|
Supreme court
- supervisory jurisdiction -
Joinder – stay proceedings
–Arbitration - Proper
interpretation of statute -
Section 40(1) and (2) of the
Arbitration Act 1961 Act 38 -
Non-domestic arbitration clause
– Whether or not the High Court
assumed jurisdiction to hear the
suit which by reason of the said
Arbitration Act, the court did
not have -
HEADNOTES
In an
affidavit sworn to by one AKUA
SARPOMAA AMOAH on behalf of the
applicant herein, it does appear
that the facts culminating in
this application are not in
controversy. Dee Hones
Petroleum & Gas Ltd sued Tromso
Shipping Co. Ltd and The Vessel
M/T “MY ARCTIC” in suit №
E2/149/09 before the High Court,
Tema. Another suit was
commenced as TROMSO SHIPPING
CO. LTD V THE ENTIRE CARGO OF
9,949,799 of GAS OIL ON BOARD
THE MV “MY ARCTIC” and two
others as defendants. A third
suit was also commenced, this
time at the High Court,
Commercial Division, Accra as
suit № CGS/14/09 between MY
SHIPPING PVT LTD V CARGO OF IL
CURRENTLY CARRIED BY THE VESSEL
MY ARTCTIC, THE OWNERS AND ALL
PERSONS INTERESTED IN THE
CARGOCL and CREST GRADE OIL GAS
LTD. It is on record that
the two suits at the High Court,
Tema referred to above were
consolidated given the nature of
the facts in the two cases. The
Applicant herein whose case was
pending at the High Court
Commercial Division, Accra
successfully applied and joined
the consolidated suit at the
High court, Tema. After going
through the implementary process
pursuant to the order for
joinder, the applicant filed a
statement of defence and
counter-claimed for a
declaration that it had right
lien against the cargo of gas
oil currently on board the “MY
ARCTIC” and other ancillary
reliefs. After close of
pleadings, the plaintiff in the
consolidated cases filed an
application for directions which
was taken. The record in this
application shows that it was
subsequent to the taking of
application for directions that
the applicant filed a motion for
stay of proceedings and
referred to arbitration in
London. The application was
heard before His Lordship Offei
at the High Court, Tema on
18/12/2009 and His Lordship
dismissed the application and
proceeded to hear the
consolidated cases. The refusal
of the application to stay
proceedings and referral to
arbitration in London prompted
the applicant to mount this
application to invoke our
supervisory jurisdiction to
quash the ruling and prohibit
the judge from proceeding to
hear the consolidated
HELD
STATUTES
REFERRED TO IN JUDGMENT
Arbitration
Act 1961 Act 38
High Court
[Civil Procedure] Rules C1 47.
1992
Constitution
CASES
REFERRED TO IN JUDGMENT
BCM Ghana
Limited v Ashanti Goldfields
Limited [2005-06] SCGLR 602
Pitchers Ltd
v Plaza (Queensbury) Ltd [1940]
1 ALL ER 151
Turner &
Goudy (a firm) v Mcconnell & Or
[1985] 2 ALL ER 34 CA
Republic v
High Court Accra Ex parte Chraj
(Kwame Addo) interested party
[2003 – 04] SCGLR 312
In Re Ghana Private Road
Transport Union (GPRTU); Tetteh
v Essilfie [2001-2002]786.
BOOKS
REFERRED TO IN JUDGMENT
Aikins
Enchyclopeadia of Court Form in
Civil Proceedings stated at page
68 of volume 6 (1989 issue)
DELIVERING
THE LEADING JUDGMENT
YEBOAH, JSC:-
COUNSEL
CHARLES WILLIAM ZWENNES HUGHES
FOR THE 1ST AND 3RD
INTERESTERED PARTIES
D. K. AMELEY FOR THE APPLICANT.
______________________________________________________нннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннннн,______________
R U L I N G
______________________________________________________________________
YEBOAH, JSC:-
The supervisory jurisdiction of
this court has been invoked by
the applicant herein to quash
the ruling of the High Court,
Tema, dated the 18th
day of December, 2009 and for a
further order prohibiting the
same court from proceeding to
hear a consolidated suit
pending before it.
