C.A. NZEMA OIL AND GAS (CANOG) VS SINOPEC INTERNATIONAL PETROLEUM SERVICES LIMITED (SINOPEC) & ANOR
2017
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP JUSTICE KWEKU T. ACKAAH-BOAFO
Areas of Law
- Civil Procedure
- Contract Law
- Alternative dispute resolution
2017
HIGH COURT
GHANA
CORAM
AI Generated Summary
The Ghana High Court (per Justice Kweku T. Ackaa h-Boafo) considered an application by a Ghanaian EPC company seeking two orders: compelling the 2nd Respondent, a Ghanaian gas infrastructure operator, to submit to arbitration under the Ghana Arbitration Centre rules, and directing the Ghana Arbitration Centre to join the 2nd Respondent to arbitration already commenced against the 1st Respondent, a Ghanaian subsidiary of Sinopec Group, with whom the Applicant had an MOU and a subsequent equipment rental agreement. The Court reviewed the privity of contract doctrine and joinder standards under CI 47 and case law. Finding the 2nd Respondent not privy to the Applicant–1st Respondent agreement and noting that no exception to privity was articulated, the Court held that the 2nd Respondent’s presence was not necessary to effectually and completely determine the arbitral dispute. The application was dismissed, with costs awarded to the 2nd Respondent.
Introduction:
[1] In this application the Applicant seeks two main orders.
First, an order of this Court directed at the 2nd Respondent to submit to arbitration under the rules of Ghana Arbitration Centre and secondly, a further order directed at the Ghana Arbitration Centre to join the 2nd Respondent to the suit currently pending before the Ghana Arbitration Centre.
The Applicant’s Case[2] The facts of this case are free from complexity.
The Applicant Company is a Ghanaian –owned Company operating in the oil and gas sector specializing in engineering, procurement and construction (EPC) solutions.
It is deposed that the Applicant signed a Memorandum of Understanding (MOU) with the 1st Respondent a Ghanaian incorporated subsidiary of the Chinese state-owned Beijing-based multinational corporation, China Petrochemical Corporation, which carries on business under the name and style Sinopec Group.
According to the Applicant, the 1st Respondent also specializes in engineering, procurement and construction (EPC)activities in the oil and gas sector.
According to the Applicant pursuant to the MOU, the Applicant is to perform certain works in the early Phase Gas Infrastructure Project/Western Corridor gas infrastructure development project.
A copy of the MOU is attached as Exhibit WAA1 in this application. [3] It is the case of the Applicant that as per the MOU, the 1st Respondent entered into a prime contract with the 2nd Respondent, a Company registered and incorporated under the laws of the Republic of Ghana with the mandate to operate infrastructure required for the gathering, processing, transporting and marketing of natural resources in Ghana.
The Applicant says its confidence in entering into an agreement with the 1st Respondent was directly as a result of the agreement between the Respondents herein. [4] Further, according to the Applicant it executed an ‘equipment rental agreement’ pursuant to the MOU with the 1st Respondent in respect of Equipment and Machinery supply, Operational personnel supply and other incidental and related services.
Following the agreement, the Applicant says it purchased the requisite machinery and equipment and also entered into several agreements with third parties with aim of performing its obligations under the agreement.
The Applicant contends that after putting the said machinery, equipment and personnel to work, the 1st Respondent unilaterally and without justifiable reasons prevented the Applicant from c