Oslo chancery building case: Norway court dismisses appeal against Ghana

By a unanimous decision, the Oslo Court of Appeal, Norway composed of three Justices of Appeal, Pal Morten Andreassen, Irene Sogn and Rolf Ytrehus in a judgement on November 22, 2022, dismissed an appeal filed by Messrs. Jongsbru AS, the sellers of a property identified by the Republic of Ghana for use as a chancery building in Oslo, Norway.

The Norway Court of Appeal considered an appeal by the appellant against the judgment of the Oslo District Court (High Court) in December, 2021, dismissing its case and awarding damages and procedural costs in favour of Ghana. 

After a retrial, the Oslo Appeal Court held Ghana to be “fully acquitted of all liability” and concluded that “a purchase agreement to which Ghana was a party could not be said to have been completed between the parties”.

 The Court awarded 1.5 million Norwegian Kroner (150 000 USD) payable by the appellant to Ghana as procedural costs incurred before the Court of Appeal.

 It further ordered the appellant to pay to Ghana 1 million Norwegian Kroner (100 000 USD) as compensation for procedural costs at the High Court. 

Facts of case are that, Ghana in 2018, decided to establish an embassy in Norway. The acquisition of a chancery building, either by purchase or by a lease, was deemed to be critical to the establishment of the embassy. 

A delegation from Ghana identified a number of properties, including Sigyns Gate 3 at Frogner in Oslo, the property which is the subject matter of the litigation. 

On November 22, 2018, Ghana received an offer from Jongsbru to buy the property for 100 million Norwegian Kronner. The offer had a deadline of seven days, i.e. by November 29, 2018.

On November 29, 2018, Ghana’s Charge d’Affaires, Regina Appiah-Sam, responded to Jongsrbu’s offer in these terms: “On behalf of the Government of Ghana, Ministry of Foreign Affairs, we have the pleasure to accept the Offer with the following conditions: 

“It is a condition for the acceptance of the Offer and the final contract, that the building is without significant defects and that the renovation work is completed and performed in a satisfactory manner.”

Before take-over there is a final approval without conditions from relevant authorities for the use of the property as an Embassy. We accept that the contract shall be based on the Sem&Johnsen standard contract.” 

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 on various grounds, including a failure on the part of the sellers to satisfy the condition of a final approval from the relevant Municipal authorities in Oslo for the use of the property as an Embassy.

The sellers of the property, 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.   

On December 16, 2021, the Oslo High Court upheld Ghana’s contention that on the issue of choice of law, the competence or legal capacity of Ghanaian officials to bind the Republic of Ghana must be decided according to Ghana law. Whereas the Government of Ghana had led evidence by the Director of the Legal Directorate of the Ministry of Finance to prove the content of Ghana’s financial and procurement laws, no attempt was made by the plaintiff to rebut same. 

The Court found that Ghana’s Minister for Foreign Affairs, in accordance with section 20 of the State Property and Contracts Act of 1960, had the competence to bind Ghana in agreements involving her ministry. This authority had not been exercised in the transaction in question. Neither the Charge d’Affaires of Ghana at the time, Mrs. Appiah-Sam, nor Ghana’s lawyer, MikkelVisllie 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.

The Court further held that under Ghana law, the Public Procurement Authority must agree on the purchase of the property and the application of funds must also be approved by the Minister for Finance, before the Minister for 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. On the evidence provided by Ghana’s witnesses, this had not been done.  

Regarding the claim against Ghana’s lawyer at the time of the purported sale, the Court found that the lawyer was fully responsible for the positive contractual interest in accordance with the Contracts Act of Norway. The Court was of the view that there is a particular reason for trusting lawyers who act on behalf of clients. 

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. The Court thus ordered lawyer MikkelVislie who acted for Ghana and his insurance company, TrygForsikring to pay to Jongsbru the sum of thirty-seven million, seven hundred and twelve thousand, nine hundred and four Norwegian Kronner as compensation.

Proceedings on the appeal was conducted by the Oslo Court of Appeal from October 25-28 2022, taking evidence from the witnesses of all the parties in the matter afresh. The hearing was observed by students of the Oslo Law School as part of their practical advocacy training. 

Ghana’s Attorney-General, Mr GodfredYeboah Dame, led a team from Ghana for the hearing.

 Mrs Jennifer Lartey, Ghana’s Ammbassador to Norway, Mrs Regina Appiah-Sam, Charge d’Affairs at the time the embassy was opened, Charles Osei-Marfo of the Oslo mission, Ms Doris Brese, Ministry of Foreign Affairs and Mrs. MangowaGhanney, former Director, Legal at the Ministry of Foreign Affairs, testified as witnesses for Ghana. 

Dismissing the case of the appellant, the Oslo Court of Appeal noted that a prerequisite for the appellant’s claim was that the company had incurred economic loss as a result of Ghana’s decision not to finalise the sale. 

The court said that the appellant did not incur any such economic loss and added that on a proper application of the principles of offer and acceptance, Ghana could have withdrawn from the agreement (even if it was binding), as all conditions necessary for the performance of the contract had not been satisfied.

The Attorney-General and Minister for Justice expressed satisfaction with the outcome of the appeal and hoped that it would mark the end of the dispute.

Mr Dame explained that, under Norwegian civil procedure rules, any civil judgment of the Court of Appeal may be appealed to the Supreme Court but the hearing of the appeal is not as of right.


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