Resolving Contract Disputes in Ghana

CAN JUDGMENT DEBTS SERVE AS CATALYST FOR RAPPROCHMÉNT ON USING GHANA AS CENTRE FOR COMMERCIAL DISPUTE RESOLUTION? 

By Saeed Musah-Kaleepha

I will appoint a Sole Commissioner to thoroughly examine the judgment debt and negotiated settlements conundrum and recommend for immediate implementation, legislative and systems remediation. The overall purpose should be to refashion and systematise the procedures for negotiating, contracting, executing, monitoring and resolving disputes involving business transactions where government is a party. In particular, Ghanaian fora must be the primary venue for the resolution of disputes over contracts that are performed in Ghana.

That was President John D. Mahama in his Critical Policy Actions, September 4, 2012. He expresses the need to purge government of the numerous judgment debts and in his words "negotiated settlements conundrum".

This write-up is meant to welcome the President's call in part and also to take the call a step further from a practitioner's perspective.

The very fact that business agreements are signed and executed means there is a possibility that differences might arise over those contracts. They may not necessarily be disputes but in some cases lack of clarity on aspects of the contract would mean the parties might require assistance in establishing such clarity. It is for this reason that parties include dispute resolution clause or an arbitration clause, by whatever name called, in their contract documents.

Over the years Ghanaian/state officials have demonstrated their preference, perhaps by deed, for choosing a foreign forum for the resolution of commercial disputes involving the Government of Ghana. The widely patronised of such institutions are the London Court of Arbitration, the Permanent Court of Arbitration in the Hague and the Arbitration Centre of the International Chamber of Commerce (ICC) based in Paris among others.

The implication is that both parties will have to travel to these locations with their documents, counsel and support staff. And worse of all hire foreign lawyers to represent them if they are to be represented by counsel since in most of those jurisdiction, our lawyers do not have license to practice there. Two cases or narrations give us a good picture of this phenomenon.

First, when Mr. Theophilus Cudjoe, former Executive Director of the Serious Fraud Office (SFO) [now Economic and Organised Crimes Office (EOCO)], appeared before the Public Accounts Committee of Parliament to answer questions relating to the CP judgment debt case, he said he had to carry four boxes of documents to London whenever they had to go for a hearing on the matter before the arbitral tribunal. 

In the second case we are told by former President Kufuor that in the Vodafone case, the Government of Ghana had to engage the services of a UK lawyer, a Queens Counsel (QC) for that matter, to represent the republic at the rate of about five hundred pound sterling per hour. This probably does not include other incidental costs.

These and several other inconveniences are some of the daily experiences for both corporate and private interests who have issues that has to be resolved in the corporate arena.

In January this year, this author was engaged by an institution in Ghana to provide some training services and the contract document states that all disputes shall be resolve at the International Chamber of Commerce with Ghana as the place for hearing. The author immediately requested that aspect of the contract to be revised and his preference for a resolution under Ghana's Act 651 was accepted. One would imagine what will happen to many others who sign similar contracts with that institution with such a dispute resolution clause. Truth is, the contract sum can hardly pay for the fees of the panel, travel and other incidental costs.

This brings us to the issue of using a foreign forum with Ghana as the place for arbitration. At least one state institution in the regulatory sector is reported to have adopted this practice because of certain challenges it encountered in earlier cases including fees, choice of law and procedure.

There however two pieces of legislation that seem to give foreign investors some latitude in the choice of forum for the resolution of disputes with the Government of Ghana. These are the Free Zones Act and the Ghana Investment Promotions Act. Section 32(3) of the Free Zones Act, 1995 (Act 504) provides "[w]here in respect of any dispute, there is disagreement between the licensee and the Government as to the method of dispute settlement to be adopted, the choice of the licensee shall prevail." This is an almost verbatim quotation of section 29(3) of the Ghana Investment Promotions Centre Act, 1994 (Act 478) except for the replacement of the word 'investor' with the word 'licensee'. These two laws provide that where government is party to a trade dispute involving a foreign company, the dispute can be resolved either in accordance with the rules of procedure of the United Nations Commission on International Trade Law (UNCITRAL), or within the framework of any bilateral or multilateral agreement between Ghana and the country that the foreign party is a national or in accordance with any national or international machinery for the settlement of investment disputes as agreed by the parties.

It is recognised that governments' attempt to promote investment by creating a congenial investment or business climate. Such a climate must of necessity extend to both the local investor and the foreign investor whether that investor is in partnership with government or in partnership with other private citizens. Therefore while section 32 of Act 504 and section 29 of Act 478 have sought to promote 'amicable settlement' of commercial disputes, this resolve has been bolstered by the Alternative Dispute Resolution (ADR) Act, 2010 (Act 798), which in itself has replaced the good old Arbitration Act, 1961 (Act 38). And most importantly the ADR Act has also accommodated the New York Convention which is essentially meant for the recognition of foreign arbitral awards.

The global trend for promoting the resolution of commercial disputes locally is through the establishment of local dispute resolution centres. Though there exists the Ghana Association of Chartered Mediators and Arbitrators (GHACMA) and other ADR agencies their presence can be very much felt if there is greater collaboration between players in commerce and industry and government agencies.

Another trend is the establishment of dispute resolution centres under the national chambers of commerce. Such an establishment carries with it the respect of the chamber of commerce and serves as a rallying ground for all business interests. Key examples are the Arbitration Institutes of the Stockholm Chamber of Commerce (SCC) and the Finland Chamber of Commerce. And it is the case in Bulgaria, Russia, Bombay, Oslo and Hamburg among others. The Canada Chamber of Commerce however has a national committee that operates under the ICC rules. One is almost certain that GHACMA and as the leading ADR institution in Ghana and other ADR agencies will be more than willing to partner in any effort meant to establish a dispute resolution centre in Ghana just as they lent their support in the establishment of the Court -Connected Mediation of the Judicial Service of Ghana.

