General

Judge Sloss once explained, “A thing is impossible in legal contemplation when it is not practicable; and a thing is impracticable when it can only be done at excessive and unreasonable cost.” It is through the lens of Judge Sloss that I view any discussion on COVID-19 and the pandemic is continuing to have on businesses. It should be universally clear by now that a lot of things previously normal that happen in our lives and our businesses have become impossible or impractical. In my article on COVID-19 & Force Majeure last week, we quoted the Gibson Dunn Law Firm as stating, “Whether or not the contract contains a force majeure clause, the common law doctrines of impossibility or commercial impracticability may be available and legal analysis of such a claim should be conducted… the party asserting this defence will bear the burden of proving that the event was unforeseeable and truly rendered performance impossible, and the doctrine generally is applied narrowly… if an agreement does not have a force majeure or “act of god” clause, an analysis under the doctrine of impossibility or commercial impracticability, depending on the jurisdiction, may be warranted.” Last week’s article triggered some healthy discussions amongst readers and myself. That article had, as I put it, “real gems from a real lawyer and a real law firm”. Today’s article is the content of dialogues with two good friends, one being my proclaimed King of Brainstorming, and the other the man I will credit if ever I take up full-time Pan-Africanism. Foster Awintiti Akugri, the Stanbic Bank Incubator Manager and Founder of Hacklab Foundation, explores how COVID-19 could trigger commercial impracticability for contract holders. Tom Arowojolu is a Director at Mainbridge Group and CEO of Mainbridge Investment Advisory. He touches on what he calls the “Dawn of a New Reality”. Before you read it, I agree with Tom’s assertion that, in legal proceedings and within a legal framework not subject to conspiracy theories and the like, the corona virus cannot be automatically categorized as an “Act of God”.  I say this because, from a legal standpoint, the onus is on whoever is making the claim, be it Force Majeure or Commercial Impracticability, to prove the aforementioned claims. It is going to be very hard to prove that, in these times of advanced modern technology, a virus like this can only be an “Act of God” and not engineered in a lab. Enjoy the read! ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ How COVID-19 could trigger common law doctrines of Commercial Impracticability. Let me start from the national level. The COVID-19 has been so critical to the extent that governments have had to shut down certain arms of its operations in terms of economic activities as a measure to curb the spread. And this has disrupted a lot of value chains and supply chains businesses all over.  Huge sections of the Ghanaian economic community now seem to pose a threat to national security and risk defying the executive order of the President of Ghana if they go about their breadwinning activities as they are used to. So this puts businesses in some form of a shamble where they are caught between “do we fulfil the deal or do we come to a consensus to postpone whatever we may have agreed on or committed to”. And in as much as a contract is a contract, even in the absence of force majeure, some circumstances can make execution impossible or impractical. In this instance, it is an executive order of the President of Ghana, the one person of the highest authority of any economic environment putting an embargo on and limiting some business operations. This may definitely have an impact on some types of businesses and some types of contracts. Let’s take another instance. Assuming I got involved in an accident today or I got paralysed and I am unable to fulfil a certain obligation because of that incident. If I can demonstrate clearly with evidence that it is beyond my control to get my duty done as per a contract, then common law doctrines of commercial impracticabilitycould be enforced.  But again, it depends on how the contract is also drafted. There are a variety of avenues that this may end up taking. Severability Clauses may only allow the courts to void one part of the contract while keeping the other parts very much alive. [Severability Clauses might say, “If any clause, or portion of a clause, in this Agreement is considered invalid under the rule of law, it shall be regarded as stricken while the remainder of this Agreement shall continue to be in full effect”.] Also, keeping in mind that Severability Clauses potentially allow only parts of a contract to be voided, everything that’s happening with these lockdowns other COVID-19 situations do not necessarily make contracts automatically void when the common law doctrines of commercial impracticability is enforced. You may consider giving an extension to the other party or suspending the activity until both of you have agreed on something. But it also gives the right to one party to terminate the contract. This becomes the much more complex part of it, which in this circumstance is the impact of why you are writing this article right? To seek the opinions of your readers as to whether people can take advantage of these circumstances to get out of contracts. [At this point I interjected that “Advantage” is a strong word: this is more like the exploration of an option that readers requested I delve into after reading a little about it in the closing paragraph of my last article on ‘COVID-19 & Force Majeure’. Foster continued…” Ok, then let me rephrase it as this is explore considerations to taking precautions in light of the complications of COVID-19 to renegotiate contracts which they were initially tied to and now seem to have no option than to fulfil them. Most people have Force Majeure clauses in their contracts though which addresses pandemics. And technically, this is a pandemic. So terrorism, earthquakes, hurricanes, acts of governments, plagues and/or epidemics are usually what’s mentioned in Force Majeure clauses.

