ELEGANT HOMES & CONSTRUCTION LIMITED VS MRS. PATIENCE SENCHERY & ANOR
2018
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP JUSTICE KWEKU T. ACKAAH-BOAFO
Areas of Law
- Alternative dispute resolution
- Contract Law
- Civil Procedure
- Commercial Law
2018
HIGH COURT
GHANA
CORAM
AI Generated Summary
This High Court ruling by Justice Kweku T. Ackaah-Boafo addresses a motion by the Defendants to stay proceedings and refer the dispute to alternative dispute resolution under Clause 19.0 of a construction contract between Patsys Day Care Center and Elegant Homes and General Construction Ltd (EHGCL). The clause requires the parties, acting in good faith, to attempt negotiation and, if they agree, to appoint a mediator or arbitrator via the Ghana Institute of Surveyors. EHGCL completed the school project but was not paid; the parties negotiated a written payment plan on 11 November 2014, yet the Defendants made no payment. After appearing, defending, and filing witness statements, the Defendants sought a stay under the ADR Act. Distinguishing BCM Ghana, the court held that Section 6 of Act 795 makes stays discretionary, not automatic, and found no arbitrable issues or good-faith readiness to arbitrate. The application was dismissed.
i.
Introduction[1] By a motion on notice filed by Elikplim Agbemava Esq. Counsel for the Defendant/Applicant, the Applicant is seeking an order for Stay of Proceedings pending resort to Alternative Dispute Resolution by the parties on the grounds that the lawsuit is pre-mature because the parties ought to resort to alternative dispute resolution enshrined in the contract governing the transaction upon which the Plaintiff’s claim is founded.
The Applicant’s case[3] The thrust of the Defendants/Applicants’ case as set out in the affidavit accompanying the motion is that the parties executed a contract dated March 20, 2013. A copy of the contract is attached as Exhibit “EA1”. According to the deponent of the affidavit, who is Counsel for the Defendants Mr. Agbemava, Clause 19 of the contract enjoins the parties to use alternative dispute resolution mechanism as the first option to resolve any dispute arising out of the agreement between the parties to the contract before a party can resort to litigation. [4] Further, it is deposed that in this case there has not been any attempt at resolving the dispute by “any of these mechanisms by the parties before the Plaintiff commenced this action before this Honourable Court”. According to the Applicant therefore, the jurisdiction of the Court has not been properly invoked by the Plaintiff given the fact that the mandatory arbitration provision has not been complied with.
It is the case of the Applicant that “it is only just and fair that the proceedings in this matter be stayed and referred to Arbitration as originally agreed by the parties”. [5] Speaking to the motion, learned Counsel referred the court to Section 6 of the Alternative Dispute Act (ADR) and submitted that the operative issue is, is there an arbitration agreement? According to learned Counsel if there is then a reference ought to be made.
In this case, learned Counsel submitted that by operative clause 19. 0 of the agreement, this Court ought to stay proceedings and refer the matter to arbitration because in Counsel’s opinion “once there is an arbitration clause the Court should encourage arbitration”. [6] Learned Counsel referred to the Supreme Court case of BCM GHANA LTD v ASHANTI GOLDFIELDS LTD (2005-2006) SCGLR 602 and submitted most forcefully that the case establishes that once there is an arbitration clause it is automatic and mandatory for any such reference.
In the main, learned Counsel referred to the pleadings filed by both p