivering the lead judgment, Dr. Date-Bah had this to say: ‘…The phrase
international business or economic transaction to which the Government is a party,
if purposively construed, should not lead necessarily to the result that only
agreements between entities resident abroad and the Ghana Government can be
embraced within the meaning of the term. Given the complexity of contemporary
international business transactions, there will be transactions of such a clear
international nature that they should come within any reasonable definition of an
international business transaction, but which may have been concluded with the
Ghana Government by an entity resident in Ghana. In such a situation, our view is
that the substance, rather than the form, should prevail’.
The Court further held that the condition for a business or economic transaction
to be termed international within the context of article 181(5) would be satisfied
whenever the nature of the business has a significant foreign element or where
the parties to the transaction (other than the Government) have a foreign
nationality or reside in different countries or, in the case of companies, the place
of their central management and control is outside Ghana. In do defining, the
Court made the further point that the purposive interpretation of the phrase,
‘international business or economic transaction’ would only apply to major
transactions involving the Government of Ghana. This was done to ally the fear
21
Refers to the practice in the field of international arbitration by which the nature of the dispute between the parties has
been used to decide whether the mechanism for its resolution can be described as an international arbitration. The
International Chamber of Commerce (ICC) adopted the nature of the dispute as its criterion for deciding whether or not a
commercial arbitration was an international arbitration under its rules. This criterion defines international arbitration to
encompass disputes which contain a foreign element, even if the parties are citizens of the same country. The rules allow
for a broad interpretation to the term "international" so as to encompass arbitrations involving any foreign element. If, for
example, the subsidiary of a foreign company doing business in a state was incorporated in that state (as would often be
the case) any arbitration between the company and the state concerned would be classified as international under the ICC
Rules.
22
The European Convention on International Commercial Arbitration of 1961, states its scope as follows (in Article I):
"This Convention shall apply:
(a) To arbitration agreements concluded for the purpose of settling disputes arising from international trade between
physical or legal persons having, when concluding the agreement, their habitual place of residence or their seat in different
Contracting States;
(b) To arbitral procedures and awards based on agreements referred to in 1(a) above.”
13
that every single transaction to which the Government is a party, and that has any
foreign elements, could be construed as an international business or economic
transaction, and therefore brought within the ambit of article 181(5).
The authors would be guilty of an injustice to the Supreme Court if they do not
make the point that the salient terms of the subject matter Power Purchase
Agreement were on the face of it, indicative of an international business
transaction. The transaction involved an investment by an investor of United
States origin, to generate and supply electric power to the Government of Ghana.
Also, the first defendant, though a Ghanaian Company is wholly owned by a
foreign entity, incorporated in the United Kingdom. Next, the Managing Director
of the first defendant is a foreigner, and the control of the management of the
first defendant is in foreign hands. Additionally, the Agreement contained a
clause providing for international commercial arbitration, as well as other clauses
that are typically associated with foreign investment transactions, such as the
waiver of sovereign immunity clause and others23
In Klomega v Attorney General & 3 Ors.,24 the 2nd defendant (Ghana Ports &
Harbour Authority) entered into a concession agreement between the 3 rd and 4th
defendants. Before that, there had been a shareholders agreement, which
effectively made the 2nd and 3rd defendants the exclusive shareholders in the 4 th
defendants. Thereafter, the 2nd defendant granted a concession to the 4 th
defendants, to, amongst other things, design, construct, repair and manage the
23
GOG represents and warrants that:
No Taxes. There is no Tax other than stamp duty at a nominal rate imposed on or in connection with: the execution,
delivery or performance of this Agreement; the enforcement of any of this Agreement; or on any payment to be made to
the BEC under this Agreement. In connection with Letters of Credit, no Government Authority shall impose any reserve,
special deposit, deposit insurance or assessment affecting BEC.
No Foreign Exchange Controls. There are no foreign exchange or other restrictions in effect in the Republic of Ghana
adversely affecting the ability or right of Government of Ghana to acquire and to remit to BEC foreign currency to pay and
satisfy Government of Ghana’s obligations under this agreement."
24
[2012] SCGLR
14
container terminal at Tema Ports for a period of twenty years. The main question
before the Court was whether and to what extent Government under article 181
(3) includes public authorities like the Ghana Ports and Harbours Authority, the
cost of whose operations and debt obligations constitute a charge on the public
accounts of Ghana;
Interestingly, after considering the arguments adduced by the parties, the Court,
per Dr. Date-Bah (JSC) came to the conclusion that the second defendant
Statutory Corporation did not fall within the meaning of “Government”. To quote
Dr. Date-Bah (JSC), ‘In our view, Government” in the context of article 181(5) should
mean, ordinarily, the central government and not operationally autonomous
agencies of government. Where an agency has a separate legal personality distinct
from the central government, it usually comes under Sectorial Ministerial
supervision. The Board of the corporation and the appropriate Ministry should then
exercise oversight over its international business or economic agreements. That
oversight should be exercised within the context of the procurement laws of this
country. Parliament would be sucked into unnecessary minutiae if it were to have
the function of approving the international business or economic agreements of
statutory corporations. That is why “Government”, in the context of article 181(5),
should be interpreted purposively to exclude corporations such as the 2nd
defendant. This interpretation is the only reasonable one, if one reads the
Constitution as an organic whole’.
In Martin Amidu v Attorney General, Isofoton & Forson 25, where, after Parliament
has approved a 65 million euro loan agreement between the Government of
Ghana and the Republic of Spain for the implementation of various development
projects, two other agreements were executed between the two Spanish
companies and the Ministry of Food and Agriculture and the Ministry of Energy
