CAN JUDGMENT DEBTS SERVE AS CATALYST FOR RAPPROCHMÉNT ON
USING GHANA AS CENTRE FOR COMMERCIAL DISPUTE RESOLUTION?
By Saeed
Musah-Kaleepha
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".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.
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.