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Friday, February 24, 2012

Ace Ankomah Explains Why Woyome-saga Stinks

Betty Woyome
A ‘facebooker’ recently asked ace lawyer, Ace Ankomah to throw light on the Woyome saga. |Below is a reproduction of his response.

Around 2005, the government engaged an Austrian company called Vamed to undertake some construction works in Ghana. But it turned out that they were really talking at cross purposes.

While the government was talking about building stadia, Vamed was only interested in building hospitals.

Vamed lost interest in the deal and therefore purported to assign its "rights and obligations" to another company called Waterville.

Woyome claims that he led a consortium of Vamed, Waterville and M. Power Pak to win a bid to construct five new stadia and rehabilitate three others.

However note the following:

1. Vamed left the scene;

2. The actual contract was between Ghana and Waterville alone, no Woyome, no M. Power Pak;

3. The contract I have seen was limited to the rehabilitation of Accra, Kumasi and El-Wak stadia, nothing about building five new stadia.

Let's pause and do a little law here.

Section 20 of the State Property and Contracts Act limits the "power to contract" on behalf of the state to the relevant sector minister or a person duly authorised by him.

Thus, unless a person can produce any such contract, the person has absolutely no contractual relationship with the state.

There is nothing to enforce if you don't have a contract. You might have heard Woyome admit many times on air that he did not have a contract with the government. That is true. We will return to this later.

The contract with Waterville was signed on behalf of the state by Osafo-Maafo, former Minister of Youth and Sports and witnessed by a Principal State Attorney, and Mr Kwaku Agyeman-Manu, the then Deputy Minister of Finance and witnessed by the Legal Director at the Monistry of Finance and Economic Planning.

Under that contract, Waterville was to procure funds for the rehabilitation projects.

Subsequently, Mr Agyeman-Manu wrote a letter of introduction for Waterville, Woyome and one other to three banks, but stated clearly that there was no power in them to enter into any contract and that if they agreed on something; the term sheet should be brought to Ghana for approval.

Why Woyome?

Clearly, he was a part of this deal, but officially as the local agent of Vamed, and now, almost by default, the agent of Waterville.

But the letter was clear that none of the persons mentioned in it had the power to enter into any contract. Note that it is this letter that the former Attorney General subsequently discovered and rushed to court to say that on the strength of this letter, she made a "mistake" when she thought and argued that we had a contract with Woyome. I will return to this later

Notwithstanding the above, Woyome claims in his statement of claim that he "arranged" €1 billion with a bank, and that he had an agreement with the state that he would be paid two per cent of "the project cost".

Once again he is unable to produce a contract under which he was to be paid any such monies.

Note that he says he "arranged" the funds. But the introduction letter was emphatic that whatever they did was not binding on the State until the State had directly contracted with the bank.

In any event, according to Woyome, this amount was to cover the construction of five new stadia, rehabilitation of three stadia, the construction of six hospitals, a cobalt plant and a tissue plant.

Now let's go back. The only contract in existence was for the rehabilitation of three existing stadia. Even if we were to assume that Woyome had the power to "arrange" funding for that contract (which is denied), who gave him the power to extend that to cover all the other projects and then claim a two per cent fee for all of that.

If you send me to go and hire a taxi for you for a fee, can I hire a taxi, a trotro, a Yutong bus and a bicycle and say you should pay me a fee covering all of that?

As things turned out, Waterville ran into difficulties in raising funds for the stadium rehabilitation, and time was running out. So the government terminated the contract. Waterville wrote to accept the termination and made a claim for a specific sum.

The government disagreed and asked the project consultant to do the relevant measurements of work done, materials on site, and already purchased but yet to be delivered materials. This was done and the Waterville was paid through its local subcontractors, Michelleti and Consar.

It is obvious that Waterville was not happy with how much it was paid, but this was certified by the project consultant.

Then there was a change in power. Waterville then surfaced again to make claims, way in excess of even what they had originally made in their letter to the previous government when it wrote to accept the termination.

Somehow, Woyome heard about this and wrote an angry letter saying that Waterville was lying and that in his view, Waterville was owed about €5 million and he Woyome was owed €6 million.

This brought a quick reaction from Waterville's lawyers, who reminded the AG that there was no contract with Woyome, and stated that Waterville had already paid Woyome off for his work and services and signed a termination agreement with him. I have seen the termination agreement. I will look for it and post it on my page.

Soon after this, Waterville's lawyers were fired, and Waterville and Woyome became one. Waterville then put in a claim for construction and financial engineering of €32 million.


We are told that this went for "arbitration" and that we were made to pay Waterville some huge monies. People in government have said it was €25 million.

Arbitration? Where? Who was the arbitrator? How was he appointed? Where is the Notice of Arbitration?

Under the contract it was supposed to be under ICSID rules and held in London. Where are the pleadings? Where are the records of proceedings of the hearing? Where is the award?

Woyome, however, gives the game away in his pleadings when he says that it was rather an "interim agreement" between Waterville and the government and that we paid €21.5 million.

But then he says that payment only covered construction and not his financial engineering.

Remember that Waterville had accepted the termination, in writing, and had been paid, leaving a rather small claim that we were refusing to pay because the projects consultant did not certify it.

Remember also that Woyome had claimed, on whatever basis, that we did not owe Waterville more than €6 million. But we ended up paying over €20 million to Waterville.

The writer is an Accra-based lawyer and a senior lecturer at the Ghana School of Law.

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