respectively, the Plaintiff contended that securing approval for the loan did not
25
[2013] SCGLR
15
absolve the Government from securing Parliamentary approval for the projects
through which the loan agreement would be implemented, since those specific
agreements, in the contemplation of the Plaintiff, were international businesses
within the meaning of international business or economic transactions under
article 181(5) of the 1992 Constitution.
After the conclusion of the said two agreements, the Government of Ghana,
through the Office of the President, approved the execution, by a different
company of a Solar Rural Electrification Project and also the execution by another
company of an Irrigation Equipment (Solar power pumps, Sprinkler Irrigation
equipment project. The approval of these projects was incompatible with the
rights of the 2nd defendant, as he perceived them. The 1st defendant admits that
the action by the Office of the President amounted to re-awarding the contracts
that the 2nd defendant considered it had concluded. The 2nd defendant,
accordingly, gave a power of attorney to the 3rd defendant to sue the
Government of Ghana to enforce its contract rights.
After carefully examining the arguments of all the parties, the Supreme Court held
that the factors that Parliament needs to take into account in approving a project
loan agreement will not necessarily be the same as those applicable to what the
2nd Defendant calls a project implementation agreement. The Court went further
to give the following illustration in support of its holding. ‘A ready illustration of
the issue under discussion is provided by taking judicial notice of the widespread
media reports that the Government of Ghana signed in 2012 a 3 billion US dollar loan
agreement with the Chinese Development Bank. It was signed after due approval of
it by Parliament. The loan is meant to finance several different projects. Surely it is
not reasonable to infer from the fact of approval of the loan agreement that
Parliament has also approved the details of the range of different project
agreements that had not yet been worked out as of the date of the approval of the
loan’. The Court then concluded by stating emphatically that a precise distinction
16
needed to be made between the loan agreement and the agreements of projects
to be financed by the loan, as the terms and issues in these kinds of agreements
are not identical and therefore deserve separate scrutiny and approval.
In the 2013 decision in the case of Martin Amidu v Attorney General & 2 Ors. 26, the
government contracted with Vamed to rehabilitate some of the stadia that would
host the Cup of African Nations tournament in 2008. Vamed thereafter
transferred its rights and obligations under the contract to the second
defendants. However, after the second defendants had commenced work, the
government abrogated the contract, but agreed to pay the amount expended on
the project by the second defendants. The Plaintiff’s case was two-fold:
1. A declaration that the Agreement entitled Contract for the Rehabilitation
(Design, Construction, Fixtures, Fittings and Equipment) of a 40,000 seating
Capacity Baba Yara Sports Stadium in Kumasi, Ghana entered into between the
Republic of Ghana and Waterville Holdings (BVI) Limited of P. O. Box 3444 Road
Town Tortola, British Virgin Islands is an international business or economic
transaction under Article 181 (5) of the 1992 Constitution that could only have
become operative and binding on the Government of Ghana after being laid
before and approved by Parliament;
2. A declaration that the Agreement entitled Contract for the Rehabilitation
(Design, Construction, Fixtures, Fittings and Equipment) of a 40,000 Seating
Capacity Ohene Djan Sports Stadium and the Upgrading of the El Wak Stadium in
Accra, Ghana entered into between the Republic of Ghana and Waterville
Holdings (BVI) Limited of P. O. Box 3444 Road Town, Tortola, British Virgin Islands
is an international business or economic transaction under Article 181 (5) of the
1992 Constitution that could only have become operative and binding on the
Government of Ghana after being laid before and approved by Parliament.
26
Martin Alimisi Amidu v The Attorney General, Waterville Holdings (BVI) Ltd., and Alfred Agbesi Woyome [2013] SCGLR
(Review Decision in 2014)
17
Like the Balkan Energy case, the Court looked to the nationality and domicile of
the companies implementing the contract, their shareholders in determining that
the transactions were indeed in the character of international business and
economic transactions as anticipated by article 181(5), and having not be laid
before and authorized by Parliament before execution, was an illegality, null and
void and of no consequence. These same principles, in addition to the currency
that the entire transactions were denominated in, also formed the basis of the
Court’s review decision of the same case a year later in 2014.
The fallout from the decisions in the above is that depending on the facts of the
case, factors like the nationality of the contracting firm, the nationality and
domicile of its directors, the management and control of locally incorporated
firms, the extent of the foreign element in the transaction, and the distinctiveness
between the terms of the loan and the terms of the projects wherein the
proceeds of the loan are deployed, would determine whether or not the
transaction falls within the context of international business or economic
transactions as envisaged by article 181(5).
The logical question therefore is whether or not these factors are significantly
different as to amount to a balkanization of the true and proper meaning of article
181 (5) of the Constitution. The authors are of the view that to the extent that that
the chances of cases to which a particular constitutional or statutory provision is
applied having dissimilar facts are a high likelihood, leading inevitably to each
being turned on a different fact, and by extension, point of law, it would appear
that the application of the purposive approach to the interpretation of the
provisions of article 181 (5) does not quite amount to a balkanization of the
meaning of that provision.
The assertion is given further credence by the reluctance of the Supreme Court in
the Klomega case to rule that all statutory corporations can be construed as
Government within the context of article 181 (3), notwithstanding the following:
18
the State may acquire property for such statutory corporations under the State
Property and Contracts Act, 1960 (C.A. 6) and the State Lands Act, 1962 (Act 125);
its Director-General and members of its Board of Directors are appointed by the
President of Ghana, in accordance with articles 70 and 195 respectively of the 1992
Constitution and are thus public servants; is required to obey directions of a
general nature issued by the President of Ghana; part of its funding comes from
budget allocations and loans from the Government of Ghana; its accounts are
audited by the Auditor-General of Ghana and a copy of its annual report on its
operations is laid before the Parliament of Ghana.
4. DISTILLING THE INGREDIENTS: HARMONY OR CACOPHONY

