Heiland Resources Ltd. VS Sinopec International & ORS
July 28, 2022
COURT OF APPEAL
GHANA
CORAM
- M. Welbourne (Mrs), J.A. (Presiding)
- M. Wood, (Mrs.) J.A.
- E. Baah, J.A.
Areas of Law
- Alternative dispute resolution
- Contract Law
- Civil Procedure
July 28, 2022
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
An appeal to the Court of Appeal challenged a High Court order referring a complex construction payment dispute to arbitration under clause 16 of the Lateral Line Civil Works subcontract associated with Ghana National Gas Company’s Western Corridor Gas Infrastructure Project. The Appellant subcontractor performed extensive extra works—altered pipeline routes, bridges, crossings, and soil padding—pursuant to oral and email directions from the 1st Defendant contractor acting through a 2nd Defendant, allegedly beyond the written scope. After the Appellant demanded arbitration, the Respondent objected that no written arbitration agreement covered those separate contracts; the Appellant withdrew and sued. Despite this, the High Court referred the dispute to arbitration and stayed the suit. Welbourne JA held the extra works were separate contracts without an arbitration agreement, the kompetenz‑kompetenz doctrine was inapplicable, and the Respondent waived arbitration by opposing referral. The Court of Appeal allowed the appeal, directed the case to continue in the High Court, and awarded GHȼ20,000 costs.
WELBOURNE, J. A
This is an appeal against the Ruling of the High Court dated 6th July, 2021. This case ought to ordinarily have been concluded by now if the parties were ad idem as far as the forum for dispute resolution goes whether per Arbitration or through adjudication.
It is interesting that the parties intention as stated in clause 16 of the Lateral Line Contract was to submit “all disputes” to Arbitration in accordance with Section 6 of the Ghana Arbitration Act (Act 798). What was the genesis of the dispute? The Plaintiff/Respondent/Appellant’s carried out works as a sub-contractor on the orders or requests of the 3rd Defendant/Applicant/Respondent on the project, which works were not specifically spelt out in the “Scope of Works” as detailed in the Agreement Attachment 1 of the Agreement (see page 75 of the ROA). All these works were quantified by the Respondent and according to the Appellant fully paid for by the Government of Ghana.
The logical thing was for the Respondent to pay the Appellant for the works done but was that the case? The Respondent failed and or refused to do so for a project commenced in 2013/2014 to date.
Details of these sums payable to the Appellant run into millions of US Dollars. (see pages 14- 15 and 198 of the ROA). This is the gravamen of the dispute.
On 24th July 2020, the Appellant made a Demand for Arbitration (see pages 116 to 185 of ROA) Exhibit TA10 - Stating the said claims as was subsequently spelt out in the Statement of Claim.
Interestingly, the Respondent objected to the demand for Arbitration by the Appellant on the ground that there were no separate contracts that were covered by a written Arbitration Agreement.
The Appellant on second thoughts, withdrew the Demand for Arbitration and filed a suit in court dated 20th November, 2020, where upon the Respondent made a volte face and called for the matter to be referred to Arbitration quoting clause 16 of the Lateral Line Contract on the Atuabo Gas Project.
The matter was argued by the parties before the court below and the learned judge referred the matter to Arbitration.
It is from this ruling that the Appellant has appealed on the grounds as stated below.
As an avid proponent of the Alternative Dispute Resolution mechanism and in line with the Biblical admonition in Matthew Chapter 5 verses 25-26; “(25) Settle matters quickly with your adversary who is taking you to court.
Do it while you are still together on the way, or your adversary may hand