While the President's call renews hope among the dispute resolution fraternity, it is expected that any effort to resolve disputes in Ghana may have to be the use of a non-state forum since parties (especially foreign parties) have fears of bias in favour of the state alongside the effect of being infected with the delays, bureaucracy and sometimes inefficiencies of the public sector. These are debilitating factors which motivates (Alternative) Dispute Resolution practitioners to often profess the need for the establishment of non-state justice systems.

In this regard the key first step, is to empower the existing ADR instituions and collaborate more effectively with the Ghana National Chamber of Commerce and Industry (GNCCI) and other chamlbers of commerce in Ghana. Then we can begin to expect that some progress will be made especially in terms of the dispute resolution clauses that are fist of all contained in contract documents which can be made to reflect an intent to have issues resolved in Ghana

Significantly, one factor that influences the choice of forum is the institutional arrangement that exists to ensure professionalism and the conformity of the rules for dispute resolution in line with globally accepted standards before even consideration is given to the choice of arbitrator or mediator that is empaneled to handle the matter.

Finally, there is also the need to develop dispute resolution services for different professions to make room for the nuances and usages of those trades and institutions. Indeed in the UK for instance, the Royal Institute of Chartered Surveyors (RICS) has a dispute resolution section which handles claims withing the built environment. And foreclosure mediation is gaining currency in the United States of America. We are already doing well with labour dispute resolution although we could be doing better if the National Labour Commission had not been a state agency.

International Trends in Mediation

International Trends in Mediation
 By Irena Vanenkova

I once had the honour to meet the first woman in Space, Valentina Tereshkova. She said something that has always stuck in my mind: “Once you have been in Space you appreciate how small and fragile the earth is”. She meant that Space is a good place to be if you want put things into perspective. So that’s where I went, in an imaginary Sputnik, when I was asked to present some thoughts on international trends in mediation at the 2012 Asian Mediation Association Annual Meeting.

From the higher vantage point, I quickly found that there are established trends, emerging trends and fads, and that no trends are established everywhere. Likewise, some emerging trends are nowhere in most places but closer to being established in others. And fads, the trends of the future, may already have achieved trend status somewhere.

Here’s a summary of my view from space and I would very much welcome your views! It is an important subject. Trend analysis is used for future-spotting and to inspire new thinking and developments. Trends keep us a step ahead, positive, young at heart.

Established trends
Of course, mediation is itself an established trend – a prevailing tendency that is gaining momentum. But what are the established trends within that established trend?

* First, I see a clear awakening of the user – especially the repeat user. It is starting to dawn on them that mediation can help get what they need: achieve goals, reduce risk, secure certainty, take less time, cost less, save face and preserve reputation. This is leading to a slow but steady shift from a supply-led field to a demand led profession.
* Second, I see a trend from passive forms of mediation to assertive practices, and from facilitative mediation to the more evaluative style.
* Third, arbitration institutions embracing mediation more enthusiastically. A quick glance at the 2012 ICC Rules of Arbitration proves the point, and there are many other examples.

Emerging Trends

Peering down at earth from orbit:
* One can see governments readying themselves for regulating this field. They are doing so because mediators and providers do not self-regulate convincingly on quality. Training and education are at sophisticated levels and the field is now starting to credential knowledge, skills and experience – some of it transparent and credible, but some of it opaque and lacking conviction. This emerging trend toward proper credentialing needs to be more sustained and established, more international and more serious and credible, to head off government regulation.
From the Sputnik, I perceived other emerging trends:
* A trend from voluntary to increasingly “mandatory” mediation, or at least, as some would say, being “robustly encouraged”. Court annexed and connected programs are increasingly common.
* Mediation advocacy skills are now becoming a clear focus area based on training.
* There are emerging trends towards hybrid forms of mediation and arbitration and a greater demand for innovative tailored processes – rather than just practicing what was originally taught.
 * Collaborative law is giving new credence to the expression Amicable Dispute Resolution, a practice area where contentious resolution forms are not even considered (at least not by the professionals in the room).
* There is an emerging trend towards deal mediation – that is, using mediators to help parties make a deal even where there is not dispute, just a desire for a better and more sustainable deal. A new notion of “counsel to the deal” is emerging.
* And I see a clear emerging trend towards gradually higher success rates as mediators become more skilled and experienced.


Fads

Fads are a bit harder to see from space because they are less widespread. A fad is more of a burst of interest, a localised bandwagon that can, perhaps, morph into a trend. Among the fads I noticed were:
* ADR providers collaborating with one another, often for the first time on a sincere, added value level.
* There is a fad for young mediator initiatives.
* Ethical codes that are backed up by enforcement mechanisms having real teeth (such as the withdrawal of credentialing in severe cases) is an encouraging fad.
* Online dispute resolution is also a fad and may well become a trend.
* Another fad, hopefully one that will quickly turn into a proper trend, is for professional mediation bodies on a national and regional basis. MSB in Australia, HKMAAL in Hong Kong, SPIDR in Nigeria, the APFM in the US – these are all the start of professional bodies at national level. The Asian Mediation Association and the European Mediation Network Initiative are examples of something similar happening regionally, inspiring the birth of the African Mediation Association


Conclusion

This trip in orbit photographing the trends is clearly all very encouraging. Mediation is maturing, and as it does so it experiments more, becomes more versatile, more credible, more respected, more trusted, and at the same time is building the foundations of a properly recognized independent profession. We need to share and develop these ideas because, by surfacing them, we build a better future for all mediation stakeholders, as well as ourselves.

Source: Kluwer Mediation Blog