I’ll start with the conclusion. In conclusion, the arrival of COVID-19 will usher in a new era after coronacapitalism. It is marked by panic and greed now, evidenced by the unfathomable price hikes. But it will ultimately end up being a huge reset button for the world when widespread empathy and love for one another sets in after a painful realisation that we are all on one floating rock around one burning pile of gas. Take United States in the 60’s for example. Keep in mind that the Great Depression was actually ended by the second World War; it was not the start of it. On 29th October 1929, the US stock market crashed and was dubbed “Black Tuesday”, officially setting off the Great Depression. World War 2 ended in September 1945 when the Japanese surrendered after the US dropped atomic bombs on Hiroshima and Nagasaki. The Great Depression in 1929 followed by war just a decade after that lasted till 1945: it affected EVERYONE. It affected the rich and the poor, the big and the small, EVERYONE. For a long while now, man has been as arrogant as man. The rich and powerful think they’re indispensable. They try to squeeze margins, reduce salaries and put so much economic pressure on the masses beneath them to an extent that life gets so unbearable. For too long have far too many people in the world perpetuated an increasing affinity for dangerous and insular rhetoric all in the name of patriotism or business. BUT… There is this thing called “Suffering”, in whatever mode or manner it may present itself, and when it is right at your doorstep, it is approached differently.  After WW2, it was time to rebuild. But this time, the lesser man or employee or customer standing next to you was no longer one you cannot relate to. He wasn’t a just a statistic. You’d appreciate what one dollar or one loaf of bread can do for your fellow man when you can relate to his suffering. That is why the middle class grew during that time. People realised they have a better chance of survival TOGETHER through an understanding of suffering. They knew we can’t not live together.  After seeing all the suffering in Italy, China, after seeing citizens of the most powerful countries scramble for food and medicine, after watching videos of old people and children literally suffocating from severe implications of COVID-19, and after watching the US stock markets close to a 30% decline from mid-February highs, I think real-life challenges that keep increasing the gap between the rich and the poor like loss and famine and disease and poverty and information illiteracy and a lack of healthcare will be much less baffling now. The End. Now the intro… Our way of life as we know it is going to change. When the basic, universal form of greeting, which is the handshake, is under review and might probably be substituted, it signals some major incoming global modifications. It signals the era after coronacapitalism and it is as confusing as it is dangerous, for now. Coronacapitalism is when the toilet roll and tissue section of the supermarket is perpetually empty while the vitamins section is always stocked. Coronacapitalism is when two brothers drive around low-end stores, buying up all the hand sanitisers they can get. They put it on amazon at crazy prices, sold a few till Amazon banned them for price gouging. Now they have about over 17,000 bottles of hand sanitiser they can’t sell and they’re screwed. We all read this story. Coronacapitalism is when, last Monday, the Dow Jones Industrial Average (DJIA), an index that tracks 30 large, publicly-owned, blue chip companies trading on the New York Stock Exchange (NYSE), drops 13%, its largest point drop in history. The S&P 500 Index and the NASDAQ-100 all fell massively as well. Last week, I ordered and got delivered hand sanitiser that doesn’t sanitise. I told my wife and she laughed way too heartily. The delivered product looked like sanitiser, had that jelly feel, but did not have any alcohol in it. Yet, the label read “70% alcohol”. What on earth did I purchase? Adding to my pain, it came with a surcharge of 200% on the usual price. Coronacapitalism is when crooks see new and unique ways to rip off unsuspecting buyers because prior to all this, when it looks like hand sanitiser in a hand sanitiser bottle, it 99.99% of the time IS hand sanitiser. In the era of coronacapitalism, the unthinkable suddenly becomes reality. “Nigeria bans travellers from the US” shockingly reads well, considering, when the reverse situation just last month was “US bans travellers from Nigeria”. This period is also accompanied by confusion and an ensuing pause or inaction, which in itself is an automatic decision on your choice of response to a world that is unravelling right before your eyes.  Take the Dow loss for instance. The evident downward correction started about a month ago. Traders were in shock last Monday, understandably. The most popular adage on making money in the stock markets is “buy low, sell high”. It’s an easily graspable concept. Do you buy now when the markets are at their lowest to sell high later? What if you’re stuck with stocks you can’t sell at a profit because the markets continue to freefall? Do you dump your ill-performing stocks to cut your losses? What if the market picks up soon after? Whether you make up your mind or not, the markets remain active during the chaos.  Coronacapitalism sucks! During coronacapitalism, the hierarchy of needs isn’t turned upside down: it is reshuffled. In like sort of a game of high stakes dice within a broken Jumanji rendition, toilet paper seems to be steadily making its way to becoming legal tender in the West. A lack of informed expectations are leading many to overprepare. Maybe overpurchasing toilet roll gives the broken and afraid a sense of control over at least one part of their lives. Maybe panic buying begets panic buying; we see t-rolls being bought and we follow suit. Or maybe

