Judgment debt: NDK’s GH¢1.2bn claim thrown out

• Posted on June 3, 2021June 3, 2021
• by Nana Kwesi Coomson
• Comment

A legal action by the Attorney-General (A-G) has saved the state from paying more than GH¢1.2billion in judgment debt which was being claimed by NDK Financial Services.

The company went to court compel the government to pay GH¢1.273 billion it claimed was outstanding balance and interests on a judgment debt.

Instead, the financial services company was awarded GH¢14,699.74 with interest, by the Supreme Court after the A-G had challenged the validity of its claims.

The said judgment debt was in relation to a credit facility provided by NDK between 2005 and 2008 for Ahaman Enterprises Limited for the latter to hand some electrical poles and other electric materials on behalf of the Ministry of Energy.

Ruling

Following disagreement over the quantum of the judgment debt last year, the Supreme Court appointed the accounting firm, PricewaterhouseCoopers (PwC), to audit the books and ascertain the veracity of the GH¢1.23 billion being claimed by NDK Financial Services.

That followed an application by the A-G, Mr Godfred Yeboah Dame, to the effect that the state did not owe NDK any amount on the basis that it had fully fulfilled all financial obligations to the company.

It was after PwC’s audit that the apex court reached its decision Tuesday [June 2, 2021].

In a unanimous decision, a five-member panel of the court, presided over by the Chief Justice, Justice Kwesi Anin Yeboah, threw out the application for GH¢1.23 billion by NDK.

“The decision of the court is unanimous; the plaintiff herein (NDK) is adjudged to recover from the defendant (A-G) an amount of GH¢14,699.74 as the outstanding balance by the defendant to the plaintiff,” the Chief Justice said.

“The said amount adjudged to be paid by the defendant is to attract the statutory rate of interest under Rule 4(1) of Court (Award of Interest and Post-Judgment Interest Rules, 2005; that is, C.I. 52), from 28th November, 2014 to the date of final payment, with the rate being the rate as of 2nd June, 20121,” the Chief Justice ruled.

Other members of the panel were Justices Jones Dotse, Paul Baffoe Bonnie, Sule Gbadegbe and Nene Amegatcher.

Background

NDK Financial Services was approached by Ahaman Enterprises, a haulage company, for a credit facility and thereafter for several credit facilities over a period of time between 2005 and 2008 to enable the latter to execute contracts awarded it by the Ministry of Energy to haul electric poles and other electric materials from designated locations to various parts of the country under the National Electrification Project.

As a condition for the approval of the credit facilities, NDK requested Ahaman Enterprises to secure a written undertaking from the Ministry of Energy that payment would be made in the joint names of NDK and Ahaman Enterprises.

The undertakings were duly signed by the Chief Director and the Principal Accountant of the Ministry of Energy between 2005 and 2008.

Relying on the undertakings, NDK advanced various sums of money to Ahaman Enterprises.

NDK later argued that Ahaman Enterprises and the Ministry of Energy failed to honour the undertakings.

Litany of suits

On December 21, 2009, NDK issued a writ against Ahaman Enterprises, the A-G, Messrs Alex Aduko and Aduko Kyeremanteng, who had secured the amount.

The plaintiff claimed jointly and severally against the defendants the sum of GH¢286,250.52, being part of the debt balance due under the facilities granted to Ahaman Enterprises by NDK between August 26, 2005 and April 28, 2006.

On December 21, 2011, the High Court entered judgment in favour of NDK, but upheld an argument by the A-G that the State had fully discharged its obligation to NDK following a settlement process in which the government paid GH¢79.5 million to NDK.

NDK went to the Court of Appeal, and on March 28, 2013 the court upheld the appeal and ordered the payment of all the sums under the haulage contract, at a monthly interest of 6.5 per cent.

The A-G appealed to the Supreme Court, but on November 28, 2014 the highest of the land dismissed the appeal.

A-G’s moves

Flowing disagreement over the quantum of the judgment debt, the A-G, in 2019, went to the apex court, asking it to determine the amount.

Mr Dame submitted that in 2018, NDK wrote to the A-G claiming about GH¢640 million as the judgement debt and subsequently followed up in 2019 that the amount had ballooned to GH¢1.23 billion, and that it was prepared to accept GH¢450 million as final settlement.

Mr Dame, however, urged the apex court to order that the state had already fulfilled its financial obligations by paying the GH¢79.5 million to NDK.

“That the applicant is of the humble view that there is nothing outstanding on the judgment of this honourable court, as it has fully satisfied the monetary awards made by the court and respondent has been unable to produce any evidence of what it terms ‘unascertained diverted portions of the judgment’.

“That the instant application has become very necessary as the unsubstantiated claim of the judgment creditor will have a serious burden on the public purse,” the A-G argued.

It was based on the application by the A-G that the court ordered the auditing of the books and rejected the claims of NDK Financial Services.

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