ENVIRONMENTAL DEVELOPMENT GROUP LIMITED v. PROVIDENT INSURANCE CO. LTD. & ANOR

PWAMANG, JSC:-

My Lords, this case comes before us as the final appellate court of the Republic. The case stems from an agreement made on 26th June, 2003 by which the plaintiff/respondent/respondent (the plaintiff) undertook to build two hostels at Tamale Polytechnic for the 3rd defendant/appellant/appellant (3rd defendant). The plaintiff is a building contractor and the 3rd defendant is an agency of the Government of Ghana in charge of providing facilities for educational institutions among other functions. The agreement was comprehensive and spelt out the rights, duties and obligations of all the parties and stated what should happen in the event of, practically, all the known contingencies in construction projects. The agreement provided for a dispute resolution mechanism for industry experts to arbitrate any dispute that may arise. Despite all this, the parties ended up in court and the case has taken fifteen years to be brought to closure.

The facts of the case are largely documentary and its resolution ought to have consisted in applying the detailed provisions of the agreement to the facts and arriving at a decision which, in our opinion, should have taken far less judicial time than happened in this case. Also, if the alternative dispute resolution mechanism provided for in the agreement had been applied, the controversies regarding the technical aspects of the case would have been resolved by building industry experts so that any outstanding issues of pure law could then have been brought to the courts for determination. However, for reasons that do not concern us in this appeal, the court refused to grant an application for reference of the case for arbitration. But it ought to be stated, that from the record, a considerable amount of the time was used up by the parties to attempt settlement and for valuation of the works executed before the dispute arose.

My Lords, in the agreement, the cost of building the two hostels in today’s Ghana Cedis is GHS1,388,763.80 (Thirteen Billion, Eight Hundred and Eighty Seven Million, Six Hundred and Thirty Seven Thousand, Nine Hundred and Fifty Eight Cedis, Fifty Two Pesewas at the time). The contract period was fixed at eighteen months within which the plaintiff was to practically complete and hand over the works as set out in detailed drawings. There was however a provision for extension of time to be granted to the plaintiff if certain stated conditions outside the control of the plaintiff occurred and ca