Modern Ghana logo

FEATURED: Can We Blame Religion For Africa’s Economic Woes?...

11.07.2005 Football News

Contractor Drags GFA to Court

Contractor Drags GFA to Court

THE CONTRACTOR who executed the new offices of the Ghana Football Association (GFA) at the cost of ¢1.2 billion, has dragged the GFA to court to demand the final payment of the contract sum.

The legal battle was necessitated by the failure of the GFA to settle the matter out of court after they had appealed for the withdrawal of the case from court.

Currently, the GFA owes Asanduff Enterprise Limited, the contractors, to the tune of ¢141 million, being the final payment due for the refurbishment of the GFA offices.

However, the GFA claims that the work on the new offices had fallen far short of the expectation of the agreement reached with the contractor.

In a writ issued at an Accra High Court, Asanduff Enterprise Limited is seeking the recovery of the unpaid amount due it in respect of works executed on the defendants' Ridge offices, including interest on the said sum at the prevailing bank rate from July 15, 2004 to the date of payment.

The plaintiff claimed that it had entered into a contractual agreement with the GFA on February 20, 2004 for the execution of refurbishment and expansion works at the secretariat of the GFA after defendants had accepted a bid for the execution of the project.

In accordance with the terms of agreement, plaintiff held that the defendants agreed to pay, on completion and maintenance of the projects, the sum of ¢1,281,195,750 and thereafter provided a "performance bond and an Insurance guarantee."

According to Asanduff Enterprise Limited, the defendants made an advance payment guarantee of ¢300 million, which enabled it to proceed to execute the works slated to be completed within six months from February 19, 2004.

Plaintiff asserted that it secured a loan facility from NDK Financial Services Limited, which was guaranteed by Avangarde Design Services to help in the early completion of the project.

Continuously, plaintiff noted, the project was completed in July 2004 and certificates for completion of works were prepared and certified by the management consultants and upon submission of the certificates, defendants paid another ¢300 million.

Plaintiff claimed as at July 15, 2004, the value of works executed had amounted to ¢1,365,225,087.45, for which it was entitled to receive payment of less than the ¢600 million plaintiff had already received.

Plaintiff further explained that the said amount included a 5% retention sum of ¢68,261,254.37 and defendants were, by the terms of the contract, required to the sum of ¢741,802,993.08 and for that matter, defendants were indeed indebted to it.

However, after the suit had been issued against them, defendants made payments to the tune of ¢600 million, leaving an outstanding balance of ¢141,802,993.08.

Additionally, plaintiff indicated that, on account of the failure of the defendants to pay their debt to them, the debts incurred to NDK Financial Services Limited, as at October 28, 2004, increased to ¢865,661,009 and continues to attract interest.

Since November, 2004, when the plaintiff issued the writ against the GFA, the latter had not filed any defense but when the plaintiff applied for summary judgement to be given on the issue, the defendant, on July 6, 2005, came in to file its statement of defence and counterclaim in addition to an affidavit in opposition to the motion of summary judgement filed by the plaintiff.

The court has therefore fixed July 20, 2005 to give its ruling on the motion.

Opposing the summary judgement, the GFA indicated that it was agreed that plaintiff would be paid after consultants of the project, Avangarde Design Services Limited had conducted "full and final inspection of the works" and a certificate had been issued to that effect.

Defendant noticed that after being pressured to vacate their former premises and move into the refurbished offices as of February 2005, plaintiff was still working on the building, which was required to be completed within six months from the contract date.

According to the GFA, the consultants of the project had not yet conducted their final inspection. It therefore would be in contradiction of the agreement signed, to effect full and final payment to the plaintiff.

Defendant asserted that the works on it new premises had fallen short of desired expectation, adding " plaintiff had refused to remedy several defects" which were brought to his notice and only made a third party rectify the defects on the building.

In this regard, the GFA said plaintiff had no right to receive full payment for the work done, as it had not completed the work it was contracted to do.

Defendants held that it had spent an amount of ¢16,201,920 on the premises' plumbing works, which should have been done by the plaintiff.

GFA is therefore counterclaiming a declaration that plaintiff's refusal to correct the defect regarding the plumbing works was a breach of contract.