Legal Literacy

The abolition of accession and the requirement of written consent under the Alternative Dispute Resolution Act, 2010 (Act 798)

09.Dec.2019

Introduction

The Alternative Dispute Resolution Act, 2010 (Act 798) came to repeal and replace the Arbitration Act 1961 (Act 38). It was an overhaul that brought a lot of novelties into Alternative Dispute Resolution in Ghana, one of which is the strengthening of party autonomy which this article is about. This novelty is reflected in its departure from the doctrine of accession and insistence on consent in writing for court referenced ADR mechanism. Since these novelties are jurisdictional in character the need for highlighting them cannot be over-emphasised if parties and the court are to avoid void orders and nullification of their well-intentioned use of the ADR mechanism.

The Act envisions two (2) types of arbitration; one arising out of an arbitration agreement, and the other arising out of reference by the court. The former is covered by section 2(2), and the latter, section 7.

JURISDICTION TO ORDER ARBITRATION TYPE ENVISAGED BY SECTION 7 (I.E. CONSENT IN WRITING WHERE ARBITRATION AGREEMENT IS LACKING)

The only instance where the requirement of an arbitration agreement may be dispensed with is found in under section 7(1), which provides that:

“Where a court before which an action is pending is of the view that the action or part of the action can be resolved through arbitration, that court may with the consent of the parties in writing, despite that there is no arbitration agreement in respect of the matter in dispute, refer the action or any part of the action for arbitration.”

Section 7(1) of the Act 798 clearly delineates the court’s jurisdiction in referring a matter to arbitration where there is no prior consensus between the disputing parties to refer the dispute to arbitration. The section establishes that written consent is a condition precedent for the court’s jurisdiction to be exercised in this manner. The word ‘may’ before ‘with the consent of the parties’ only provides an option to the court to refer once the written consent exists. The provisions of section 7(1) suspend the power of the court to refer such matters until the written consent of the parties is obtained.  There is a marked absence of a provision in Act 38 cognate with that of section 7(1) of Act 798, with respect to instances where no arbitration agreement/clause exists; section 8 of Act 38 raises the issue of accession, but is silent on the requirement of written consent in the absence of an arbitration agreement/ clause.

The condition precedent in section 7(1) of Act 798 to refer to arbitration where a prior agreement does not exist is for ‘the consent of the parties in writing’ to be obtained failing which jurisdiction to refer would be lacking. In the case of REPUBLIC V ADU BOAHEN AND PRATT [1992-93] GBR 683 it was held at 693 per Kpegah JSC that:

“An objection to jurisdiction, when raised, is either in relation to some territorial limitations affecting the tribunal or the lack of jurisdiction affecting the subject matter of the dispute or charge (in criminal cases), or the lack of jurisdiction over the parties, or the non-existence of a condition precedent to the assumption of jurisdiction.”

In the case of THE REPUBLIC V HIGH COURT, EX-PARTE VICTOR KUMOJI [2000] SCGLR 211, the Supreme Court held that:

“It is trite learning that where a condition precedent to assumption of jurisdiction has been ignored, such assumption is null and void.”

A proper interpretation of section 7(1) shows that the jurisdiction of the court is not automatic; the court must satisfy the condition precedent which is written consent before it may be said to possess the jurisdiction to refer the matter to arbitration.

In the case of ABABIO II & ANOR V AKRO & CO, & OTHERS; RE PROPOSED BIMPONG FOREDT RESERVE (TWIFU PORTION) [1963] 1 GLR 195, the court held as follows:

“Where jurisdiction is to be conferred by consent, such consent should be express, precise and unambiguous. It must not be presumed. It does not mean that jurisdiction exists provided there is no objection.”

In the case of REPUBLIC V NII ADAMAH-THOMPSON & OTHERS; EX PARTE AHINAKWAH II (SUBSTITUTED BY) AYIKAI [2012] 1 SCGLR 379, the Supreme Court established a general rule to wit:

“Parties and/or their lawyers cannot by consent or acquiescence confer jurisdiction upon the court where the court otherwise does not have jurisdiction; see Quist v Kwantreng & Others [1961] GLR 195.”