In an affidavit sworn to by one
AKUA SARPOMAA AMOAH on behalf of
the applicant herein, it does
appear that the facts
culminating in this application
are not in controversy. Dee
Hones Petroleum & Gas Ltd sued
Tromso Shipping Co. Ltd and The
Vessel M/T “MY ARCTIC” in suit №
E2/149/09 before the High Court,
Tema. Another suit was
commenced as TROMSO SHIPPING
CO. LTD V THE ENTIRE CARGO OF
9,949,799 of GAS OIL ON BOARD
THE MV “MY ARCTIC” and two
others as defendants. A third
suit was also commenced, this
time at the High Court,
Commercial Division, Accra as
suit № CGS/14/09 between MY
SHIPPING PVT LTD V CARGO OF IL
CURRENTLY CARRIED BY THE VESSEL
MY ARTCTIC, THE OWNERS AND ALL
PERSONS INTERESTED IN THE
CARGOCL and CREST GRADE OIL GAS
LTD. It is on record that
the two suits at the High Court,
Tema referred to above were
consolidated given the nature of
the facts in the two cases. The
Applicant herein whose case was
pending at the High Court
Commercial Division, Accra
successfully applied and joined
the consolidated suit at the
High court, Tema. After going
through the implementary process
pursuant to the order for
joinder, the applicant filed a
statement of defence and
counter-claimed for a
declaration that it had right
lien against the cargo of gas
oil currently on board the “MY
ARCTIC” and other ancillary
reliefs. After close of
pleadings, the plaintiff in the
consolidated cases filed an
application for directions which
was taken. The record in this
application shows that it was
subsequent to the taking of
application for directions that
the applicant filed a motion for
stay of proceedings and
referred to arbitration in
London. The application was
heard before His Lordship Offei
at the High Court, Tema on
18/12/2009 and His Lordship
dismissed the application and
proceeded to hear the
consolidated cases.
The refusal of the application
to stay proceedings and referral
to arbitration in London
prompted the applicant to mount
this application to invoke our
supervisory jurisdiction to
quash the ruling and prohibit
the judge from proceeding to
hear the consolidated suits.
Learned counsel for the
applicants filed three main
grounds for the application
which for sake of clarity are
reproduced as follows:
a.
The learned judge erred in law
when he ruled that the proper
interpretation of section 40(1)
and (2) of the Arbitration Act
1961 Act 38 is that, application
for stay of proceeding and
References of the matter to
arbitration must be made to the
court before a date fixed for
hearing and by this error,
assumed jurisdiction to hear the
suit which by reason of the said
Arbitration Act, the court did
not have.
b.
The learned trial judge serious
misdirected himself as to the
validity and therefore
enforceability of the said Head
Charter Party (shall Time 4 CP)
and by that misdirection assumed
jurisdiction which he clearly
did not have by reason of
section 40 of the Arbitration
Act, 1961 , Act 38.
c.
The learned trial judge erred in
law when he erroneously equated
law and jurisdictional clause
with international Arbitration
clause in contract and by this
error assumed jurisdiction which
he did not have.
It must be pointed out that all
the parties to the consolidated
suit and this application for
that matter, admit unequivocally
that there was an arbitration
clause in clear and unambiguous
terms in the Head Carter Party
out of which these cases
emerged.
The trial judge was thus called
upon to interpret the
arbitration clause and exercise
his powers under the statute to
either refer the matter to
arbitration or proceed to hear
the matter. Counsel based his
submission on the recent case of
BCM GHANA LIMITED V ASHANTI
GOLDFIELDS LIMITED [2005-06]
SCGLR 602.
He contended that the court that
is the High Court, Tema had no
option than to refer the case to
an arbitration. Contracts that
contain arbitration agreement
may take two forms; a domestic
arbitration and non-domestic
arbitration agreement. This
depends on the nature of the
agreement which may contain the
contract document.
From the nature of the agreement
which is in evidence as exhibit
“AS 2” it is quite clear that
the parties to the action had
entered into a contract which
called for a non-domestic
arbitration in case of a dispute
arising out of the contract.
This distinction has been
acknowledged by case law and
text writers. In this case,
there is no doubt whatsoever,
that exhibit “AS2” contained a
non-domestic arbitration
clause. Learned counsel
therefore relied heavily on
section 40(1) of The Arbitration
Act, Act 38 of 1961 to submit
that the learned judge was in
error by assuming jurisdiction.
Learned counsel for the
interested party argued that the
applicant took several fresh
steps to deny itself the benefit
of the arbitration.
It must, however be pointed out
that in any pending case whether
the arbitration agreement is
domestic or non-domestic, the
filing of the action and taking
steps in the action does not
oust the jurisdiction of the
High Court to hear the action.
