A tribunal established under the auspices of the London International Court of Arbitration (LCIA) has dismissed a case brought forward by Sibton Switch Systems Limited (“Sibton Switch”) — a fintech engaged in interoperability operations in Ghana — in relation to the Bank of Ghana’s termination of a Master Agreement for the Ghana Retail Payment Systems Infrastructure in 2017.
The Tribunal also ordered Sibton Switch to pay the Bank a significant sum to cover the Bank’s legal fees and arbitration costs.
Here Is What You Need To Know
- Sibton Switch filed a Request for Arbitration with the LCIA on April 9th, 2018 against the Bank of Ghana for breaking the Master Agreement for the Ghana Retail Payment Systems Infrastructure that the two parties had entered into. Following the 2016 elections and the appointment of a new Bank of Ghana management team, it became necessary to revisit the conditions of the previous administration’s contract. After studying the contract, the Bank’s new management came to the conclusion that Sibton had not obtained the license nor met the condition precedent for the parties’ rights and obligations to be effective.
- The agreement, which granted Sibton Switch the rights to create, operate, and own the Ghana Retail Payment Systems Infrastructure, was thus dissolved on the grounds that it was never implemented.
- Sibton Switch, the claimant, went to the LCIA demanding USD 478 million in relief from the respondent, Bank of Ghana.
- According to the Bank of Ghana, the contract given to Sibton Switch was lopsided in favor of Sibton Switch and significantly harmed the bank’s interests.
- For example, the bank asserted that the project’s authorisation from the Public Procurement Authority stipulated that the Bank of Ghana’s maximum liability would be GH300,000. The Bank of Ghana faced a substantial potential liability of USD $478 million (GH2.6 billion) under the corruptly procured contract with Sibton Switch, despite this authorisation, the bank noted.
- Again, it was alleged that Sibton Switch’s tender price was more than 33 times higher than the second most costly bid.
- According to the Bank of Ghana, after the contract with Sibton Switch was terminated in 2017, the Bank of Ghana’s subsidiary, GhIPSS, was able to achieve mobile payment system interoperability at a fraction of the cost, saving Ghanaian taxpayers billions of Cedis.
Arbitration Award Issued In Favour Of The Bank Of Ghana
In the LCIA arbitration, a panel of three eminent arbitrators ruled in favor of the Bank of Ghana, dismissing all of Sibton Switch Systems Limited’s claims.
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However, it is noteworthy that the claims were dismissed merely because Sibton Switch Systems Limited failed to comply with the Tribunal’s instructions, including a previous interim judgment made in favor of the Bank of Ghana on June 25, 2019, which compelled Sibton Switch to pay an interim award payment for security of costs.
In addition, the final judgment directed Sibton Switch Systems Limited to reimburse the Bank of Ghana in full for its arbitration costs, as well as the Bank of Ghana’s legal expenditures.
Dr. Ernest Addison, the Bank’s current Governor, expressed his delight with the Bank’s favorable conclusion in these proceedings, as well as the billions of Ghana Cedis saved by the Ghanaian taxpayer as a result.
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