Reform regime for handling arbitration in Ghana – Attorney General advocates

The Attorney General and Minister of Justice, Godfred Dame Yeboah, has emphasised the need to reform Ghana’s approach to arbitration, given the economic vulnerabilities posed by high-stakes arbitration claims.

Addressing the opening ceremony of the conference of sector lawyers at the Kempinski Gold Coast Hotel, Accra, on Tuesday, November 5, 2024, Mr. Dame reflected on recent cases where arbitration costs soared to billions of dollars.

He stressed that such claims could destabilise Ghana’s economy without diligent oversight. “A single arbitral claim, if successful, can bring the economy of a developing country like Ghana to its knees,” he noted, citing recent cases as cautionary examples.

Address risks

The AG outlined a proposal to amend the State (Property and Contracts) Act, of 1960. This amendment would mandate that contracts involving the State stipulate Ghana as the seat of arbitration and require arbitration proceedings be held at the newly launched Ghana Alternative Dispute Resolution Centre. “This reform is essential,” he stated, “to prevent unnecessary travel and costs, aligning arbitration with Ghana’s legal system and oversight.”

He called for a “more robust safeguard” in handling state-related disputes. The A-G emphasised that Ghana would still embrace international arbitration while positioning Accra as a recognized arbitration hub in Africa. This vision, he added, could enhance legal consistency, reduce unnecessary international legal expenses, and provide the state with more control over economically significant cases.

He further described the event as “long overdue,” explaining that the idea stemmed from recent legal experiences involving Ghana in international arbitration.

The A-G recounted discussions with Professor Kofi Abotsi, who served as an expert witness in a major arbitration case Ghana defended in Paris. After reviewing issues encountered during the hearing, including the far-reaching impact of public sector legal work on national interests, they agreed on the need for a gathering that would encourage coordination among public sector lawyers.

Arbitration

The A-G reflected on another key arbitration case in London involving GCNet Company Limited earlier this year, which revealed systemic weaknesses affecting Ghana’s legal service. Challenges highlighted included inefficient record-keeping, lack of inter-institutional coordination, and delayed responses to contract breaches, often exploited by defaulting entities. These issues, he argued, are hindering effective governance and underscored the need for reform.

“Article 88 of our Constitution,” he said, “provides the framework for a public legal service that can be a catalyst for Ghana’s progress.” He emphasized that this constitutional mandate demands the Attorney-General not only litigate on behalf of the state but also draft legislation, advise government organs, and prosecute crimes.

He highlighted various responsibilities, from negotiating international loans to securing state assets. The A-G insisted that Ghana’s public sector attorneys need continuous training to meet modern challenges effectively.

 Focus

A particular focus of the conference is arbitration, which he identified as a primary means of resolving disputes involving government contracts. The A-G noted that in recent years, arbitration claims against Ghana had exceeded $9 billion, presenting a severe threat to the nation’s economic stability.

He cited examples, including a $7 billion claim by ENI/Vitol, reduced to $915 million, and a $320 million claim from Eland. “A single claim, if lost, could destabilize Ghana’s economy,” he warned, calling for rigorous management of arbitration processes.

 Change

 The AG advocated changes to arbitration law, emphasizing that Ghana should serve as the governing jurisdiction in disputes involving the state. “Currently, we see arbitration hearings in foreign jurisdictions,” he said. “I have submitted a proposal to the Cabinet to amend the State (Property and Contracts) Act to mandate Ghana as the seat of arbitration in state contracts.”

Mr Dame mentioned the Ghana Alternative Dispute Resolution Centre, recently launched by President Akufo-Addo. He expressed hope that it would enhance local arbitration capabilities and reduce the costs associated with overseas litigation. He assured international stakeholders that their expertise would still be required, with Accra as the seat of arbitration.

“Addition, the conference will discuss reforms to the criminal justice system led by the Director of Public Prosecutions. The A-G’s office is also set to recruit 70 new attorneys to strengthen its team, marking the largest intake of state attorneys under President Akufo-Addo’s administration,” he added.

The AG affirmed the importance of this conference for enhancing Ghana’s legal infrastructure and called for greater collaboration among public sector legal departments. “This gathering,” he said, “is the foundation for a more coordinated and resilient public sector legal framework that meets the needs of our evolving economy.”

Reporting by Wilberforce Asare in Accra

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