It is the duty of the party who
wants the action to be referred
to arbitration to timeously
raise the objection by the
proper procedure provided by
law. It is also the duty of the
plaintiff who wants to proceed
with the case to convince the
court why the arbitration clause
should be disregarded to enable
the court to hear the case.
In domestic arbitration
agreement, a party served with
legal proceedings from a court
may at any time after
acknowledging service and before
filing of any pleading or taking
any other steps must apply to
the court to stay the
proceedings.
In non-domestic arbitration
agreement, which is the one
applicable in this case, the
procedure for reference to
arbitration does not appear to
be very different from the
domestic arbitration agreement.
Both require that a party who is
invoking the courts statutory
power or inherent jurisdiction
to refer the matter to
arbitration and thus stay
proceedings must not be seen as
taking fresh steps in the
action. In the case of
PITCHERS LTD V PLAZA
(QUEENSBURY) LTD [1940] 1
ALL ER 151, the defendant who
had wanted the action stayed
filed an affidavit in opposition
to resist an application for
summary judgment under Order 14
of the English rules without
filing a substantive application
for stay of proceedings.
Goddard LJ at page 156 said as
follows:
“It
seems to me that if a defendant
who is sued wants an action
stayed, he should take out a
substantive application at the
earliest possible moment”
[Emphasis ours].
Slesser CJ at page 154 was more
emphatic when he said as
follows:
“I
entertain myself no doubt
whatever that they took a step
in an action when they appeared
before the master and asked for
leave (quote their affidavit) to
defend the action….In truth
and in fact, however, a step in
action is taken when the summons
to sign final judgment was
answered by affidavit and no
application was made to stay the
action on the ground of the
arbitration clause”
(Emphasis ours)
The principle in the above case
was followed in TURNER &
GOUDY (a firm) v McCONNELL & OR
[1985] 2 ALL ER 34 CA which held
inter alia that the decision to
apply for stay of proceedings
ought to be taken promptly
before any step in those
proceedings is taken by the
defendant.
As regards a non-domestic
arbitration, the learned authors
of Aikins Enchyclopeadia of
Court Form in Civil Proceedings
stated at page 68 of volume 6
(1989 issue) as follows:
“In
the case of a non-domestic
arbitration agreement, if the
party applying for the stay has
acknowledged service and has not
delivered any pleadings or taken
any other step in the action
and if the proceedings concern
any matter agreed to be
referred, the court must grant
stay unless it is satisfied that
the arbitration agreement is
null and void or is inoperative
or incapable of being performed
or that there is in fact no
dispute between the parties with
regard to the matter referred”
However, in Ghana, the procedure
is statutorily provided under
section 40(1) of the Arbitration
Act, Act 38 of 1961 as follows:
“where a party to an agreement
to which the convention set out
in the schedule applies or a
person claiming through that
party commences legal
proceedings in a court against
any other party to the
agreement, or a person claiming
through that party in respect of
a matter agreed to be referred,
a party to those legal
proceedings may at any time
after service of the writ of
summons and before the date
fixed for hearing, apply to that
court to say proceeding”.
In our opinion, the timing of
the objection is very crucial.
A hearing of a case may take the
form of an application for
judgment in default of
appearance, default of defence
judgment on admissions, and
summary judgment under Order 14
of the High Court [Civil
Procedure] Rules C1 47. Any of
the above applications may
successfully terminate
proceedings. Hearing of a case
may also occur after application
for directions by adduction of
evidence from both parties.
In such a case in which time is
of the essence, we think that
objection to the hearing of the
case for reference to an
arbitration should be timeously
raised after appearance and not
before the date fixed for
hearing when application for
directions had been taken
pursuant to the close of
pleadings. This would in our
opinion make the interpretation
more purposive and in consonance
with business practice in an
admiralty case of such nature.
The uncontroverted evidence in a
chronological order in this
application has established that
the applicant after the joinder
as a defendant filed a statement
of defence and counter-claim on
26/10/2009. The interested
party herein on 13/10/09 filed
an application for directions
fixed for 16/10/2009. Learned
counsel for the applicant also
filed Additional Issues and
raised five contentious issues
for determination.
