THE OSLO Court of Appeal has in a unanimous decision dismissed a case filed against the Republic of Ghana by Messrs Jongsbru AS, the sellers of a property identified by Ghana for use as a chancery building in Oslo, Norway.
A three-member panel of the court, Pal Morten Andreassen, Irene Sogn and Rolf Ytrehus, dismissed the appeal filed in December last year against the judgment of the Oslo District Court (High Court) in December, 2021, in its entirety and awarded damages and procedural costs in favour of Ghana.
The court further acquitted Ghana of all liabilities and concluded that “a purchase agreement to which Ghana was a party could not be said to have been completed between the parties”.
The court awarded the sum of 1.5 million Norwegian Kroner (approximately $150,000) payable by the appellant to Ghana as procedural costs incurred before the Court of Appeal. It further ordered the appellant to pay to Ghana 1 million Norwegian Kroner (approximately $100, 000) as compensation for procedural costs at the High Court.
In 2018, Ghana decided to establish an embassy in Norway. The acquisition of a chancery building, either by purchase or by a lease, was deemed to be critical to the establishment of the embassy.
A delegation from Ghana identified a number of properties, including Sigyns Gate 3 at Frogner in Oslo, the property which is the subject matter of the litigation.
On November 22, 2018, Ghana received an offer from Jongsbru to buy the property for 100 million Norwegian Kroner. The offer had a deadline of seven days, i.e. by November 29, 2018.
Subsequent to due certification by Ghana’s appointed valuers that the building was without significant defects and that the renovation works on same had been completed and performed in a satisfactory manner, Ghana pulled out of the transaction on various grounds, including a failure on the part of the sellers to satisfy the condition of a final approval from the relevant Municipal authorities in Oslo for the use of the property as an Embassy.
Jongsbru AS, sued the Government of Ghana in the Oslo District Court claiming sums totalling about seventy-eight million Norwegian Kroner for breach of contract, loss of profits, interest and costs of litigation.
On December 16, 2021, the Oslo District Court upheld Ghana’s contention that on the issue of choice of law, the competence or legal capacity of Ghanaian officials to bind the Republic of Ghana must be decided according to Ghana law.
Whereas the Government of Ghana had led evidence by the Director of the Legal Directorate of the Ministry of Finance to prove the content of Ghana’s financial and procurement laws, no attempt was made by the plaintiff to rebut same.
The court found neither the Charge d’Affaires of Ghana at the time, Mrs. Appiah-Sam nor Ghana’s lawyer, Mikkel Vislie had authority to enter into the agreement on behalf of Ghana. There was thus no valid or binding agreement between the sellers of the property and Ghana.
The court further held that under Ghana law, the Public Procurement Authority must agree on the purchase of the property and the application of funds must also be approved by the Minister for Finance, before the Minister for Foreign Affairs must either personally execute the agreement for the purchase of the property or authorise another competent person by a power of attorney to execute the agreement, which had not been done.
The court found that the lawyer did not have any reasonable excuse for not ensuring that there was a power of attorney signed by Ghana before purporting to convey acceptance of the offer by Jongsbru.
The court thus ordered lawyer Mikkel Vislie, who acted for Ghana, and his insurance company, Tryg Forsikring to pay to Jongsbru the sum of 37, 712,904 Norwegian Kroner as compensation.
Jongsbru subsequently filed an appeal and Ghana’s Attorney General, Godfred Yeboah Dame, led a team from Ghana for the hearing while Mrs. Jennifer Lartey, Ghana’s ambassador to Norway, Mrs. Regina Appiah-Sam, Charge d’Affairs at the time the embassy was opened, Charles Osei-Marfo of the Oslo mission, Ms. Doris Brese, Ministry of Foreign Affairs and Mrs. Mangowa Ghanney, former Director, Legal at the Ministry of Foreign Affairs, testified as witnesses for Ghana.
The Oslo Court of Appeal dismissed the appeal in its entirety as it held that on a proper application of the principles of offer and acceptance, Ghana could have withdrawn from the agreement (even if it was binding), as all conditions necessary for the performance of the contract had not been satisfied.
The court further noted that, the condition regarding authorisation by the municipal permission to use the property as chancery, was vital to the purchase, and that, only Jongsbru, not Ghana, had any control over whether the condition would be met or not. Further, the consequences of the condition not being met, was set out specifically in the agreement.
Mr. Dame, commenting on the decision of the Oslo Court of Appeal, expressed satisfaction with the outcome of the appeal and hoped that it would mark the end of the dispute.