Go back to arbitration with unibank shareholders – Court orders BoG

An Accra High court has ordered the Bank of Ghana to go back to arbitration with shareholders of unibank over the revocation of the bank’s license in 2018.

The court has also directed the parties involved in the case to choose their own arbitrator in the matter.

The court ruling comes after the appointed arbitrator Retired Supreme Court Judge Prof Date-Baah decided not to arbitrate the matter. The court ruled that the decision not to arbitrate goes beyond the mandate of the retired judge and therefore asked the parties to go back to the table and talk.

In her ruling, Justice Dadzie disagreed with the assertions of the learned Justice Date-Bah who, in declining to arbitrate, had argued that he did not have jurisdiction to proceed as the Receiver had failed to give his consent to the arbitration proceedings.

In disagreeing with the retired judge, Justice Jennifer Dadzie stated that as the Banking and Specialised Deposit-Taking Institutions Act (Act 930) had specifically laid down arbitration as the mode of redress, it was statutory as well as mandatory and not one that required express consent as was being alleged by the Receiver and supported by Date-Bah. She stated that in this instance the Act would be looked upon as an arbitral agreement and since the parties had already subjected themselves to the Act, they could not then raise consent as a way of avoiding the arbitration process.

In setting aside his arbitral award as being in excess of his mandate, Justice Dadzie noted that Prof Date-Bah did not make any attempt to settle the dispute but rather appeared to have gone outside the purview of his mandate in questioning the validity of the court order made on 17th May 2019 where Justice Dadzie ordered the parties to go to arbitration and appointed him as the arbitrator.

She, therefore, ordered the parties to, within 21 days appoint an arbitrator each and for the two arbitrators to appoint a third who will be chairman of the panel.

She also dismissed the Receiver’s claim that he should not be made a party to the arbitral proceedings stating that any decision of the arbitration will directly affect his appointment and thus he ought to remain as a necessary party to the proceedings.

The shareholders of unibank are challenging the decision by the Central bank to revoke the license of the bank.

According the shareholders, the erroneous report by KPMG formed the basis for the revocation of the bank’s license and its good assets handed over to the Consolidated Bank Ghana.

The motion said further that the processes leading to the formation of the Consolidated bank were fraught with gross violations of the relevant laws of Ghana especially Banks and Specialized Deposit Taking Institutions Act, 2016 (Act 930) and the company’s Act of 1963 (Act 179)

The 17 shareholders in paragraph 15 of their motion also alleged that KPMG misled the Ministry of Finance to transfer large volumes of public funds to establish the new bank instead of just honouring their verified financial obligations to uniBank in order for the bank to continue running as a private entity.

Source: Ghana/Starrfm.com.gh