Monday, January 24

Ghana Wins Norway Chancery Case

The Oslo District Court presided over by Justice Dagfinn Gronvik, has dismissed an action instituted by Messrs. Jongsbru AS, the sellers of a property identified by the Republic of Ghana for use as a Chancery in Oslo, Norway in 2018.

The court in a judgment on Friday, December 16, 2021, held that none of Ghana’s representatives in the transaction as well as Ghana’s lawyer at the time of the transaction, had authority to conclude a binding agreement between Ghana and the sellers, and therefore “Ghana will be acquitted of the lawsuit by Jongsbru AS.”

The court consequently, awarded procedural costs in the sum of one million, seven hundred Norwegian Kronner in favour of the Government of Ghana to be paid by Jongsbru.

Case Facts

In 2018, Ghana decided to establish an embassy in Oslo, Norway, and Parliament approved the grant of funds for the establishment of the embassy as well as other missions around the world by the government.

A delegation of four Ghanaian officials was appointed to travel to Norway and carry out the necessary practical and administrative preparations for the establishment of the embassy. Among the preparations to be made was the acquisition of a Chancery Building, either by purchase or by a lease. The Ghana Embassy in Oslo was officially established on November 21, 2018 in temporary premises.

The Ghanaian delegation identified a number of properties, including Sigyns Gate 3 at Frogner in Oslo, the property which is the subject matter of the litigation in the District Court of Norway and for legal assistance, Ghana hired a lawyer, Mikkel Vislie, from the Law Firm of Selmer.

On November 22, 2018, Ghana received an offer from Jongsbru to buy the property for 100 million Norwegian Kronner.

The offer had a deadline of seven days, i.e. by November 29, 2018. On November 29, 2018, Ghana’s Charge d’Affaires, Regina Appiah-Sam, responded to Jongsbru’s offer in certain terms.

Appointed Valuers

Subsequent to due certification by Ghana’s appointed valuers that the building was without significant defects and that the renovation works on same had been completed and performed in a satisfactory manner, Ghana pulled out of the transaction.

Jongsbru AS, sued the Government of Ghana in the Oslo District Court claiming sums totalling about seventy-eight million Norwegian Kroner for breach of contract, loss of profits, interest and costs of litigation.

Plaintiff’s Case

The case of the vendors, Jongsbru AS was that, under Norwegian law, a legally binding agreement had been entered into with Ghana and in the view of the plaintiff, the question as to whether a valid contract existed between the parties was to be decided according to Norwegian law.

None of the conditions to which Ghana subjected her acceptance constituted sufficient reservations according to Norway law, the plaintiff pushed.

They insisted that no condition had been placed by Ghana to defeat the binding effect of the contract between the parties.

Jongsbru said it had suffered financial loss from the difference between the agreed purchase price with Ghana and the price at which the property was eventually sold and also averred that there were additional expenses that they were compelled to incur, were it not for the agreement with Ghana.

Fighting Back

The Government of Ghana denied all of Jongsbru’s claims and contended that a final and binding agreement had not been entered into between the parties at the time of Ghana’s withdrawal from the transaction.

Further, none of the parties who dealt with Jongsbru on their own had capacity to convey an acceptance of the contract, according to Ghanaian law, and therefore, any purported acceptance was null and void.

Ghana submitted that the question of which persons could bind Ghana to financial contracts could only be decided based on Ghana law, as a sovereign state with laws regulating various aspects of its operations as a state.

Under Ghana’s State Property and Contract Acts of 1960, the minister responsible for a particular subject matter is the only one vested with responsibility for concluding binding agreements regarding the purchase of property.

That minister, in the case in issue, was the Minister for Foreign Affairs. Her approval had never been given for the conclusion of the transaction.

Ghana further asserted that there are mandatory statutory stipulations to be complied with under the procurement laws of Ghana which were lacking in the alleged purchase of the property in question and failure to comply with such procedures rendered the transaction unenforceable under Ghana law.

Further, Ghana submitted that, in any event, the acceptance of Jongsbru’s offer was made subject to conditions. The terms of Ghana’s purported acceptance clearly showed that there was no valid and binding offer. Jongsbru had also failed to prove any financial loss incurred by them as a result of Ghana’s alleged acceptance.

Former lawyer

Ghana claimed that, assuming the Oslo District Court were to find an agreement as having been validly concluded by the parties, then Ghana’s former lawyer, Mikkel Vislie should be held responsible and ordered to reimburse Ghana for any losses incurred by her.

Ghana contended that the lawyer had either misunderstood his mandate or failed to formulate the reservations in a sufficiently clear and precise manner so that a binding agreement was not reached with Jongsbru until the relevant requirements of Ghana law had been satisfied.

The lawyer did not carry out the relevant enquiries in compliance with the domestic laws of Ghana before the transaction was concluded and he conveyed acceptance when same was not required to be made.

The plaintiff, Jongsbru, also made similar requests for reliefs against the lawyer, Mikkel Vislie, if the court were to rule in favour of Ghana.

Mediation & Trial

A mediation process to resolve the dispute held in Oslo and presided over by a panel of three judges of the District Court, Oslo, on September, 2021, failed to reach a settlement as the Ghanaian team led by Attorney General, Godfred Yeboah Dame, did not accept the amount of about 30 million Norwegian Kronner proposed by Jongsbru as acceptable for a settlement of the dispute.

This forced the matter to proceed to trial at which Ghana called four witnesses made up of Ghana’s Ambassador to Norway, Jennifer Lartey, the Charge d’Affaires at the time of the transaction, Regina Appiah-Sam, the Deputy Head of Mission in Norway, Charles Marfo and the Director of Legal Directorate at the Ministry of Finance, Mrs. Mangowa Ghanney.

Final Verdict

On December 16, 2021, the Oslo District Court concluded that on the issue of choice of law, the competence or legal capacity of Ghanaian officials to bind the Republic of Ghana must be decided according to Ghana law.

The court said no attempt was made by the plaintiff to rebut evidence by the Director of the Legal Directorate of the Ministry of Finance to prove the content of Ghana’s financial and procurement laws.

The court found that the binding competence lies with Ghana’s Minister for Foreign Affairs, in accordance with section 20 of the State Property and Contracts Act of 1960.

The court further held that until there was approval from the Public Procurement Board of Ghana, no power of attorney could be granted by the Minister for Foreign Affairs for an agreement to be entered into and the Minister for Finance also cannot agree for funds to be utilised for the purchase.

In the circumstances, Ghana will be fully cleared of any liability to Jongsbru arising from the transaction and awarded procedural costs of one million, seven hundred Norwegian Kronner.

Lawyer’s Case

On the claim against Ghana’s lawyer, Mikkel Vislie by Jongsbru, the court found that the lawyer was fully responsible for the positive contractual interest in accordance with the Contracts Act of Norway.
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