ACCORDING TO BoG, UNICREDIT HAD A HIGH PERCENTAGE OF NON-PERFORMING LOANS,”
An application filed by the Bank of Ghana (BoG) to stop a legal action challenging the revocation of the licence of uniCredit Savings and Loans Limited has been dismissed by the Accra High Court.
In a ruling yesterday, the court presided over by Justice George Koomson, described the BoG’s application for uniCredit’s legal challenge to be struck out as “misconceived”.
uniCredit was one of 23 savings and loans companies which were closed by the BoG on August 16, 2019, for being insolvent.
THE COURT, IN A RULING, DISAGREED WITH THE BOG’S POSITION AND HELD THAT THE COURT DID, INDEED, HAVE JURISDICTION TO HEAR THE CASE.
Three days after the revocation of uniCredit’s operational licence, its parent company, Hoda Holdings, filed an application for judicial review in the nature of certiorari, seeking an order from the High Court to quash the decision by the BoG.
The respondents in the said application were the BoG and its Governor.
It was the contention of the plaintiff that the BoG breached the rules of natural justice in revoking the licence.
“At no point did the respondents indicate to the company that the company had become insolvent and that the respondents’ decision to declare the company insolvent and subsequently revoke its licence is not based on any empirical fact but purely on deductions based on the deliberate creation of an extremely difficult financial situation to induce the company and its shareholders, including the applicant, to give in to the respondents’ malicious intentions,” the affidavit accompanying the application stated.
It, therefore, wanted the court to quash the decision by the BoG to revoke the licence of uniCredit.
It was also seeking “an order of interlocutory injunction restraining the respondents, their agents, assigns, privies, hirelings or otherwise howsoever described, from interfering with the operations of uniCredit Ghana Limited and to refer to the subject matter of the instant application to arbitration”.
In its response, the BoG raised the issue of jurisdiction, with a case that the High Court was not the proper forum for the legal action.
Lawyers for the BoG argued that any dispute arising out of the revocation must be determined through an arbitration process and not through the court system, as stipulated in the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
High Court has jurisdiction
The court, in a ruling yesterday, however, disagreed with the BoG’s position and held that the court did, indeed, have jurisdiction to hear the case.
Justice Koomson said Hoda Holdings properly invoked the court’s jurisdiction because the matter before the court did not involve the merits of the revocation but rather the procedural propriety of the BoG’s decision to revoke uniCredit’s operational licence.
According to him, so far as the respondent (Hoda Holdings) was alleging a breach of natural justice and had filed a judicial review application to have the decision of the BoG quashed, the court had the jurisdiction to hear it and make a determination.
The court, after dismissing the application, awarded costs of GH¢3,000 against the BoG.