There’s a reason why developed countries have the masses opting for trains day in day out. It is so essential that civilisations have spent the last two centuries perfecting its design and function, from the primitive steam locomotives to bullet trains that look like they might even be able to fly. Before I even elaborate on the railways situation in Ghana as it stands, let me offer the requisite context with which you can truly appreciate the paragraphs that consequently follow. Let’s stick to the facts. This is an opinion piece. Think of how easily accessible Kumasi, Tamale and the Northern half of Ghana is now; one flight away. My BDM proposed at the Mole National Park one weekend and was at the Tema office first thing Monday morning. The reach of our brand #RonnieIsEverywhere exploded when we started saying “if you’ll pay for the plane ticket Ronnie will come”. On my WhatsApp status, one friend of mine flaunted her passport standing by a plane. I asked if she’s travelling and she said, “it’s Kumasi, I’ll be back in town by nightfall, it’s not like I’m travelling biaaa.” Ayooo. #WeirdFlexButOk. You see, I still remember a time when going from Accra to Kumasi was “travelling”. And no, I am not that old. Now think goods, lots of goods, goods that can neither enter nor fit into one STC bus. Think heavy machinery. Think even the automobile spare parts market, Abossey Okai. Think thousands of Ghanaian youth that cannot regularly afford flights or even STC bus tickets on their income. And think of how an easy but far cheaper connection between Northern Ghana and the South (and left and right and centre and behind) can affect many parts of Ghana’s economy. Be business-minded. Think outside Greater-Accra. Think trade. Think new customers, new clientele. Think human resource. Think additional thinktank. Think of YOU as an entrepreneur and what you can do with this. This is why when I read some time ago that Ghana is set to revive its railways industry budgeting $21 billion (with a B), I screamed “YES!!!!”. It will take some time to complete BUT IT WILL HAPPEN. When it does, it will be open season for those that can see how it connects whole new markets within about half of the nation with the other half, and how it betters many existing ones. Context is now complete. Let’s dive in. I’ll stick to the facts. This is an opinion piece. History of Ghana’s railways. It’s been nearly 120 years since our British colonialists constructed the first railway lines. The colonial infrastructure made over a century ago helped shape the economic geography of Ghana. As a British colony, Ghana (then known as the Gold Coast) was developed by Europeans for Europeans. At the time, railways were considered the best mode of transportation. How else could that many produce and minerals be transported way back then. STC was not in service. The railway system of Ghana began in 1898 under the Gold Coast Civil Service, with its headquarters at Sekondi. But after the construction of the Takoradi Harbour, it was transferred to Takoradi. The purpose of the railroad was to transport minerals and crops from the mainland to the harbour, which were then shipped to Europe.  Two railway lines, built by the British in 1898-1918, were primarily established for military domination against natives or other colonial powers. But the railway also supported the extensive extraction of precious minerals and cash crop agriculture.  The first railroad, the Western line, linked the coastal town of Sekondi with the gold-rich enclaves of Obuasi and Tarkwa. It was then extended to the hinterland city of Kumasi for military domination. Mining required the transportation of heavy machinery, large quantities of firewood (or coal), and labourers from other regions. European mining companies reaped benefits through this railway system of precious minerals such as gold, bauxite, manganese, and diamonds. The second, the Eastern line, linked the capital city of Accra to the network through Kumasi, affecting the economic and spatial development of Ghanaians through integration. This railway connectivity strongly affected the production of cash crops such as coffee and cocoa. As soon as the second line opened, farmers decided to use it to transport crops, massively decreasing their transportation costs (aha!). Fun Fact: The Governorship of William E. Maxwell (1895-97) was instrumental to shaping the railway system back then, because he had previous experience in Malay State where railways were used in tin mines. In 1919, Sir Gordon Guggisberg was appointed governor of the Gold Coast. He believed that the country was capable of attaining the development levels of Europe. He undertook the advancement and extension of the railway system, built a seaport, and constructed an extensive network of roads. Guggisberg focused on promoting the growth of the economy to give Ghana a competitive advantage in the world market. His policy aimed at rapid development of the country. By the mid-1920s, rail lines covered large portions of the southern part. The expenses accounted for 31.4% of total public expenditure between 1898-1931.  Around 80% of cocoa, the country’s main export commodity, was transported through rail, making Ghana the world’s largest exporter of the crop by 1911. By 1927, cocoa amounted to 80% of Ghana’s exports. By the 1960s, railways transported nearly 2 million tonnes of freight and 8 million passengers a year. This cheaper, convenient mode of transportation was a quicker way to carry more cargo.  Why Railways The country inherited a functional railway system at the time of independence. But by the mid-1970s, the system began to see a decline due to poor management, lack of maintenance, and the competition from roads. Decades of neglect by post-independence governments have brought the sector down to its knees. As the country developed, people opted in favor of road travel and others. Currently, only about 13% of Ghana’s original networks are operational, and I use the word “operational” very conservatively.  Countries all over the world recognize the importance of an effective railway system. Ghana is