THE REPUBLIC VRS BANK OF GHANA [2024] GHASC 40 (26 June 2024)

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IN THE SUPERIOR COURT OF JUDICATURE IN THE SUPREME COURT ACCRA – A.D. 2024

Coram

SACKEY TORKORNOO (MRS.) CJ (PRESIDING) OWUSU (MS.) JSC PROF. MENSA-BONSU (MRS.) JSC GAEWU JSC DARKO ASARE JSC

Civil Appeal

NO. J4/62/2023 26TH JUNE, 2024 THE REPUBLIC

VRS

BANK OF GHANA ……….. RESPONDENT/RESPONDENT/APPELLANT

EX-PARTE: HODA HOLDINGS LIMITED ……. APPLICANT/APPELLANT/ RESPONDENT

Judgment

SACKEY TORKORNOO CJ:

Background of facts and law 1] Chapter 5 of the 1992 Constitution deals with fundamental human rights and freedoms. Article 23 of the 1992 Constitution falls within chapter 5 and provides regarding the right to administrative justice: Page 2 of 33

Administrative Justice 23 Administrative bodies and administrative officials shall act fairly and reasonably and comply with the requirements imposed on them by law and persons aggrieved by the exercise of such acts and decisions shall have the right to seek redress before a court or other tribunal 2] This power of judicial review over administrative bodies and officials is placed in the hands of the high court under article 140 (2) of the 1992 Constitution. This jurisdiction may be invoked through the original and general jurisdiction of the high court in section 15 (1) (a) of the Courts Act, 1993 Act 459, or the high court’s special jurisdiction over Fundamental Human Rights and Freedoms in article 33 (1) section 15 (1) (a) (b) of Act 459. 3] On 19th August 2019, the Applicant/Appellant/Respondent (hereafter referred to as Applicant) filed an application in the high court seeking judicial review of an Administrative Notice issued by the Respondent/Appellant/Respondent (hereafter referred to as BOG). An amended notice of motion was filed on 8th November 2019. The motion prayed the high court for the following reliefs:

1. An Order of Certiorari directed at the Respondent to bring up to this Honourable Court for the purpose of being Quashed the Notice Dated the 16 th day of August, 2019 declaring Unicredit Ghana Limited insolvent and revoking the license of Unicredit Ghana Limited to operate as a Specialized Deposit Taking Institution.

2. An Order of Interlocutory Injunction restraining the Respondent, their agents, assigns, privies hirelings or otherwise howsoever descr ibed from interfering with the operations of Unicredit Ghana Limited and to refer the subject matter of the instant application to arbitration.

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Summary of the case brought to court. Jurisdiction 4] The applicant submitted that the application was made pursuant to order 55 Rule (3) (1) of the High Court (Civil Procedure) Rules 2004 CI

47. It referenced the basis of the application to the supervisory jurisdiction of the high court in article 141, of the 1992 Constitution, and section 16 of the Courts Act, 1993 Act

459. Article 141 reads: Supervisory Jurisdiction of the High Court

141. The High Court shall have supervisory jurisdiction over all lower courts and any lower adjudicating authority; and may, in the exercise of that jurisdiction, issue orders and directions for the purpose of enforcing or securing the enforcement of its supervisory powers Grounds for applying for certiorari Applicant set down three grounds for the application for certiorari a. Breach of rules of natural justice which requires that applicant be given a hearing before an adverse decision is given against it b. Failure to give Unicredit’s board of directors and shareholders a hearing and notice before revoking the company’s license leading to the revocation being null and void c. Unlawfulness of the revocation because of the failure to give the hearing 5] In the affidavit in support of the application deposed to by a staff of the Applicant, the Applicant was described as a majority shareholder of Unicredit Ghana Ltd (hereafter referred to as Unicredit) and Unibank Ghana Ltd. Unibank was a bank that had been placed under administrator-ship by the BOG on 20th March 2018 pursuant to the powers of BOG under the Specialized Deposit Taking Institutions Act 2016, Act

