A:
Background
In 2008, Ghana had the opportunity to
showcase its glorious exploits in everything football to the world. We held a
wonderful African Cup of Nations football tournament that will be remembered
for many years to come. But it seems it is not only the beautiful display of
football that will be enduring in our minds. Almost 16 years after the joy and
thrill has ended, the one lingering spectre of the show has been a never-ending
theatre of court cases[1]
and arbitration
proceedings.[2]
Of all the legal tussle that have blighted the aftermath of the otherwise
successful tournament, the most memorable was what eventually became known as
the Woyome[3]
case.
Thankfully, the then Attorney-General
,
Mr. Godfred Yeboah Dame, strived to execute the judgment the Government got in
its favour. He was successful in that endeavour.[4]
With the curtain on that illustrious legal
saga drawn to a close with the Attorney-General working tirelessly to
successfully seize Mr. Woyome’s assets in execution - and a Sole Commissioner
having previously been appointed to look into the then thriving business of
judgment debts - Ghanaians thought the African Cup of Nations tournament, 2008
(popularly called “CAN 2008”) football tournament’s ‘breach of contract’ claims
had reached it end. Boy, were we so wrong.
Like the fabled quills of the fearful
porcupine, as soon as one court case or arbitration hearing involving a CAN
2008 contract ends, another one quickly emerges on the legal scene. So it was
that in 2023, a Ghanaian company described as a “local sub-contractor” that
worked on the Ohene-Djan Sports stadium project in Accra for CAN 2008 dragged
Ghana (through Ministry of Youth and Sports) to international arbitration. The
company, called Micheletti Co. Ltd. (simply called “Micheletti”), claimed
$400,000 from Ghana for breach of contract for refurbishment work it carried on
at the Accra stadium from about 2006 up to 2008, plus general damages from
February, 2009.
In this article, the decision of the arbitration
tribunal, is discussed, and more especially, the reasons why Micheletti lost.
Also, the influence Ghana’s sovereign domestic law had on the tribunal’s
decision will be analyzed in the light of previous arbitration decisions that failed
to consider similar legal arguments urging international arbitration tribunals
to respect and apply Ghana’s domestic laws as the laws applied to particular
arbitral proceedings. For good measure, the article looks at other aspects of
the arbitration processes and procedure. For instance, with both parties being
Ghanaian (Micheletti and Ministry of Youth & Sports – represented by the
Republic of Ghana) what informed the choice of international arbitration as the
dispute resolution method in the underlying contract? Also, what might have
motivated the parties to fail to choose the seat of the arbitration
proceedings?
B:
What was Micheletti’s case against Ghana?[5]
The International Chamber of Commerce’s (ICC) flagship International Court of Arbitration has dismissed an international arbitration claim filed by a construction firm, Micheletti Co. Ltd., against the Government of Ghana. The claim was filed in May 2023 for damages for breach of contract relating to the rehabilitation of the Accra Sports Stadium.[6] In its partial award on jurisdiction, the Tribunal upheld the contention of the Attorney-General of Ghana that the arbitration proceedings were statute-barred as the action had been instituted out of the time allowed by the Limitations Act of Ghana.
The full facts are that in April 2006, the
respondent, the Government of Ghana, entered into an agreement with Waterville
Holdings (BVI) Limited to rehabilitate several sports stadia in the country in
preparation for CAN 2008. Under the agreement, the claimant, Micheletti, was
the local sub-contractor for rehabilitating the Accra Sports Stadium in Accra.
But in August 2006, the Government terminated the agreement with the main contractor
on the basis that the agreement had not received approval from Cabinet. The Government
subsequently entered into negotiations with the sub-contractors, including Micheletti,
to continue with the rehabilitation of the stadia.
The value of the work undertaken by the contractor
was certified and the Government of Ghana duly paid for all the work certified
as having been discharged. Then in 2023 Micheletti dragged Government of Ghana
to arbitration alleging that it had outstanding payments from the Government.
Therefore, Micheletti claimed, among others, special damages of $400,000, plus interest
from February, 2009 at the current Bank of Ghana forex rate plus three per cent
point till date of final payment and administrative fees and arbitral costs.
The Government’s legal representative, the
Attorney-General, denied any liability for any indebtedness. He also raised a
preliminary legal objection contending, among others, that
Micheletti’s claim, having been filed more
than 14 years after the cause of action arose, was statute-barred under
Ghanaian law, which is the substantive law of the agreement.
