Delta Foods Moves To Seize Ghana's Assets In U.S

By Dominic Jale

Accra - The first step towards seizing Ghana Government's assets in the United States to pay for its ?30 billion($8,787,879) indebtedness to Delta Foods was taken on October 8, when a District Court in Washington, in a summary judgement ordered the Government, to pay the money within 30 days.

Delta Foods had filed a suit in the court seeking to enforce a foreign money judgement against the Government of Ghana. In his judgement, Justice Louis F. Oberdorfer further ordered the Government to pay interest on the debt to accrue from October 15, 1998, the date of judgement by an Accra High Court was entered against Government of Ghana, to the present. The judge also dismissed the Ghana Government motion that sought to deny Delta's action.

The Ghana Government argued that Delta's complaint be dismissed or judgement granted in its favour on grounds of comity and forum non conveniences, Government argued that the court should exercise its discretion under the doctrine of comity not to recognise the Ghana judgement because "the judgement is the subject of a challenge by the Executive branch of the foreign state where the judgement originated.

This is engendered by the expressed intent of the Attorney-General of Ghana to set aside such judgement in Ghana on grounds of fraud". Judge Oberdorfer said none of the cases cited by defendants to support their argument that a pending collateral attack that is based on allegations of fraud in the underlying transaction is a legitimate basis for not enforcing a foreign judgement.

The court also ruled on Ghana's contention that Delta's action be dismissed in pursuant to the doctrine of forum non conveniences. The judge said in deciding whether to dismiss a case on that basis, a court must look at the private interests of the litigants, e.g. the plaintiff's choice of forum, relative ease of access to sources of proof, the availability of compulsory process for attendance of unwilling witnesses, among others.

"As the defendants recognise, the doctrine of forum non conveniences would be inapplicable to a judgement enforcement action because it is a summary proceeding that does not involve a trial on the merits. "Nonetheless, the defendants argue, the doctrine applies here because this court needs to hear proof of the fraud underlying the original transaction in order to resolve the case.

"Plaintiff asserts that such proof is unnecessary, indeed irrelevant, because an allegation of fraud in the underlying transaction fails as a matter of law as a defence to enforcement. The plaintiff also points out that the defendants cite no case applying the doctrine of forum non conveniences to a foreign judgement recognition action and that as this is an action to enforce a foreign judgement against assets in the United States the courts in Ghana would not have jurisdiction over the present case.

"As explained below, an allegation of fraud underlying the original transaction is not a basis for refusing to recognise a foreign money judgement. Absent any need for enquiring into the underlying fraud, the defendants' forum non convenience argument is meritless".

Judge Oberdorfer said defendants argument that the allegation of fraud should lead the court to exercise its discretion not to enforce the judgement is not supported by any authority. He said the defendants had asserted on numerous occasions that their allegations of fraud are based on and supported by a "report" prepared by an "independent government investigative committee" known as the policy management group.

"However, to date, the report has not been produced to the plaintiff or provided to the court because the defendants claim it is confidential and privileged government document. "In the light of this courts conclusion that the Ghana judgement is enforceable irrespective of the governments allegation of fraud in the underlying transaction, the government's motion for in camera review of the PMG report will be denied.

Commenting on the judgement, a source close to Delta's US Attorney, Robert D. Balin, told the Chronicle that failure to comply with the order after 30 days would lead to an enforcement action that would attach Ghana Government's properties and funds in the US, which have been located in banks.

Delta's US action stemmed from the persistent refusal of the Government to pay for 21,000 metric tonnes of white maize purchased from the company in 1997. When the Government continued to drag its feet for the payment of the consent judgement debt, after the High Court and Supreme Court had ordered it to do so, Delta then filed an enforcement suit on January 8, this year, in the USA.

To curtail the Company's US enforcement action, the Government rushed back to court and filed a collateral action on April 14, this year, praying the court to quash the ?20.3 billion consent judgement debt on the grounds of fraud. The Attorney-General alleged that Delta Foods had fraudulently induced the Ministry of Food and Agriculture to agree to purchase the maize, but in July 'this year' an Accra High Court dismissed the Government action.

In dismissing the Government's action, the court presided by Justice (Nana) Gyamera-Tawiah sitting as a vacation judge, said that the fraud alleged by the Government was "non-existent" and that such 'vexatious' and 'palpably bad action initiated by the Government was an attempt to abuse the court process and, therefore, dismissed the action.

Granting the summary judgement to Delta, the Washington District Court also ordered the defendant (Ghana) to recognise and observe several judgements delivered in favour of Delta by Ghanaian courts. "The final judgement the plaintiff (Delta) obtained in the matter of Delta Foods Ltd., versus the Ministry of Food and Agriculture from the High Court of Justice in Ghana (copy of judgement and incorporated terms of settlement is recognised and enforceable", the Washington District Court declared.

The Court further ordered the Government to make sure that the interest accrued from ?20.3 billion consent judgement-debt since October 15, 1998, should also be paid to Delta. The Court held that the execution of the present judgement is stayed for 30 days during which time Ghana Government may arrange for appropriate security and if such security is arranged, apply to this (Washington DC) District Court to continue the stay of execution, that is, to avoid the attachment of the Government property in New York. According to the Court after Delta has filed the motion for summary judgement, the Government also filed a motion to dismiss Delta's, but after delving into the case, the Court dismissed the Government's motion and granted the summary judgement to Delta.

In 1997, the Ministry of Food and Agriculture acting for the Government entered into a contract with Delta Foods to supply 21,000 tonnes of American white maize. When the payment was due, the Government started playing tricks with Delta, and as a result, the Company has no option than to file action in court and secure a consent judgement against the Government. This was after the Government had failed to contest the claim.

On December 28, 1998, Delta Foods notified the Government that it intended to file suit in the United States for the recognition and enforcement of the Ghana judgement. Mr. E. A. Addo the Solicitor- General quickly wrote to the Delta attorney assuring him that the nation was experiencing budgetary problems and that the money was to be paid early this year after the new Budget was read.

A few days after the assurance letter, the same Solicitor-General rushed to the Supreme Court and filed an application for certiorari to quash the consent judgement debt, but on March 3, this year the Supreme Court unanimously dismissed the Government's application. Ghana was represented by Mr. Michael Cole, while Darvis Wright Tremaine battled for Delta Foods Limited, a Ghanaian company with its majority shareholders in the US. Meanwhile, the Ministry of Food and Agriculture has resold the last of the 21,000 metric tonnes of white maize this year.