930. The Applicant averred that on 16th August 2019, BOG issued an Administrative Page 4 of 33

Notice declaring Unicredit to be insolvent and revoking the license of UniCredit to operate as a Specialized Deposit Taking Institution (STDI). 6] According to Applicant, at all times, Unicredit held investments in a company called Unisecurities, also a subsidiary of the Applicant. The investments of Unicredit that were held with Unisecurities became impaired, leading to a substantial reduction of the capital adequacy ratio of Unicredit. This prompted Unicredit to take steps to mobilize further income, in accordance with BOG’s Guidelines as indicated in its Accounting Manual issued to Banks and STDIs. The applicant further averred that BOG, although aware of the situation faced by Unicredit by reason of lack of access to its investments in Unibank after the revocation of the banking licence of Unibank, ordered Unicredit, by letter dated 8th July 2019, to reverse all attempts at restoring its capital through realizing investments that were held with Unisecurities. Unicredit complied with the directive and demonstrated to BOG that its total assets position was unchanged, that it was solvent, and its capital adequacy was improving steadily, having braved the storm occasioned by the revocation of Unibank’s license, and the withholding of Unicredit’s funds. The license of Unicredit was however revoked by BOG through the issue of a Notice dated 16th August 2019. The applicant urged that BOG’s inexplicable attitude pointed directly to a premeditated agenda to revoke Unicredit’s license, despite its’ efforts to restore its capital adequacy. It was the position of applicant that, at all times prior to the revocation of Unicredit’s license on 16th August 2019, Unicredit was solvent in terms of Act 930. 7] Applicant further averred that at no point in time did BOG indicate to Unicredit that it had become insolvent, and so the decision to declare Unicredit insolvent and revoke its license was not based on any empirical fact. It was based on deductions made against an extremely difficult financial situation created to induce Unicredit and its shareholders, including the Applicant, to ‘give in to BOG’s malicious intentions’. Page 5 of 33

It was the case of the Applicant that the decision taken by BOG in its Notice of 16th August 2019 revoking Unicredit’s licence was in contravention of Act 930 and premature, arbitrary, malicious and capricious. It was also a violation of the constitutional right to administrative justice in article 23 of the 1992 Constitution of Ghana. 8] The Applicant attached exhibits OB1 to OB6 in support of the original application and referred to them in the affidavit attached to the amended notice of motion. It is not clear if the parties found it burdensome to attach these exhibits to the amended application within the Record of Appeal, or in truth, they were simply referred to in the second affidavit without being attached to it. The exhibits covered communications between Unicredit and BOG as regulator on the matters set out above. Exhibit OB6 is the Notice that revoked the licenses. Exhibits OB1 to OB6 were dated between August 2018 and 16th August 2019, when BOG issued exhibit OB6 Effect of the revocation on Applicant 9] The Applicant urged that the decision to declare Unicredit insolvent and revoke its licence has gravely affected the Applicant and its substantial investments with Unicredit, which the Applicant stands to lose if the decision is not quashed by the court. Further, unless restrained by the high court, BOG through their agents and others would go ahead and take control of, and interfere with the operations of Unicredit. This would be to the detriment of Unicredit and the depositors of Unicredit. The natural justice rule of audi alteram partem/right to be heard 10] In the accompanying Statement of Case, the Applicant submitted that neither Unicredit nor its directors and shareholders were notified that it was in a precarious financial position. Neither were they notified of the possibility of a revocation of its license. They urged that both section 16 and section 106 of the Specialized Deposit Taking Institutions Act 2016, Act 930 which govern the power of BOG to revoke the license of a Bank or a Specialized Deposit Taking Institution, make it Page 6 of 33