Therefore, Micheletti’s right to initiate any
dispute resolution mechanism for a matter bordering on breach of contract could
only be enforced within six (6) years after the accrual of the cause of action,
which occurred in May, 2009.
The Tribunal agreed to determine the
preliminary objection and the claim of the action being statute barred, first.
The Tribunal held that it had jurisdiction to deal with the claim. Secondly, the
tribunal agreed with the Government of Ghana that the claim was statute-barred
under Ghanaian law, as it was made way beyond 2015, that is, more than the six
years allowed by Ghana’s Limitation Act, 1972 (NRCD 54) which made the claim
inadmissible. Therefore, Micheletti’s claim was dismissed.
C:
Why Micheletti lost the case: Application of Limitation Act.[7]
As stated earlier, Micheletti lost its claim
because it was filed too late. For that reason, the tribunal did not have to
waste any more time to even take evidence and determine whether Micheletti
deserved to collect the $400,000 it was claiming plus interest and costs. The position
of Ghanaian law is that a party who intends to sue another person must ensure
that the cause of action is not statute-barred. Persons who intend to sue
others must know that they do not have all the time in the world to wait and
file the case at their pleasure. The law and rules of procedure require that certain
cases must be brought within certain specific time periods. Thus, it is
important for the plaintiff to consider the various limitations stipulated in
the Limitations Act.
There may be exceptions regarding the
calculation of the limitation period.
For
instance, the limitation period for suing for breach of contract is 6 years.[8]
But where the 6-year
period has passed but there is evidence that there has been communication between
the parties in which the debtor has acknowledged his indebtedness less than 6
years to the date the plaintiff intends to sue, the plaintiff can do so. In the
case of Micheletti, it could not prove any such exception showing the
Government had admitted its indebtedness or at all.
In Part II, we continue with the discussion
regarding whether Prof. Date-Bah has been vindicated on his view that domestic
laws of States must be respected by international arbitration tribunals, in
view of the decision in the Balkan Energy case.
FOOTNOTES
[1]
Reference is made to cases such as
Alfred
Agbesi Woyome v Attorney-General & Others
Suit No. RPC/152/2010, HC,
the decision of which culminated in Mr. Martin Amidu’s case against the
Attorney-General, Waterville Holding and Alfred Agbesi Woyome in the Supreme
Court case of
Amidu v Attorney General, Waterville Holdings (BVI) Ltd &
Woyome[2013-2014] 1 SCGLR 606
[2]
For instance,
Waterville Holdings (BVI)
Limited v The Attorney-General of the Republic of Ghana
, ICC Case No.
20561/
[3]
Amidu
v Attorney General, Waterville Holdings (BVI) Ltd & Woyome[2013-2014] 1 SCGLR 606
[4]
Indeed, when the defunct UT Bank put in a ‘notice of claim’ claiming to be a
mortgagee of some properties attached in execution, the Supreme Court dismissed
the claim: See:
Amidu v Attorney- General, Waterville Holdings (BVI) Ltd
& Woyome (UT Bank Ltd (Under Receivership) claimant) UT Bank (as
claimant)
alleged that, it had a mortgage over Mr. Woyome’s (3rd
defendant/judgment
debtor) properties at Trassacco Valley, Accra, and
so, those properties
could not be sold in satisfaction of Mr. Woyome’s judgment debt. The Supreme Court
held that, since UT Bank had failed to register the mortgages as required by
law, the properties were owned
by Mr. Woyome. Therefore, they were free
from any encumbrance or charge
and could be taken in execution of the
judgment against Mr. Woyome. UT
Bank’s claim to the properties was
dismissed.
[5]
This section of the article is based on the Tribunal’s decision as reported on https://www.myjoyonline.com/2006-accra-stadium-rehabilitation-icc-throws-out-micheletti-in-arbitration-against-ghana/
(accessed on 24th January, 2025)
[6]
The
ICC Tribunal composed of Sadaff Habib as the President, Shadrack Arhin and
Justin Amenuvor as members
[7]
For detailed discussion, see Francisca Serwaa Boateng, THE HANDBOOK ON CIVIL
PROCEDURE & PRACTICE IN GHANA (2023) p. 42-48
[8]
See:
Infitco Company Ltd v Frigo Ghana Ltd
[2017-2020]
2 SCGLR 335 which also
shows how to proceed with the trial when a party raises limitation in its
statement of defence and
Ghana Commercial Bank Ltd (No. 2) v Plange &
Others (No. 2); Ghana Commercial Bank Ltd
(No. 2) v Boateng & Others
(No. 2) (Consolidated) [2013-2014] SCGLR 767