General News of 2014-03-20

Judgment debt: Isofoton case thrown out

An Accra Fast Track High Court has dismissed an application for stay of exercise of summons for Isofoton S. A. to refund part of a judgment debt wrongly paid to it by the government.

The dismissal of the application paves the way for the State to retrieve $325,472 from the Spanish company.

Isofoton S. A. had filed a motion praying the court, presided over by Justice K. A. Ofori-Atta, to set aside a writ of summons and statement of claim against the company by the Attorney- General (A-G) for the company to refund the cedi equivalent of $325,472 to the State.

Among the reliefs it sought, the company claimed that the court lacked the jurisdiction to ascertain the writ of the plaintiff, and that the plaintiff’s suit was wrongly filed indicating an abuse of the process of court.

But the court dismissing the application on Tuesday, reasoned that the plaintiff’s writ was proper indicating that the writ of summons was a way to retrieve the funds from the defendant.

The case will now travel its natural course, and the counsel for Isofoton S.A. represented in Ghana by Mr. Anane-Agyei Forson, has seven days to file its defence. In the Plaintiff’s claim, the A-G is seeking a refund of $325,472 to the State. The money was the first instalment of a wrong $ 1.3 million judgment debt the company was demanding from the State. The A-G is also seeking interest accrued on the amount and cost.

On June 21,2013, the Supreme Court directed the company to refund all moneys it had so far received from the government on the grounds that the agreements resulting in the payments were unconstitutional, and therefore, null and void.

The Supreme Court’s decision followed an application by a former Attorney-General and Minister of Justice, Mr Martin Amidu, who argued that the payment of the judgement debt done in March 2011, was wrong because the company had no basis to make the claims against the government since it had no contract with the government of Ghana which had been breached.

Following the court’s judgment, the Attorney-General, on August 22,2013, filed a writ of summons and statement of claim in a bid to retrieve all moneys wrongly paid to the company. But three months after the A-G had filed the suit, court bailiffs were unsuccessful in serving court documents on Isofoton S. A, thereby prompting the Attorney-General to resort to substituted service.

The Fast Track High Court, granted the request for substituted service and ordered that the writ of summons and statement of claim filed on August 22,2013 together with the court’s order, should be served on Isofoton per its lawyer. The court had in its unanimous decision on June 21, 2013 directed that the refunds be made with interest until the date of final judgment Isofoton S.A., which is involved in designing, manufacturing and supplying of solar energy products, was expected to engage on a project for agricultural irrigation and rural electrification based on solar technologies in 2006, but the then government is said to have abrogated the contract and re-awarded it to another Spanish firm.

The company was demanding judgment debt of $ 1.3 million for which the government had started paying in instalments, but the Supreme Court on February 8, 2013 put a hold on further payment of money to Isofoton S. A., until the final determination of the suit brought against it by Mr Amidu.

In its judgment, the Supreme Court held that the lower court hearing an action instituted against the government by Isofoton S.A. on the abrogation of the contract, had no locus to continue hearing the case because the court was of the view that it (lower court) did not have jurisdiction.

The Supreme Court’s June 21,2013 decision on Isofoton rendered the company’s action against the government at the lower court mute.

Source: The Ghanaian Times
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