Where a statute stipulates a procedure for the exercise of a particular jurisdiction, said procedure must be followed. Reference is no more a matter of the exercise of judicial power to promote reconciliation as the Courts Act, 1993(Act 459) has provided for in section 72. Now all ADR processes which look at arbitration are subject to act 798. Parties, Lawyers and the Judges are to be wary of section 7(1) in their zeal to resort to arbitration as part of the ADR processes.

ABOLITION OF ACCESSION AND STRENGTHENING OF PARTY AUTONOMY

The principle of party autonomy was strengthened in Act 798 to the extent that it departed from the Arbitration Act, 1961 (Act 38), where a party could be compelled to enter arbitration by reason of the fact that said party was either claiming a relief through or from a second party who had an arbitration agreement with a third party. Section 8 of Act 38 stated as follows:

 “(1) Where a party to an arbitration, or a person claiming through that pary, commences legal proceedings in court against any other party to the agreement, or a person claiming through that party, in respect of a matter agreed to be referred, a party to those legal proceedings may apply to that court to stay proceedings.

 (2) The court, if satisfied that a sufficient reason does not exist why the matter should not be referred in accordance with the agreement, and that the appellant was, at the time when the proceedings were commenced, and still remains, ready and willing to do things necessary to the proper conduct of the arbitration, may make an order staying proceedings.”

This provision which had been present in section 5 of the Arbitration Ordinance, and repeated in Act 38, was conspicuously omitted in Act 798. Using legislative history to interpret statutes is an approach which is firmly established in Ghana. It has been applied in cases like TSATSU TSIKATA V ATTORNEY GENERAL [2001-02] 2 GLR 1 AND FOSUHENE V POMAA [1987-88] 2 GLR 105. In the case of GTP V ANKUJEA [1999-2000] 2 GLR 473 CA, her Ladyship the Chief Justice, Georgina Wood, then as a Justice of the Court of Appeal, said:

“…in our jurisdiction, legislative history may also be used in interpreting statutes………. “A cardinal aid to the ascertainment of legislative intent is through the study of the history of the particular enactment” ……. “A court considering an enactment is master of its own procedure and therefore has the power, indeed the duty to consider such aspects of legislative history of the enactment as may be necessary to arrive at its meaning.”

The legislative history of “drag-along” in our arbitration laws bears out the conclusion that it does not apply in the Alternative Dispute Resolution Act, 2010 (Act 798). Arbitration statutes passed form the colonial period, through the post independence period till this Fourth Republic, are clear testimony to the assertion that ‘third party accession’ was not contemplated by Act 798, the specific law relating to Alternative Dispute Resolution (ADR) generally in referring parties to arbitration or other ADR processes. This position of section 7 is underscored by section 135 of Act 798 which defines arbitration as “the voluntary submission of a dispute to one or more impartial persons for a final and binding determination”, thereby upholding party autonomy. The voluntariness of the ADR processes is a principle which sees much repetition throughout Act 798. The absence of voluntary submission as required by Act 798 voids any move to so compel parties to arbitration and thereby denudes judges of the jurisdiction to make orders referring disputes to ADR, when said parties have not consented to do so.

CONCLUSION

The Alternative Dispute Resolution Act, 2010 (Act 798) cements the principle of party autonomy, and abolishes accession arbitration. The Act requires that arbitration clauses and/or agreements should be written, as provided in sections 2(2), (3) and (4). In the alternative, i.e. in the event that there exists no agreement for a dispute to be referred to arbitration, parties to the the dispute may consent in writing for a suit brought before a court to determine the dispute, to be referred to arbitration.  It is no longer the case that parties may be dragged along to participate in arbitral proceedings; written consent must be given by both sides to a dispute in order for the court to be cloaked with the jurisdiction to so refer a matter to arbitration. The ADR Act 798 has veritable impact on the Courts Act, Rules of Court and many other enactments where ADR processes are stipulated for dispute resolution.