Ghana prevails in $4 billion GCNet arbitration case, $2.2 million in costs awarded

An international arbitration tribunal seated in London has ruled decisively in favour of the Republic of Ghana, dismissing claims brought by Ghana Community Network Services Ltd. (GCNet) in a protracted dispute over the termination of a service agreement. The ruling, issued on November 18, 2024, marks a significant legal and financial victory for Ghana.

Background of the Dispute

The dispute arose from Ghana’s termination of a service agreement with GCNet, which had been in place since 2002. Under the agreement, GCNet was tasked with operating an electronic customs and trade documentation system at Ghanaian ports. The agreement, initially for 10 years, underwent multiple extensions under the previous administration, some of which were found to lack statutory approval from the Public Procurement Authority.

In 2020, the current administration terminated the agreement following a value-for-money assessment, offering GCNet compensation as stipulated in the contract. GCNet, however, rejected the offer and sought damages totalling GHC 3.3 billion, alleging wrongful termination and breaches related to government policies on import exemptions and discounts.

Tribunal’s Findings

After reviewing submissions and conducting a week-long oral hearing in April 2024, the tribunal concluded that Ghana’s termination of the agreement was lawful. It upheld Ghana’s position that GCNet was entitled only to the compensation specified in the contract, amounting to $5.4 million, rather than the billions sought by the company.

The tribunal further determined that GCNet had waived its right to seek damages related to government policies on import exemptions and discounts, finding no breach of the service agreement.

Cost Recovery for Ghana

The tribunal declared GCNet the unsuccessful party and ordered it to pay Ghana $2,185,983.21 in legal fees. This sum includes $1,744,050.42 for legal representation and $441,932.79 for expert witness fees, with interest accruing at the rate of USD SOFR + 1% until payment.

Significantly, Ghana’s legal defence was managed entirely by the Office of the Attorney General, led by Godfred Yeboah Dame, without the use of foreign counsel. This approach saved the country millions of dollars in legal expenses.

The ruling has saved Ghana billions of cedis while reinforcing accountability in public-private agreements.