Enforcement of Foreign Arbitral Awards In Ghana.

The recognition and enforcement of arbitration awards are of paramount importance for the success of arbitration in the international arena. This is well evidenced by the fact that the enforceability of awards worldwide is considered one of arbitration’s primary advantages. Unless parties can be sure that at the end of arbitration proceedings, they will be able to enforce the award, if not complied with voluntarily, an award in their form will be only a pyrrhic victory.

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) empowers a signatory country to enforce an arbitration award granted in another signatory state as though it were a court judgement of the first signatory state.

Recognizing the growing importance of international arbitration as a means of settling international commercial disputes, the Convention on Recognition and Enforcement of Foreign Arbitral Awards seeks to provide a common legislative standard for recognizing arbitration agreements and court recognition of enforcement of foreign and non-domestic arbitral awards. Thus, the recognition and enforcement of foreign and non-domestic arbitral awards is the New York Convention’s bedrock. One must therefore consider what the term “non-domestic” means. The term “non-domestic” appears to embrace awards which, although made in the state of enforcement are treated as “foreign” under its law because of some foreign element in the proceedings. An example could be applying another state’s procedural laws in the proceedings at the enforcement court where the arbitration took place.

The Convention’s principal aim is that the foreign and non-domestic arbitral awards will not be discriminated against. It obliges parties to ensure such awards are recognized and generally capable of enforcement in their jurisdiction in the same way as domestic awards. An ancillary aim of the Convention is to require courts of parties to give full effect to an arbitration agreement by requiring courts to deny parties access to Court in contravention of their agreement to refer the matter to an arbitral tribunal.

Thus far, it is significant to note that Ghana is a signatory to the New York Convention. As a signatory state, Ghana has the legal obligation to ensure the seamless enforcement of foreign and non-domestic arbitral awards within its jurisdiction. The Convention has been incorporated wholesale into Ghana’s ADR laws through the First Schedule to the ALTERNATIVE DISPUTE RESOLUTION ACT, 2010 (ACT 798) (hereinafter referred to as Ghana’s ADR Act).

Section 59 (1) of Ghana’s ADR Act establishes the Court with jurisdiction for enforcing foreign awards and the conditions precedent that ought to be demonstrated by an applicant for the enforcement of the award.

Section 59(1) of the ADR Act provides as follows:

1. The High Court shall enforce a foreign arbitral award if it is satisfied that any of the conditions listed below are met.
2. The award was made by a competent authority under the country’s laws in which the award was made.
3. A reciprocal arrangement exists between the Republic of Ghana and the country in which the award was made; or
4. The award was made under the international Convention specified in the First Schedule to this Act or under any other international convention on arbitration ratified by Parliament; and
5. The party that seeks to enforce the award has produced
6. The original award or has produced a copy of the award authenticated in the manner prescribed by the country’s law in which the award was made.
7. The agreement pursuant to which the award was made or a copy of it duly authenticated in the manner prescribed by the law of the country in which it was made or in any other form as may be sufficient according to the laws of the Republic of Ghana; and
8. There is no appeal pending against the award in any court under the law applicable to the arbitration.

Therefore, the High Court is the Court of the first instance with the jurisdiction under the Ghanaian laws to enforce foreign arbitral awards in Ghana. Having established the Court with jurisdiction, a party seeking to enforce a foreign arbitral award must demonstrate before a judge sitting at the High Court that the conditions precedent as demanded under section 59(1) of Ghana’s ADR Act have been met.

Notwithstanding the ground rules as spelt out under section 59(1), a losing party to an enforcement proceeding has within the limited grounds provided under section 59(2) and Article V, the right to challenge the enforcement of the awards in Ghana. The grounds under section 59(2) directly reflects the grounds for impeaching an award under Article V of the New York Convention. These grounds are as follows:

1. The parties to the agreement were under some incapacity, or the arbitration agreement is not valid under the law to which it was subjected, failing any such indication, under the law of the country where the award was made.
2. The losing party that is the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or otherwise unable to present his case at the arbitration proceedings.
3. The award deals with a difference not contemplated by or not falling within the terms of submission to arbitration.
4. The award contains decisions beyond the scope of the matters submitted to the arbitration.
5. The composition of the arbitral authority or the arbitral procedure was not in accordance with the parties’ agreement or failing such agreement not in accordance with the law of the country where the arbitration took place.
6. The award has not yet become binding on the parties to the agreement.
7. The award has been set aside or suspended by a competent authority of the country under the law of which that award was made.
8. The subject matter of the difference is not capable of settlement by arbitration under the laws of Ghana.
9. The recognition and enforcement of the award would be contrary to the public policy of that country.

Where any of the above grounds can be raised and successfully argued, the Court can set the arbitral awards aside. However, when none of the above grounds exists, the Court will grant leave to enforce the foreign arbitral award as if it was a judgment of the Court.

The Procedure:

The enforcement of the arbitral award is through an originating Motion on Notice to all parties to the award that must be filed at the High Court registrar seeking for leave for the enforcement of the award as a judgement of the Court. The application must be supported by an Affidavit disposing to some salient facts and specific grounds for the award’s enforcement.

Annexed to the Affidavit must be the following relevant documents:

1. a) The duly authenticated original award or a duly certified copy thereof.
2. b) The original agreement containing the arbitration clause or the Arbitration Agreement itself.

The deposed facts, as contained in the Affidavit in Support, must necessarily demonstrate and establish these elements:

1. The award has become binding on the parties.
2. The award has not been set aside or suspended by a competent authority of the country in which the award was made.
3. The arbitral tribunal has the jurisdiction to render the award.
4. That the losing party (Respondent) has failed to comply with the award voluntarily.
5. That there is no appeal against the arbitral award.

An application filed should be served on the losing party (s) by the Court connected bailiff. Once filed and served, the losing party has the right to file an Affidavit in Opposition to the motion. On hearing of the motion, the parties shall be called upon to argue their respective cases orally.

The High Court in hearing the application does not preoccupy itself with the merits of the award, but rather it seeks only to satisfy itself whether the preconditions already referred to in section 59(1) is satisfied. Once Court satisfies itself that the preconditions have been met, leave shall be granted to enforce the arbitral award.

Once the Court makes the order for leave to enforce the award, the arbitral award metamorphosis into a Judgement of the High Court ripe for enforcement. To that extent, the victorious party shall serve the losing party Notice of Entry of Judgement. This notice details out the content of the Court Judgement/Order requesting the losing party to ensure compliance with the terms of the order, on the pain that the victorious party shall have the right of invoking any of the enforcement processes as determined under the Civil Procedure Rules of Ghana (HIGH COURT (CIVIL PROCEDURE) RULES, 2004 C.I 47) such as a writ of Fieri Facias, Garnishee Orders, Charging orders, Winding up proceedings among others for the recovering of any amount due or the fulfilment of the terms of the judgement of the Court.

Legal notice:

The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your particular circumstances should always be sought separately before taking any action based on this publication.

© Legalstone Solicitors LLP