The ingredients upon which the Court’s decisions were based in the line of cases
analyzed can be grouped into: the Nationality of the contracting firm/place of
incorporation, the Nationality and Domicile of its directors, the Control and
Management of locally incorporated contracting firms, the Extent of the Foreign
element in the transaction, the nature of the clauses included in the agreement,
the currency in which the transactions are denominated, as well as the need to
distinguish between securing Parliamentary approval for a loan and securing
Parliamentary approval for the projects wherein the proceeds of the loan would
be deployed
19

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BALKANIZATION OF AMIDU: AN ANALYSIS OF THE JURISPRUDENCE OF THE SUPREME

COURT ON THE REQUIREMENT OF PARLIAMENTARY RATIFICATION OF INTERNATIONAL

Clement Kojo Akapame

2. CONSTITUTIONAL HISTORY OF ARTICLE 181 (5) OF THE CONSTITUTION

Notwithstanding the provisions on Public Loans in Article 35 of the 1960

loan out of the public fund or public account

590. We further propose that the agreement entered into in respect of

The implication of the foregoing is that agreements in the nature of an

3. JUDICIAL INTERPRETATION OF ARTICLE 181 (5): BALKANIZATION?

Constitution, the Court relied on a combination of the nature 21 of the business or

4. DISTILLING THE INGREDIENTS: HARMONY OR CACOPHONY

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