The Bank of Ghana has won an arbitration brought against it by Sibton Switch Systems Limited (“Sibton Switch”) regarding the termination of the Master Agreement for the Ghana Retail Payment Systems Infrastructure in 2017.
Per the ruling by a Tribunal constituted under the auspices of the London International Court of Arbitration (LCIA), Sibton Switch has been ordered to make a substantial payment to BoG in respect of its legal fees and costs of the arbitration.
Arbitration Award issued in favour of the Bank
On 28th July 2021, a panel of three distinguished arbitrators issued an award in favour of the Bank of Ghana in the LCIA arbitration, dismissing all the claims brought by Sibton Switch Systems Limited.
The claims were dismissed due to the failure by Sibton Switch Systems Limited to comply with the orders of the Tribunal including an earlier interim award made by the Tribunal on 25th of June 2019 in favour of the Bank of Ghana, which required Sibton Switch to make an interim award payment for security of costs.
Governor of the Bank of Ghana, Dr. Ernest Addison, has welcomed the favourable outcome for the Bank in these proceedings, and for the billions of Ghana Cedis saved by the Ghanaian taxpayer as a result.
On the 9th of April 2018, Sibton Switch filed a Request for Arbitration with the LCIA against the Bank of Ghana for breaching the Master Agreement for the Ghana Retail Payment Systems Infrastructure entered into by the two parties.
The Claimant, Sibton Switch, went to the LCIA seeking relief in the sum of USD 478 million from the respondent, Bank of Ghana.
Following the 2016 elections and on the appointment of a new Management of the Bank of Ghana, 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 reached the conclusion 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.
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 of Cedis.