The Court of Appeal has, in a unanimous decision of a three-member panel, held that the judicial review application filed before the High Court challenging the revocation of the operating license of a defunct microfinance company, TI Microfinance Limited, by the Bank of Ghana (BoG), was wrong in law.

The court, in its ruling, noted that per Section 141 of the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930), any dispute concerning the revocation of the license of an insolvent entity by the BoG should be sent to arbitration for redress.

“By the provision of the law, a party aggrieved by the decision of the Bank of Ghana and desires to seek legal redress shall resort to arbitration. Act 930 has provided a remedy for an aggrieved person to submit himself to arbitration, the applicant is enjoined by law to submit himself to arbitration. For, after all, it is the duty of the court to uphold the Acts of Parliament. It has been said that the courts are servants of the legislature in terms of construing laws passed by Parliament,” the Court of Appeal held.

Application

On October 23, 2019, the Founder of TI Microfinance Limited, Emmanuel Babuboa, filed a certiorari application at the High Court urging the court to quash the decision of the BoG to revoke the operating license of the company. It was his case that the Central Bank revoked the license of the financial company without any notice in conformity with Section 16 of Act 930.

Section 16 of Act 930 stipulates that the BoG may revoke the license of a bank or specialized deposit–taking institution if that entity had engaged in any illegality, or crime or fails to comply with the terms of the license. It, however, provides that the BoG shall exercise its powers under Section 16 only after it had served notice to the affected financial institution, but the central bank can forgo the notice in emergency situations or in the public interest.

Preliminary objection

The Bank of Ghana after being served with a judicial review application filed a preliminary legal objection for the High Court to set it aside on the basis that the application was flawed in law. On December 2, 2022, the High Court dismissed the preliminary legal objection by the BoG and awarded a cost of GH¢15,000 against the Central Bank. The BoG then appealed the decision of the High Court to the Court of Appeal.

Appeal

Making a case for the appeal, the BoG argued that it revoked the license of TI Microfinance under Section 123 of Act 930 and not Section 16. Unlike Section 16 which allows the BoG to revoke the license of a financial institution that is engaged in a crime or illegalities, Section 123 of Act 930 allows the BoG to revoke the license of a financial institution that is insolvent.

It was the case of the BoG that per Section 141 of Act 930, any entity dissatisfied with a decision of the BoG to revoke its license under Section 123 ought to resort to arbitration and not litigation.

In view of that, the BoG argued that the applicant breached Section 141 of Act 930 by resorting to a judicial review application instead of arbitration to seek redress, and therefore the High Court should not have entertained the application. “In the instant case, although the challenge is against the decision of a public institution, the statute has specifically prescribed the form for seeking redress. Thus, the respondent is disabled from circumventing the procedure set out in the Act,” the BoG argued.