ARBITRATION AS A FORM OF DISPUTE RESOLUTION IN GHANA
Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for an alternate dispute resolution (ADR) procedure instead of going to court or litigating. Arbitration is gaining roots in the settlement of commercial, investment and business-related disputes. Multi-national companies among other corporate entities use arbitration as compared to litigation.
In Ghana, the Alternative Dispute Resolution Act 2010 (Act 798) governs domestic arbitration proceedings. It offers rules and procedure by which the parties to the arbitration and the arbitrator should determine disputes.
An important aspect of arbitration that should be considered when invoking the process is the enforcement of awards. Parties must be sure that the final award determined at the conclusion of the arbitration by the Arbitrator is capable of being enforced in the home country where the party seeks to enforce such an award if it is an international dispute. While domestic arbitration refers to resolving dispute between parties in the same country, international arbitration resolves disputes between parties of different countries. Act 798 does not regulate foreign arbitral proceedings; however, it provides the framework for the enforcement of foreign arbitral awards in Ghana. The Act recognizes and enforces arbitral awards from countries that are parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also known as the New York Convention) or any other international convention on arbitration ratified by Ghana’s Parliament. It is important to note that an arbitral award must be enforced within six (6) years of it being made and an action to enforce an award, where the arbitration agreement is under seal must be done within twelve (12) years as per the Limitation Act 1972 (NRCD 54).
Whilst arbitration is encouraged within Ghana’s legal system, it should be noted that not all matters can be referred to arbitration. Matters involving the environment, public or national interest, and matters that border on the enforcement and interpretation of the constitution among others cannot be referred to arbitration. Matters involving the foregoing are submitted to courts of competent jurisdiction provided for under law for determination.
There are institutions that regulate and/or supervise the administration of arbitral matters. In Ghana, they include the Ghana Arbitration Centre, the Ghana ADR Hub, the Ghana Association of Certified Mediators and Arbitrators and the Marian Conflict Resolution Centre.
Parties to an arbitration are at liberty to agree on the number, qualification and procedure for the appointment of an arbitrator. The parties are able to also agree on the circumstances under which an arbitrator’s appointment can be terminated. Where the parties are unable to settle on the number of arbitrators, Act 798 provides for three (3) arbitrators. Again, where the procedure for appointing an arbitrator is not settled as between the parties each party, in the arbitration which requires the appointment of three arbitrators, shall appoint one arbitrator and the two appointed arbitrators, shall appoint the third arbitrator who shall be the chairperson.
An arbitrator must be independent and impartial. Where there is anything that is likely to raise reasonable doubt as to the independence and impartiality of an arbitrator, the said arbitrator must disclose such in writing. Where parties to a contract which provides for arbitration in the event of a dispute and a party to the said contract initiates and/or commences an action in court without resorting to arbitration first, the other party can apply to the court to have the proceedings stayed for the action to be referred to arbitration. However, if the other party files a defence to the action started in court then that party waves the right to arbitrate the action. The arbitration process is confidential and all parties to the arbitration must uphold confidentiality.
Advantages of Arbitration
- The proceeding of arbitration is private
- The parties have a choice to choose who their arbitrator unlike in litigation where parties do not choose the judge who presides over the case
- The parties rely on experts in the adjudication of the matter.
- The matter may be heard within a short period of time hence there is speed in adjudicating the matter.
- The decisions of the arbitration are final.
- The forum for the adjudication of the matter is mostly neutral.
- The procedure in the adjudication of the matter is informal.
- Cost is relative. It may be high or low depending on the matter.
- The arbitrator decides or determines the dispute in accordance with the law chosen by the parties.
Disadvantages of Arbitration
- Parties are responsible for the cost associated with venue and fees of the tribunal.
- The tribunal has limited power in making interim orders.
- The assistance of the court is need in the enforcement of awards.
According to Act 798, arbitral awards are final and binding on the parties but they can be set aside under limited circumstances such as where it is proven that the parties failed to follow the agreed procedure or that the dispute cannot be settled by way of arbitration among others. Any party who wishes to set aside an arbitral award must bring an application within three months from when the award was granted.
The enforcement of an arbitral award is effected through the court system if the losing party fails to honour the award rendered. The enforcement process generally follows the same manner as any judgment of the court. The process to enforce an arbitral award starts in the High Court by filing an application seeking the leave of the court to enforce the award.
Arbitration is a popular method of dispute resolution and will remain so for the foreseeable future. Being a private and informal procedure, it offers the parties flexibility and a means of resolving disputes in privacy, in a time efficient and less costly manner among other considerations.
BY; VIDA NARKIE ODONKOR ESQ.
Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.
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