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Opinions of Monday, 1 May 2017

Columnist: Amos Blessing Amorse

Whether 'investigate' or 'negotiate': Addison Committee guilty of conflict of interest

“If you see the contract, there is nothing in that contract that tells you that it would be performed by a third party. All the warranties and guarantees were given by Ameri. Now it turns out that this is a company that has no idea, expertise, and history about power projects; so how did they enter into this kind of agreement? So if you make statements by which another party is induced and it turns out that those statements are false, they are fraudulent misrepresentation.”

Lawyer Philip Addison, the Chairman of the committee tasked by Energy Minister to “investigate” or “negotiate” the Ameri deal was quoted by citifm to have made the above statement. The effect of his statement is that the Ameri deal was induced by “fraud”. The legal implication of fraudulent contracts, especially in the case of fraudulent misrepresentation, is well scripted in our law reports.

Before I dig into that, let me recap some of the things Lawyer Addison has been saying. Few weeks ago, an unsigned report surfaced in the Ghanaian media which was believed to be the final report of the Addison committee. The Minority in Parliament led by former Power Minister, Dr Kwabena Donkor, responded with a press conference , alleging that officials of Ameri sponsored the Addison committee’s trip to Dubai to investigate Ameri.

Prior to this, the Energy Minister has consistently said a committee had been constituted to investigate the Ameri deal. Mr Boakye Agyarko and his NPP variously accused NDC of shortchanging Ghanaians in the Ameri deal.

When Dr Donkor made the allegation, Mr Agyarko came out to deny the supposed Addison report on the basis that it was unsigned. Both Mr Agyarko and Addison could not respond to Dr Donkor’s allegation. It took the Minister of Information and later the Attorney General to confirm that Ameri sponsored the Addison committee.

They were however quick to parry any wrongdoing on the part of the Addison committee. Lawyer Addison himself, after going into hibernation following the allegation, also surfaced in the media with a well-rehearsed defense to douse the charge of conflict of interest. He confirmed that Ameri sponsored their trip to Dubai but denied that they traveled to Dubai to investigate Ameri.
According to Lawyer Addison, they traveled to Dubai courtesy the benevolence of Ameri to negotiate with officials of Ameri. He was quoted to have said “I keep reading and hearing that they were supposed to investigate Ameri, no, we were not going to investigate Ameri. We were going to have negotiations, not investigation.”

Note that when the Energy Minister constituted the Addison, there was no mention of negotiation as part of the committee’s terms of reference. In fact, the unsigned Addison committee report has nothing close to that. Note also that till date the ‘signed’ Addison report has not been made public. Both government officials and NPP communicators are all feeding from the unsigned report.

The intriguing aspect of Lawyer Addison’s narratives is his latest edict that officials of Ameri induced government to enter into the contract and that, rightly speaking, amounts to “fraudulent misrepresentation”. Granted that what Lawyer Addison is saying is true, which legal principle gives him authority to negotiate a deal founded on fraudulent misrepresentation?

It is trite knowledge that the law has no tolerance for fraud. This is expressed in the Latin maxim “fraud omnia vitiate” to wit “fraud vitiates everything”.

Fraudulent misrepresentation as alleged by Lawyer Addison is one of the three types of misrepresentation. Lord Herschel in Derry v Peek explains fraudulent misrepresentation as follows “first in order to sustain an action of deceit, there must be proof of fraud and nothing short of that will suffice. Secondly, fraud is proved when it is shown that false representation has been made knowingly or without belief in its truth or recklessly, careless whether it be true or false.”

Fraudulent misrepresentation makes a contract voidable, not void. Justice Abban in Japan Motors Trading Co Ltd v Randolph Motors Ltd summarized the effect of fraudulent misrepresentation in the following words “Where a purchaser has been induced to buy a property by the vendor’s fraudulent misrepresentation, the purchaser has two courses or options open to him. He may abide by the contract and then bring an action to recover damages he has sustained due to the fraud; or he may rescind the contract, return the property if already accepted, and recover the purchase price, if already paid, by action after demand and refusal. For the principle is that a contract induced by fraud is not void but only voidable at the election of the party defrauded, and when once the party has elected to abide by the contract, being aware of the fraud, he cannot afterwards rescind it”.

Nothing in the dictum above provides that a contract founded on fraudulent misrepresentation may be renegotiated. This is not to say that I accept Lawyer Addison’s claim that the Ameri deal was founded on fraudulent misrepresentation. The point is if Lawyer Addison knows that the deal was fraught with fraud, why did he travel to Dubai to renegotiate it? What did he travel to Dubai to renegotiate? The fraud?

Lawyer Addison’s committee erred when they accepted an offer from officials of Ameri to travel to Dubai either to investigate or to renegotiate the deal. The Minister of Information has said that the Energy Minister told him the Addison committee needed some documents from officials of Ameri and the latter said they can only supply those documents in Dubai. Mustapha Hamid added that the Energy Minister said government had no resources to fund the trip and so officials of Ameri elected to foot the bill.

The Attorney General has also confirmed this narrative. Lawyer Addison has rubbished this account. In effect both Mustapha Hamid and Gloria Akufo lied to Ghanaians.

Let’s even agree that the two Ministers lied and accept Lawyer Addison’s account. So here we go: Ghana has been defrauded, according to Lawyer Addison, and he was tasked to go and renegotiate with the company that defrauded Ghana in order for us to get a better deal. Now the company that defrauded us offered to pay for the ticket and hotel bills of persons contracted to go and renegotiate on behalf of Ghana and these persons gladly accepted it. Is this in itself not an inducement? That squarely puts Addison and his group in a conflict of interest situation. Whether the Addison committee traveled to Dubai to investigate or renegotiate with officials of Ameri, the committee was induced and Ghanaians cannot vouch for their credibility.