Arbitration Law in Ghana
Arbitration Law in Ghana
Arbitration in Ghana is governed by both domestic legislation and international agreements. The main law regulating arbitration in Ghana is the Arbitration Act, 1961 (Act 38), which provides the legal framework for the conduct of both domestic and international arbitration. Ghana is also a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), which allows for the enforcement of foreign arbitral awards within the country.
1. Legal Framework for Arbitration in Ghana
The primary piece of legislation governing arbitration in Ghana is the Arbitration Act, 1961 (Act 38), with subsequent amendments and developments shaping the arbitration landscape. This Act provides the legal basis for both domestic and international arbitration, and it aims to create a fair and efficient system for resolving disputes through arbitration.
Key Features of the Arbitration Act, 1961 (Act 38):
Arbitration Agreement: An arbitration agreement must be in writing, and it can be part of a larger contract or a standalone document. A valid agreement must clearly indicate the parties’ intent to settle disputes through arbitration.
Scope of Arbitration: The Act covers commercial disputes and allows parties to agree to arbitrate disputes arising from civil or commercial relationships. However, certain matters, such as family law or criminal disputes, cannot be arbitrated.
Arbitration Procedure: The Act gives parties considerable flexibility in selecting the rules and procedures for arbitration. If the parties cannot agree, the arbitral tribunal has the discretion to establish the rules and procedures.
Impartiality and Independence of Arbitrators: The Act requires arbitrators to be independent and impartial, with a duty to disclose any potential conflicts of interest.
2. Key Features of Arbitration Law in Ghana
Arbitration Agreement
Written Agreement: The Arbitration Act stipulates that an arbitration agreement must be in writing. It can be part of a larger contract or be a separate document. If a dispute arises, the courts will examine the written agreement to determine whether arbitration is the agreed method for resolving disputes.
Enforceability: If one party refuses to honor the arbitration agreement, the other party can apply to the courts to compel arbitration, provided the agreement is valid.
Arbitrators
Appointment: Parties have the freedom to appoint arbitrators, and the Arbitration Act provides that the tribunal shall consist of one or more arbitrators, as agreed by the parties. If the parties fail to agree on the number of arbitrators, the courts may assist in making the appointment.
Impartiality: Arbitrators must be impartial and independent. The Arbitration Act requires arbitrators to disclose any potential conflict of interest to the parties. Failure to do so can lead to removal from the arbitration panel.
Removal of Arbitrators: If an arbitrator is unable to perform their duties or has a conflict of interest, they can be removed by the agreement of the parties or by an order of the court.
Arbitration Procedure
Flexibility in Procedure: The Arbitration Act provides flexibility in the conduct of arbitration. Parties are free to agree on the procedures to be followed. If no agreement is reached, the tribunal will have the authority to set the procedures.
Interim Measures: The Arbitration Act allows the arbitral tribunal to grant interim measures to preserve the rights of the parties, similar to those available in court procedures.
Language of Arbitration: The parties can agree on the language in which the arbitration proceedings will be conducted. If no agreement is made, the tribunal determines the language.
Place of Arbitration: The place of arbitration is determined by the agreement of the parties. If the parties cannot agree, the tribunal can choose the place of arbitration.
Confidentiality
Arbitration proceedings in Ghana are typically confidential. However, the Arbitration Act allows the parties to waive confidentiality if they agree. The terms of confidentiality apply to the proceedings, as well as the arbitral award itself.
3. Judicial Intervention
The role of the judiciary in arbitration is limited. The Arbitration Act emphasizes that courts should only intervene in specific situations:
Compelling Arbitration: If a party refuses to abide by an arbitration agreement, the other party can apply to the courts to compel arbitration.
Setting Aside Arbitral Awards: A party can apply to the court to set aside an arbitral award on limited grounds, such as:
- The arbitration agreement was invalid.
- The award was obtained through fraud or corruption.
- The award goes against public policy.
- There was a failure to observe the principles of natural justice.
Interim Court Orders: Although the arbitral tribunal can issue interim measures, the courts in Ghana also have the power to grant interim relief if requested.
4. Enforcement of Arbitral Awards
Ghana is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), which facilitates the recognition and enforcement of foreign arbitral awards in Ghana.
Domestic Awards: Domestic arbitral awards can be enforced directly by seeking exequatur (the court's recognition and enforcement of the award) if necessary. However, if a party challenges an award, the court may examine the validity and enforceability of the award.
Foreign Awards: Foreign arbitral awards that comply with the New York Convention can be enforced in Ghana. However, an award will not be enforced if it is found to contravene public policy or if it was not obtained through fair procedures.
5. Arbitration Institutions in Ghana
While there is no dominant domestic arbitration institution in Ghana, there are several institutions that provide support for the arbitration process:
Ghana Arbitration Centre (GAC): The Ghana Arbitration Centre is the primary institution in Ghana that offers arbitration services. It provides institutional support, administers arbitration, and promotes the use of arbitration for dispute resolution.
International Institutions: Parties in Ghana can also turn to prominent international arbitration institutions for assistance, such as the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), and the Permanent Court of Arbitration (PCA).
Ad Hoc Arbitration: Ghana also allows ad hoc arbitration, where parties are free to agree on their procedures and rules without using a specific arbitration institution.
6. Advantages of Arbitration in Ghana
Legal Framework: The Arbitration Act, 1961 (Act 38) provides a comprehensive and modern framework for arbitration, making it a favorable method for resolving disputes.
Flexibility: Parties have the freedom to select their arbitrators, procedures, and institutions, making arbitration a flexible and efficient dispute resolution mechanism.
International Enforcement: Ghana's adherence to the New York Convention makes it easier to enforce both domestic and international arbitral awards.
Access to Regional Arbitration: Ghana is part of the West African region, where arbitration is increasingly becoming the preferred dispute resolution method, offering access to a larger pool of experienced arbitrators.
7. Challenges of Arbitration in Ghana
Limited Infrastructure: Although Ghana has made strides in promoting arbitration, there is still limited infrastructure in the country, such as fewer experienced arbitration practitioners and institutions.
Cost: While arbitration is generally seen as more cost-effective than litigation, the involvement of international institutions and the cost of travel can still make arbitration expensive for some parties.
Enforcement Challenges: Although Ghana is a signatory to the New York Convention, enforcement of foreign arbitral awards can still face challenges, particularly in instances of conflicting public policy or procedural concerns.
Conclusion
Arbitration in Ghana is governed by the Arbitration Act, 1961 (Act 38), which provides a sound legal framework for the resolution of both domestic and international disputes. The country's adherence to the New York Convention ensures the enforceability of foreign arbitral awards, and Ghana's arbitration system is largely pro-arbitration. While the country has a growing infrastructure for arbitration, challenges such as cost and limited local expertise remain. Nonetheless, arbitration continues to be a valuable mechanism for resolving disputes in Ghana.
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