23rd July 2024

  Dr. Ernest Addison, BoG Governor

The Bank of Ghana (BoG) has won a $478 million (GHC2.billion) arbitration against Sibton Switch Limited, with the latter ordered to make a substantial payment to the central bank in respect of its legal fees and cost of the arbitration.

This is in relation to BoG’s termination of the Master Agreement for the Ghana Retail Payment Systems Infrastructure in 2017.

A Tribunal constituted under the auspices of the London International Court of Arbitration (LCIA) dismissed all claims brought by Sibton Switch Systems Limited (“Sibton Switch”). Sibton Switch went to the LCIA seeking relief in the sum of USD 478 million, equivalent to GHC2.billion, from the Bank of Ghana


NDC’s bad contract

Following the humiliating defeat of the NDC in the 2016 elections, and upon 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 Mahama administration.

In reviewing the contract, it came to light that the contract was one-sided, in favour of Sibton Switch, and was severely detrimental to the interest of Bank of Ghana.

The Governor of the Bank of Ghana, Dr Ernest Addison, and his team found that “the Public Procurement Authority approval for the project provided that the Bank of Ghana’s maximum liability was to be GHC300,000. Contrary to this approval, the corruptly-procured contract with Sibton Switch provided that the Bank of Ghana had a huge potential liability of $478 million (GHC2.6 billion).”

It further came to light that the tender price of Sibton Switch was over 33 times more expensive than the next most expensive bid.

Additionally, Dr Addison and his team 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.

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.


Arbitration award

The Bank of Ghana explained that on July 28, 2021 a panel of three distinguished arbitrators issued an award in favour of the bank due to the failure by Sibton Switch Systems Limited to comply with the orders of the Tribunal.


The order included an earlier interim award made by the Tribunal on June 25, 2019 in favour of the Bank of Ghana, which required Sibton Switch to make an interim award payment for security of costs.

The final award also orders Sibton Switch Systems Limited to pay to the Bank of Ghana in full, its costs of the arbitration in respect of legal fees.

“The Governor, Dr. Ernest Addison, said that he was pleased with the favourable outcome for the Bank in these proceedings, and for the billions of Ghana Cedis saved by the Ghanaian taxpayer as a result,” BoG said in a statement.


Brief Facts


In 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 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 in the sum of $478 million from the respondent, Bank of Ghana.



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