Introduction
For many decades, arbitration has remained the mechanism of choice for the resolution of disputes between and among commercial parties. Owing to its well documented benefits – arbitration is perceived to be faster, more business-friendly, and efficient – countries have historically competed, and indeed continue to compete, through legislation, court decisions and policies to have their jurisdictions perceived as arbitration friendly.
Using Nigeria as an illustrative example, the need not to be left behind significantly accounted for the signing into law of the Arbitration and Mediation Act 2023 by former President, Muhammadu Buhari. The law, together with the decision of the Commercial Court of England & Wales in The Federal Republic of Nigeria v Process & Industrial Developments Ltd1 which led to the setting aside of the now infamous US$6.6 billion arbitral award against Nigeria, constituted some of the biggest talking points in the arbitration community not just in Nigeria but all over the world.
There were also significant developments in the arbitration space in Ghana such as the US$275 million UNCITRAL claim against Ghana by an Australian gold mining company, Cassius Mining on 3 February, which came just 4 days after the State had defeated another UNCITRAL claim by a Chinese company over a cancelled contract to build an intelligent traffic management system.
In what follows, we discuss the above and other pertinent Arbitration-related developments in Ghana and Nigeria in the year ended 2023 while also predicting the themes that are likely to drive the conversation in 2024.
Legislative Development
The Nigerian Arbitration and Mediation Act 2023
On 26 May 2023, former President Muhammadu Buhari signed into law the Arbitration and Mediation Act 2023 ("AMA") which repealed and replaced the Arbitration and Conciliation Act 1988. The signing into law of the Act marked the end of a long and arduous, but ultimately fruitful journey, that lasted more than a decade.
In a series of publications, the Templars Dispute Resolution team previously highlighted some of the innovative provisions of the AMA including the provisions on third-party funding2 ; the adoption of a liberal definition of arbitration agreement and the acknowledgment of the advances in technology by recognizing agreements contained in an electronic communication as meeting the 'in writing' requirement3 ; the abolition of the error of law on the face of the award defence4 ; the resolution of the controversy surrounding the application of limitation laws to the enforcement of arbitral awards, etc.5
Other notable provisions of the AMA include the introduction of the concept of emergency arbitration which is gaining currency in the developed world, and which permits parties in need of urgent reliefs to apply to the national courts or the designated arbitral institutions for an emergency arbitrator prior to the constitution of the arbitral tribunal.
Another innovation in the AMA is the introduction of the mechanism of award review. What the AMA has done in this regard is to provide parties with the option of approaching an award review tribunal as an alternative to national courts, to review arbitral awards.
The AMA has also eliminated what was arguably the most controversial aspect of the 1988 Act by discarding the provisions of sections 4 and 5 of the 1998 Act and replacing the two sections with a new Section 5. Just like most major national arbitral legislations, the 1988 Act provided for the powers of the national courts to stay their proceedings in respect of a dispute which is the subject of an arbitration agreement. For reasons no one was able to rationalize for 35 years, the 1988 Act made provisions for this in two separate sections, sections 4 and 5. Predictably, this was a recipe for confusion that the courts continue to grapple with to date. Thankfully, the AMA has now settled that controversy by simply adopting the language of Article II (3) of the New York Convention which simply provides that a court, before which an action is brought in a matter which is the subject of an arbitration agreement, shall refer the parties to arbitration unless it finds that the said agreement is null and void, inoperative or incapable of being performed.
What this means is that the conditions in section 5 of the 1988 Act for the grant of the stay of proceedings, including the requirement that the applicant must be ready and willing to do all things necessary to the proper conduct of the arbitration, which the courts elevated to onerous levels in a number of cases6 no longer form part of the new regime. This is also the case with the equally controversial phrase, "before taking any other step" which was the subject of judicial interpretation in many cases, which has also been discarded. It now remains to be seen how the courts will interpret these changes.
Case Law
Beijing Everyway Traffic and Lighting Tech Co v. Ghana
The 2023 arbitration year opened in Ghana with the news that Ghana had defeated a $55 million UNCITRAL claim by a Chinese company, Beijing Everyway Traffic and Lighting Tech Co over a cancelled contract to build an intelligent traffic management system.
The dispute arose from a US$100 million contract signed between Everyway and the Ghanian Ministry of Roads and Highways in 2012 under which Everyway was contracted to build and operate an intelligent traffic management system for the Accra Metropolitan Area including electronic traffic signals and video monitoring. In the course of the execution of the contract, Everyway allegedly issued two interim payment certificates worth US$22 million which the Ghanian government failed to pay.
In 2020, the Ghanian government informed Everyway that it had rescinded the contract and awarded the project to two other Chinese contractors, Huawei Technologies Company and the China National Import and Export Corporation. Aggrieved, Everyway filed an investment treaty claim under the auspices of UNCITRAL claiming in excess of US$55 million in damages for unlawful expropriation under the China-Ghana Bilateral Investment Treaty (BIT).
In an award issued on 30 January 2023, a three-man tribunal chaired by Greek national Stavros Brekoulakis declined to hear the claims on the basis that it lacked jurisdiction to determine the lawfulness of the alleged expropriation. The Tribunal also rejected Everyway's arguments that the Tribunal could import its jurisdiction under the mostfavoured nation clauses in other treaties.
Cassius Mining Limited v. Ghana
The same week, Ghana was hit by an UNCITRAL claim brought by an Australian gold mining company, Cassius Mining Limited alleging breach of the fair and equitable treatment standard and claiming in excess of US$275 million as damages for breach, by the State, of the 2016 Large-Scale Prospecting License Agreement entered into with the company in the gold rich Talensi District in the Upper East Region of Ghana.
Ghana originally greeted the claim with an action before the Ghanian courts seeking to injunct the constitution of the arbitral tribunal. Although Ghana indeed obtained an injunction restraining the appointment of the tribunal, the State however proceeded to nominate its party-appointed arbitrator and the tribunal was constituted in October 2023 with the appointment of the presiding arbitrator.
The tribunal held a hearing on 4 December 2023 to determine certain preliminary issues concerning the tribunal's jurisdiction and the seat of arbitration. The tribunal's decision is now being awaited.
Footnotes
1. [2023] EWHC 2638 (Comm)
6. See for instance The Owners of MV Lupex v Nigerian Overseas Chartering & Shipping Ltd (MV Lupex) (2003) 15 NWLR (Pt 844) 469 and UBA PLC v. Triedent Consulting Ltd (2023) LPELR-60643(SC).
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