CARBON COMMODITIES DMCC v. TRUST LINK VENTUES
2021
COURT OF APPEAL
GHANA
CORAM
- LAWRENCE L. MENSAH JA (PRESIDING)
- ERIC BAAH JA
- ADJEI FRIMPONG JA
Areas of Law
- Alternative dispute resolution
- Civil Procedure
- Commercial Law
- Contract Law
2021
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
This appeal in the Ghana Court of Appeal concerns whether a party waived its contractual right to arbitrate under a clause requiring disputes to be submitted to a tribunal seated in Zurich. The respondent fish supplier sued in the High Court, Commercial Division, Accra, for nonpayment. The appellant buyer entered a conditional appearance, filed a defence (later amended to plead the arbitration clause), and counterclaimed. Both sides engaged in the Commercial Court’s pre-trial processes; settlement failed, issues were set for trial, and the appellant sought discovery and security for costs. Only thereafter did the appellant move under Section 7(5) of Act 798 to stay proceedings. Relying on Desimone Ltd v Olam Ghana Ltd, the trial judge held both parties had mutually waived arbitration by steps taken in court. On appeal, Adjei Frimpong JA affirmed that an arbitration clause does not oust court jurisdiction and found that the defence on the merits, counterclaim, discovery motions, participation in mediation, and an over three-year delay evidenced an election to litigate. The appeal was dismissed with costs to the respondent.
ADJEI FRIMPONG JA:
At the heart of this appeal lies the question of waiver of an arbitration agreement which in effect, precludes a party’s right to apply for stay of proceedings, for purposes of reference to arbitration of a matter commenced at the court.
In the trial court, it was the defendant/appellant (herein “the appellant”) who had applied to stay proceedings and have the matter referred to arbitration which application was, of course, resisted by the plaintiff/respondent (herein “the respondent”).
The events preceding the commencement of the action at the trial court are not too crucial to the determination of this appeal. Suffice it to state that the parties had a contract for the sale and supply of fish to be delivered by the respondent to the appellant.
It was not in any dispute that the contract of sale which was in writing had an arbitration clause. Attached to the affidavit of the appellant in support of the application as Exhibit “TL”, the contract contained the agreement of the parties thus; any dispute arising between them out of, or in connection with the agreement shall be submitted to an arbitral tribunal with a seat in Zurich.
Upon a claim that the appellant had defaulted in paying for the fish delivered in terms of the agreement, the respondent commenced the suit at the High Court, Commercial Division, Accra, to recover the sum due.
Upon service of the writ of summons and statement of claim on the appellant, it first caused a conditional appearance to be entered on its behalf. Without any pursuant application as expected under the High Court (Civil procedure) Rules, C.I 47 (2004) (as amended), it proceeded to file a defence with a counterclaim which was later to be amended. We shall later in this discourse, attend to the statement of defence and counterclaim as amended, in some detail. The appellant’s argument before us is mainly rooted in an averment contained therein.
Upon the processes that followed the above, pleadings closed, and in accordance with the rules applicable in the Commercial Court pursuant to Order 58 rule 4, C.I 47 (as amended), the suit was referred to a pre-trial judge to conduct a pre-trial settlement conference. Settlement however failed, following which issues for trial were agreed and set down by the pre-trial judge. The matter was subsequently referred to the Learned trial judge who ordered the parties to file their witness statements. The respondent complied with the order. The appellant who did not, i