Court throws out application challenging BoG's revocation of GN Bank’s license

A Human Rights Court in Accra has rejected the application filed by Dr. Papa Kwesi Nduom, GN Savings and Loans and another party, alleging human rights infractions by the Bank of Ghana (BoG) in revoking the entity’s license.

The court ruled that the central bank was lawfully executing its mandate in the interest of shareholders and the public and could not be faulted for its actions.

Having confirmed that the applicants had the necessary capacity and properly invoked the court's jurisdiction, the judge proceeded to address the substantive issues raised, including discrimination, unreasonableness, unfairness and violation of administrative rights.

Regarding the violation of administrative rights, the applicants argued that an honest assessment by the BoG would have shown that GN Savings and Loans were solvent, contrary to the central bank's assertion.

They contended that if the government paid its debt, the capital adequacy ratio would have been met.

The applicants claimed that the BoG was unfair, unreasonable, and irrational in its administrative functions, asserting that no reasonable person faced with the same facts would have made the decision to revoke the license.

However, the court dismissed these claims, stating that as an administrative body empowered by the Bank of Ghana Act, the BoG was obligated to ensure strict supervision.

If the applicants did not meet the required threshold and were not solvent at the time of revocation, the BoG had the duty to take the action it did.

The court advised the plaintiffs to address the matter of the debt owed by the government with the Finance Ministry, emphasizing that the BoG took a reasonable decision to protect the public interest.

On the issue of discrimination, the court concluded that the applicants were not discriminated against, as other entities faced similar consequences. The court deemed the applicants' complaints unfounded and without merit.

Background

On June 2, last year, a three member panel of the Court of Appeal, unanimously upheld the Bank of Ghana’s application that the suit by Dr. Papa Kwesi Nduom, Coconut Groove Beach Resort Conference Centre Limited and Groupe Nduom against the Bank of Ghana’s revocation of the license of GN Bank be referred to Arbitration.

The Court held that per section 141 of the Banks and Specialised Deposit-Taking Institutions Act,2016, Act 930, the forum for such a challenge is arbitration and not the court.

The Court also held that Dr Nduom and the other applicants had masqueraded their challenge to the decision of Bank of Ghana as a human rights application.

The Court therefore stayed the proceedings at the High Court and referred the matter to the Ghana Arbitration Centre.

But, dissatisfied with the decision of the Court of Appeal, Dr Nduom and his lawyers led by Dr Justice Srem Sai filed a motion at the Supreme Court to challenge that decision.

The Court of Appeal panel of three led by Justice Henry Kwoffie, also included Justice Eric Baah and Justice Novisi Ayine.

GA/SARA

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