mandatory for the BOG to give notice and a period of time for remedial action to be taken before revocation of the license takes place. 11] Thus, all that the BOG had to do was to give appropriate notice to Unicredit and its directors and shareholders before revoking Unicredit’s license. By so doing, they would have met their obligations prescribed by law. Applicant further urged that in three years prior to the impugned notice in this action, BOG had revoked the license of 7 banks and in all those occasions, it notified the whole world and given the shareholders and directors of those institutions, the opportunity to take remedial steps to save the institutions. BOG therefore was well aware of the statutory and constitutional duty to provide notification of revocations. The Notice of 16th August 2019, therefore breached the audi alteram partem rule of natural justice. The failure to give a hearing before the revocation of Unicredit’s licence was also unlawful, and rendered the said revocation null and void. 12] Applicant cited the dictum of this court in Awuni v West African Examination Council [2003-2004] 1 SCGLR 471 on the legal position that the right to be heard has been elevated to a fundamental right under the 1992 Constitution, because it constitutes a critical component of administrative justice and the duty imposed on administrative bodies and administrative officials to act ‘fairly and reasonably’. Further, a breach of the rule of natural justice in any decision making process, whether by judicial or administrative body, places the decision maker out of jurisdiction. Applicant pointed out that not only was Unicredit not given an opportunity to make further efforts to remedy the financial problems it found itself in, but BOG took advantage of the circumstances it had created against Unicredit and its shareholders and directors, and used them to Unicredit’s detriment. 13] Counsel for applicant submitted that there was a plethora of legal authorities to the effect that the courts would grant an order of certiorari to quash acts that breach rules of natural justice. These cases include Republic v High Court Sekondi Ex Parte Page 7 of 33

Ampong Alias Akrufa Krukoko 1 (Kyerefo 111 & others Interested Parties [2011] 2 SCGLR

716. Injunction 14] The Applicant urged that it was entitled to seek an injunction to restrain the Bank of Ghana from interfering in the operations of Unicredit pursuant to Order 55 rule (1) (c ) because it was wrongful and the interest of justice would be best served if the BOG was restrained from further interfering in the business of Unicredit. Applicant also prayed the court to refer the alleged insolvency of Unicredit to arbitration for an unbiased determination. Opposition to the Application 15] The originating notice of application for judicial review was met with a motion to set it aside without a hearing. In the supporting affidavit to this application, the BOG argued that the jurisdiction of the high court had been wrongly invoked. That the revocation in issue was done pursuant to section 123 of Act 930, ‘which requires the Bank of Ghana to revoke the license of a bank or specialized deposit-taking institution, where the Bank of Ghana determines that the institution is insolvent’, and not section 16 of Act

930. Further, Act 930 had provided in section 141 (1) (a) that any person aggrieved with a decision of the Bank of Ghana in respect of matters arising under sections 123 to 139 of Act 930, and who desires redress of such grievances, shall resort to arbitration at the Alternate Dispute Resolution Center established under the Alternate Dispute Resolution Act, 2010 (Act 798). 16] By reason of Act 930 specifically providing the forum for seeking redress against the specific genre of decisions complained about, the Applicant ought to be disabled from circumventing that forum. He further urged that it would be an abuse of the process of the courts and contrary to public policy to permit a person seeking to establish that a decision of a public institution infringed rights to which he was entitled to protection under public law, to proceed without reference to the mechanism provided for redress under statute. Page 8 of 33

Dismissal of preliminary objection 17] In dismissing this preliminary objection, the high court was of the opinion that no special circumstances could oust the supervisory jurisdiction of the high courts over administrative decisions, because that power is constitutionally conferred by article 23 and article 141 of the 1992 Constitution, and affirmed in section 16 of the Courts Act 1993 Act

459. As such, citing Republic v Minister for Interior Ex Parte Bombelli [1984-1986] 1 GLR 204-219, the court pointed out that the exercise of discretionary power conferred by statute on an administrative or executive body would be subject to the supervision of the high court to ensure that the power was exercised legally, or within the confines of law and the basis of control was legality, and not merits. 18] The learned trial judge also reviewed cases affirming the constitutionally conferred right to administrative justice such as Awuni v West African Examination Council cited supra, and the right to natural justice in the acts of administrative officials as distilled in cases such as Awuku Sao v Ghana Supply Company [2009] SCGLR 710, and Aboagye v Ghana Commercial Bank Limited [2001-2002] SCGLR

