Court of Appeal upholds BoG application to refer Nduom’s case to arbitration

The Appeal Court on the 2nd of June 2022, by a unanimous decision, upheld the Bank of Ghana's application that the challenge by Dr Papa Kwesi Nduom and others against the Bank of Ghana's revocation of the license of GN Bank be referred to Arbitration.

"The Court held that per section 141 of Act 930, the forum for such a challenge is arbitration and not the court. The Court held further that Dr. Nduom and the other applicants had masqueraded their challenge to the decision of the Bank of Ghana as a human rights application.

The Court, therefore, stayed the proceedings at the High Court and referred the matter to the Ghana Arbitration Centre.”

The Court of Appeal panel of 3 Judges was led by Justice Henry Coffie, and comprising of Justice Eric Baah and Justice Novisi Ayine as members of the panel.

Prior to this development, the Court of Appeal of Ghana denied the Bank of Ghana’s attempt to prevent the High Court from ruling on its case against the GN Savings & Loans.

By this ruling of the Court of Appeal which was made on January 18, 2022, the High Court can now deliver its final judgment on Dr Papa Kwesi Nduom’s suit challenging the decision of the Bank of Ghana (BoG) to revoke the operating license of GN Savings & Loans Company Limited.

An earlier statement sighted by GhanaWeb indicated that the High Court was supposed to deliver the final judgement on the suit filed by Dr Nduom and two other shareholders of GN Savings and Loans on December 9, 2020.

The High Court judge for the case, Justice Gifty Adjei-Addo directed BoG to file a defence an objection the central bank raised that the High Court had no jurisdiction to hear the case.

However, a few days before the judgment, rather than filing the defence, BoG applied to the Court of Appeal for a stay of the High Court’s proceedings in order to stop the high court from ruling on the matter.

On August 16, 2019, the Bank of Ghana in a notice announced the revocation of the licence of GN Savings and 22 other savings and loans companies and finance house companies for various reasons.

In the case of GN Savings, the Bank of Ghana said “GN is currently insolvent under Section 123(4) of the Banks and SDIs Act, 2016 (Act 930).”

The Central Bank thereby appointed Eric Nana Nipah, a Partner at Pricewaterhouse Coopers Ghana, as Receiver to see to the liquidation of the companies.

However, on August 30, 2019, Dr. Papa Kwesi Nduom and the other shareholders of GN Savings, through their lawyers, Archbridge Solicitors, filed an application at the High Court to challenge the revocation of GN Savings' licence.

The lawyers rejected the Bank of Ghana's claim that GN was insolvent stating that the revocation was "malicious".

According to the lawyers, the BoG failed to consider the entire portfolio of GN Savings' assets deliberately before coming to the conclusion that GN Savings was insolvent.

They prayed the Court to, among other things, quash the decision of the Bank of Ghana and to restore GN Savings' licence.