June 16, 2022
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
This interlocutory appeal in Ghana’s Court of Appeal concerns whether the High Court properly exercised discretion to preserve part of revenues from the Sankofa offshore field pending the determination of a suit regarding alleged straddling petroleum reservoirs between Sankofa and the Afina field. The respondent, operating Afina, alleged that the accumulation extends across both blocks, a claim said to be verified by GNPC, and invoked a ministerial direction to unitize under section 34 of the Petroleum (Exploration and Production) Act, 2016 (Act 919). It sought orders compelling unitization, cooperation, accounting, and payment of any share, plus interim preservation under Order 25 Rule 2 of C.I. 47. The High Court ordered that 30% of Sankofa revenues be deposited in an interest-bearing account, later directing the Registrar to receive and invest the funds. On appeal, and after striking out the omnibus “against the weight of evidence” ground as incompetent in an affidavit-based interlocutory context, the Court of Appeal found no misdirection in the trial judge’s discretion, upheld application of preservation factors and balance of convenience, rejected arguments about unjust enrichment and accrued rights, and affirmed the order, awarding costs of GHC 10,000 against the appellant.
Baffour J.A:
INTRODUCTION
Notwithstanding the volume of records produced for this interlocutory appeal that appears to give the impression that this appeal carries within its womb complexities of factual and legal matters, on a close examination, it rather shows the narrowness of the whole appeal that revolves around the compass of the correctness or otherwise of the decision of the court below in exercising its discretion to grant an order for the preservation of funds till the final determination of the substantive claim before the High Court. The grounds upon which a court ought to exercise its discretion in granting or refusing an application for interim preservation are well-trodden and far from being novel in our jurisdiction. The parties would be referred to by the designations assigned to parties in this court on appeal as appellant and respondent.
BACKGROUND
The parties to this appeal are major players in the Ghanaian upstream petrol chemical industry. The Appellant together with 2nd defendant are parties to an agreement with the Republic and the Ghana National Petroleum Corporation (GNPC) over an area called Offshore Cape Three Block where the Oil block styled Sankofa Cenomanian was discovered to harbour hydrocarbons in commercial quantities. On the other hand the Respondent has a valid license for exploratory and production rights over a nearby field of West Cape Three Point Block 2 called the Afini field. Both oil fields share a common boundary. Claiming that petroleum accumulation of the appellant’s oil field of Sankofa extended into its own field of Afini and that both oil fields straddle each other, respondent asserted that it engaged experts who confirmed this claim. That GNPC independently verified the claim that both oil fields straddle each other and for which the Ministry of Energy also directed the parties in pursuance of section 34 of the Petroleum Production and Exploration Act, 2018, Act 919 to begin the process of unitization. The section 34 of Act 919 is to the effect that:
34(1) “Where an accumulation of petroleum extends beyond the boundaries of one contract area into one or more other contract areas, the Minister in consultation with the Commission may for the purpose of ensuring optimum recovery of petroleum from the accumulation of petroleum, direct the relevant contractors, to enter into an agreement to develop and produce the accumulation of petroleum as a single unit”.
On the other hand, what unitization is for which