The application for directions,
however, was taken on 3/11/09
and the trial judge made orders
for filing and exchange of all
documents and prospective
exhibits the parties would
tender in the course of the
trial. The learned judge there
and then adjourned the case to
17th, 18th and 20th
of November 2010 for hearing on
16/11/09, the day before the
hearing of the case, learned
counsel for the applicant filed
the application to stay the
proceedings for the case to be
referred to arbitration. Given
the time the application was
field , the learned judge was
of the opinion that the
application was not promptly
made as required under section
40(1) of the Arbitration Act of
1961 Act 38. His Lordship
stated in his ruling as follows;
“Section 40 of the Act however
contains conditions precedent to
the enforcement of international
arbitration clause. The first
condition is that the applicant
may apply for stay of
proceedings at anytime after the
service of the writ of summons
and before the date fixed for
hearing”
He proceeded to conclude, by
adopting a simple approach to
interpretation of section 40 of
Act 38 and held that the
application was brought outside
the statutory period fixed by
the Act itself, and then refused
to grant the application to stay
proceedings.
It should be pointed out at this
stage that the courts would
always respect the agreement by
parties to submit their dispute
to arbitration and would not
stand in the way of the parties
desirous of adopting alternative
dispute resolution mechanism in
resolving disputes pending
before the courts.
This informed our sister
Adinyirah JSC in the BCM
GHANA LTD V ASHANTI GOLDFIELDS
LTD (supra) when she said at
page 611 as follows;
“The courts must strive to
uphold dispute resolution
clauses in agreement, which I
consider to be sound business
practice”
The courts, however, would
refrain from staying proceedings
of a pending action when the
applicant who seeks a stay of
proceedings failed to timeously
apply to the court for the stay
even though the court has an
inherent jurisdiction to stay
its own proceedings.
Another argument advanced by
learned counsel for the
applicant was the construction
placed on section 40 of the
Arbitration Act, Act 38.
According to counsel the judge
misconstructed section 40 (1)
and erroneously assumed
jurisdiction to proceed to hear
the case. On our part the
statute is plain and calls for
no interpretation. It merely
sets a statutory period for any
party to apply to a court for
stay of proceedings under the
Act. The question which had
been asked in this court on
regular basis is: whether errors
which appear on the face of the
record which do not go to
jurisdiction or render the
proceedings a nullity should
warrant our intervention by
resort to Article 132 of the
1992 Constitution?
Several authorities from the
time the case of the REPUBLIC
V HIGH COURT ACCRA EX PARTE
CHRAJ (KWAME ADDO) INTERESTED
PARTY [2003 – 04] SCGLR 312
was decided have established
conclusively that those errors
which do not nullify proceedings
should be redressed by resort to
the appellate jurisdiction of
the Court of Appeal instead of
invoking the supervisory
jurisdiction of the Supreme
Court. In this case, assuming
that the learned trial judge
misconstrued the statutory
provisions of the Arbitration
Act, Act 38 of 1961, the effect
of the error (if even it was
proved to be so) did not destroy
his jurisdiction to proceed to
hear the case. In our opinion,
resort to an appeal would have
been appropriate in this case.
In any case the mere present of
an arbitration cause in an
agreement does not oust the
jurisdiction of a High Court.
The courts duty, if an
application is made is to
consider it an in appropriate
case and make an order to stay
its own proceedings.
See IN RE GHANA PRIVATE ROAD
TRANSPORT UNION (GPRTU); TETTEH
V ESSILFIE [2001-2002] 786.
The other remaining grounds
canvassed for this application
are serious attacks on the
learned judge’s interpretation
of the Head Charter Party and
the construction placed on
International Arbitration Clause
in contract. As had been said
earlier in this opinion, the
alleged misdirection do not
themselves call for our
intervention by certiorari and
prohibition unless the orders
made are a nullity or so patent
on the record to make the orders
void.
We have examined the orders made
in the ruling of the learned
judge and we are convinced that
even if the interpretation
placed on the Head Charter Party
agreement and the International
Arbitration clauses are
erroneous, the errors could not
be said to be a nullity. The
application is thus refused for
the reason canvassed in this
opinion.
ANIN
YEBOAH
JUSTICE OF THE SUPREME COURT
S.
A. BROBBEY
JUSTICE OF THE SUPREME COURT
J.
ANSAH
JUSTICE OF THE SUPREME COURT
R.
C. OWUSU (MS)
JUSTICE OF THE SUPREME COURT
B.
T. ARYEETEY
JUSTICE OF THE SUPREME COURT
COUNSEL:-
CHARLES WILLIAM ZWENNES HUGHES
FOR THE 1ST AND 3RD
INTERESTERED PARTIES
D. K. AMELEY FOR THE APPLICANT |
