Court of Appeal overturns GH¢2m cost against KMA

The Court of Appeal has reversed a cost of GH¢2 million awarded Freko FD Enterprise against the Kumasi Metropolitan Assembly (KMA) by a Kumasi High Court.

It explained that the ruling of the High Court did not provide the basis for the award of damages, since the company could not honour its part of an agreement.

The three-member panel of the court, sitting last Tuesday, explained that the plaintiff respondent company (Freko FD) had failed to discharge its responsibilities under a Build, Operate and Transfer (BOT) contract to construct a number of public toilets across the Kumasi Metropolis.

It said the respondent company breached the agreement under the contract, and upheld KMA's right to walk out of the contract.

In 2000, Freko FD was contracted to construct more than 60 toilet facilities across Kumasi in six months, under a BOT agreement, but failed to honour its part of the deal.

The court indicated that Freko FD built only 20 of the said facilities after the agreed six months period, contrary to the terms, making the KMA disregard the agreement and take over the facilities, after Freko had failed to account for the proceeds from operating the facilities for 10 years.

According to the court, Freko FD Enterprise is only entitled to the actual cost of the construction of toilet facilities, which had not been made known under the circumstances.

The Appellate Court also awarded a cost of GH¢10,000 against Freko FD Enterprise, after it had rejected GH¢8 million damages ordered by the trial court for purported wrong termination of contract.

The KMA has, thus, cleared one legal hurdle in the face of a mounting judgment debt of over GH¢50 million accumulated over the years.

From Sebastian R. Freiku, Kumasi