The Oslo District Court, presided over by Justice Dagfinn Gronvik, has dismissed an action instituted by Messrs Jongsbru AS, sellers of a property identified by Ghana for use as a Chancery in Oslo, Norway in 2018.
The court, after a trial, held that none of Ghana’s representatives in the transaction, as well as Ghana’s lawyer at the time of the transaction, had authority to conclude a binding agreement between Ghana and the sellers and, therefore, “Ghana will be acquitted of the lawsuit by Jongsbru AS”.
It awarded procedural costs in the sum of one million, seven hundred Norwegian Kronner in favour of Ghana to be paid by Jongsbru.
Facts of case
In 2018, Ghana decided to establish an embassy in Norway, for which Parliament approved the grant of funds for the establishment of the embassy, as well as other missions around the world.
A delegation of four Ghanaian officials was appointed to go to Norway and carry out the necessary practical and administrative preparations for the establishment of the embassy.
Among the preparations to be made was the acquisition of a Chancery Building, either by purchase or lease. The Ghanaian delegation identified a number of properties, including Sigyns Gate 3 at Frogner in Oslo, the property which became the subject matter of the litigation in the District Court of Norway.
For legal assistance, Ghana hired a lawyer, Mikkel Vislie, from the Law Firm of Selmer.
On November 22, 2018, Ghana received an offer from Jongsbru to buy the property for 100 million Norwegian Kronner, with a deadline of seven days.
Ghana’s Charge d’Affaires, Regina Appiah-Sam, responded to Jongsbru’s offer in those terms, accepting the offer on behalf of the government but with conditions.
Among the conditions set by the charge d’affaires listed as that it would be a condition for the acceptance of the offer and the final contract.
Also, the building must be without significant defects, while the renovation work had to be performed and completed in a satisfactory manner.
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.
Unhappy with Ghana’s decision to withdraw from the transaction, 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.
A mediation process to resolve the dispute held in Oslo and presided over by a panel of three judges of the District Court, Oslo, in September 2021 failed to reach a settlement, as the Ghanaian team, led by Ghana’s Attorney-General, Godfred Yeboah Dame, did not accept the amount of about 30 million Norwegian Kronner proposed by Jongsbru as acceptable for a settlement of the dispute.
With an unsuccessful mediation to resolve the issue, the matter proceeded for trial, at which Ghana called four witnesses, made up of its Ambassador to Norway, Jennifer Lartey; the Charge d’Affaires at the time of the transaction, Mrs Appiah-Sam; the Deputy Head of Mission in Norway, Charles Marfo, and the Director of the Legal Directorate at the Ministry of Finance, Mrs Mangowa Ghanney.
The Oslo District Court, in its judgement on December 16, 2021, said the binding competence lay with Ghana’s Minister of Foreign Affairs, in accordance with Section 20 of the State Property and Contracts Act of 1960.
Under Ghana’s law, the Procurement Board must agree on the purchase of the property and the application of funds must also be approved of by the Minister of Finance, before the Minister of 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.
The court found that neither the charge d’affaires of Ghana at the time, Mrs Appiah-Sam, nor Ghana’s lawyer, Mikkel Visllie, 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. In the circumstances, Ghana will be fully cleared of any liability to Jongsbru arising from the transaction and awarded procedural costs of one million, seven hundred Norwegian Kronner,” the judgement ruled.
The court rather ordered lawyer Vislie, who acted for Ghana, and his insurance company, Tryg Forsikring, to pay to Jongsbru the sum of thirty-seven million, seven hundred and twelve thousand, nine hundred and four Norwegian Kronner as compensation.
Jongsbru convinced the court that the lawyer was fully responsible for the positive contractual interest, in accordance with the Contracts Act of Norway, and that the company did not understand and could not have reasonably understood that the lawyer did not have authorisation to act.
The court, in its ruling, was of the view that there was a particular reason for trusting lawyers who acted on behalf of clients, thus the lawyer who acted on behalf of Ghana should be held liable for the litigation.
“The lawyer owes a duty to be vigilant and safeguard the best interests of the client. Vislie was responsible for ensuring that Ghana had issued a power of attorney or not.
“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,” it concluded in its ruling to surcharge the legal representative of Ghana in the foiled deal.