BoG wins $478m arbitration against Sibton Switch
The Bank of Ghana (BoG) has won an international arbitration of $478 million against Sibton Switch Systems Limited in the 2017 Ghana Retail Payment Systems Infrastructure contract, which saw an official of BoG dismissed.
The Tribunal, under the auspices of the London International Court of Arbitration (LCIA) that issued an award in favour of the Bank, dismissed all claims brought by Sibton Switch.
The tribunal also ordered the company to pay, in full, the legal fees and costs of the arbitration incurred by the central bank.
This was contained in a press statement by the central bank sighted by The Ghana Report.
Per the statement, the claims were dismissed due to the failure of Sibton Switch to comply with the orders of the Tribunal, including an earlier interim award made by the Tribunal on June 25, 2019, in favour of the central bank.
The order requested the company to make an interim award payment for the security of costs, but that was not adhered to by Sibton Switch.
Commenting on the ruling, the Governor of BoG, Dr Ernest Addison, said that he was pleased with the favourable outcome in the proceedings and for the billions of cedis saved by the Ghanaian taxpayer as a result.
On April 9, 2018, Sibton Switch filed a request for arbitration with the LCIA against the central bank, claiming that the bank breached the Master Agreement for the Ghana Retail Payment Systems Infrastructure entered into by the two parties.
Following the 2016 elections and on the appointment of a new Management of the Bank, it became necessary to review the terms of the contract entered into by the previous administration.
In reviewing the contract, the new management of the Bank concluded that Sibton had neither acquired the licence nor fulfilled the condition precedent for the effectiveness of the rights and obligations of the parties.
The agreement, which dealt with the grant of exclusive rights to Sibton Switch to build, operate and own the Ghana Retail Payment Systems Infrastructure, was therefore terminated on the basis that it never came into effect.
The Claimant, Sibton Switch, went to the LCIA seeking relief for $478 million from the respondent, BoG.
The contract awarded to Sibton Switch was one-sided in favour of Sibton Switch and was severely detrimental to the interests of the Bank. For example, the Public Procurement Authority (PPA) approval for the project provided that BoG maximum liability was to be GH¢300,000.
Contrary to this approval, the procured contract with Sibton Switch provided that the Bank of Ghana had a huge potential liability of $478 million (GH¢2.6 billion).
In addition, the tender price of Sibton Switch was more than 33 times more expensive than the next most expensive bid.
Following the termination of the contract with Sibton Switch in 2017, the Bank of Ghana’s subsidiary, GhIPSS, was able to deliver mobile payment systems interoperability at a small fraction of the cost, saving the Ghanaian taxpayers billions cedis.
The Bank of Ghana in September 2019 dismissed an official of the central bank, Mr Gilbert Addy, for gross misconduct concerning transactions and for accepting bribes in connection with the award of a contract to Sibton Switch.
Bank statements revealed that secret and corrupt payments of GH¢410,000.00 were made by Sibton Switch and its parent company Sibton Communications Limited to Mr Addy at BoG through a shelf company GIB JUST Systems Limited, which was owned by him.