He concluded that from these legal authorities, the high court has jurisdiction to hear matters where a complaint is that there has been breach of the right to natural justice by an administrative body, or that it has acted in excess of jurisdiction, or where it had acted with procedural impropriety, or had failed in compliance with common law requirements of procedural fairness. 19] Touching on the rule articulated in Boyefio v NTHC Properties Ltd [1996- 1997] SCGLR 531 that directs that where a law has prescribed a special procedure by which something was to be done, it was that procedure that was to be followed, the learned trial judge opined that that position did not take away the supervisory jurisdiction of the Courts in appropriate cases. The court is entitled to investigate the actions of administrative bodies such as BOG to determine whether the said actions fall Page 9 of 33

within the factors that should provoke reliefs allowed by the supervisory jurisdiction of the high court. He concluded therefore that the originating notice of motion had properly invoked the supervisory jurisdiction of the high court. Summary of BOG’s case 20] BOG filed its affidavit in opposition to the application in which it denied the factual basis and chronology of events as presented by the Applicant. In the affidavit, the BOG averred that the reliance of the Applicant on section 16 (3) and section 106 of Act 930 to urge that BOG was mandatorily required to give notice and a period of time for remedial action to be taken before revocation of a license was misplaced. This is because Unicredit’s license was revoked under section 123 and not section 16 and 106 of Act 930. 21] Second, BOG had engaged in supervisory and regulatory interventions regarding revocation of Unibank’s banking license, and directions given on investments held between Unicredit and Unibank and Unisecurities. These interventions were to address irregularities in transactions between the affiliated companies. Bog averred that it is these irregular transactions that also breached statutory compliance requirements under Act 930 that led to Unicredit being unable to access its investments and meet its capital adequacy requirements. BOG attached exhibit BOG1 to BOG 12 dating from September 2017 and July 2019 to corroborate its averments regarding the records of Unicredit and communications between it and Unicredit, prior to the revocation of the license in August 2019. 22] In its statement of case, BOG submitted that an institution need not be insolvent for its license to be revoked under section 16 (3) of Act 930, but an institution has to be insolvent for its license to be revoked under section 123 of Act

930. Also, an institution has to be significantly under-capitalized for the measures outlined in section 106 to be engaged. Page 10 of 33

Whereas revocation under section 16 (3) is subject to some discretionary consideration, BOG is compelled to revoke a license when an institution is insolvent. BOG urged that Unicredit was insolvent at all material times and it is insolvency that led to the revocation of its license. BOG sought to establish this with reference to the exhibits attached and an explanation of their content. 23] BOG also urged that the Applicant had failed to meet the legal requirements for grant of certiorari. Counsel for BOG urged that for a party to be entitled to certiorari, it ‘must satisfy the court that respondent had acted unlawfully, unreasonably and in breach of procedure. They must also establish that respondent had acted in excess or want of its statutory mandate and/ or some breach of natural justice, or had committed an error of law in arriving at its decision to revoke Unicredit’s license.’ Citing Republic v High Court Sekondi: Ex Parte Ampong referred to supra, counsel for BOG reiterated that in considering an application for certiorari, a court ought not to be concerned with the merits of the decision made by a Respondent. It was a discretionary remedy that would be granted on grounds of excess or want of jurisdiction and or some breach of the rules of natural justice, to correct a clear error of law apparent on the face of the record, which error ought to be so grave as to amount to the wrong assumption of jurisdiction, and also be so obvious as to make the decision a nullity 24] Further, it is the settled position that what would constitute a breach of the audi alteram partem rule, arises from the substance of procedure engaged, and not any particular form urged. It was the case of BOG that exhibits BO7 to BO13 reflected opportunities given to Unicredit to repair its capital deficiencies and its inability to do as directed. Counsel for BOG invited the court to hold that BOG had acted fairly and within the law, and without breaching the audi alteram partem rule. He also urged that the Applicant had not shown a legal right that ought to be protected by an injunction, and that on the balance of convenience, the detrimental effect of such Page 11 of 33