Attorney-General and Minister for Justice, Godfred Dame, has indicated the need for reforms in the laws governing arbitration in Ghana, warning that poorly managed arbitral claims could lead to significant economic repercussions.
Speaking at the Conference of Public Sector Lawyers on Tuesday in Accra, he highlighted the staggering value of arbitral claims filed against the government, which has exceeded US$9 billion over the past four years. He stated, “A single arbitral claim, if successful, can bring the economy of a developing country like Ghana to its knees.”
Dame pointed to several high-profile cases, including the ENI/Vitol financial claim against Ghana, which was initially valued at US$7 billion but was reduced to US$915 million after a challenge by the government. Other notable claims include Cassius Mining Ltd’s demand for approximately US$300 million and GCNet’s claim exceeding GHC4 billion (around US$250 million). He also mentioned the recently filed Eland arbitration claim, which seeks at least US$320 million.
He underscored the importance of diligent management of these claims, stating that the Office of the Attorney-General has successfully defended domestic claims exceeding GHC10 trillion against the State. With the evolving business climate and increasing reliance on arbitration for dispute resolution, Dame warned that “certain glaring dangers” associated with arbitration need to be addressed.
The Attorney-General called for a comprehensive review of the laws governing arbitration and civil claims against the State, stressing the necessity of improving contracting and contract management practices. He pointed out that companies often succeed in international arbitration cases without establishing claims in domestic courts, primarily due to the nature of international arbitration, which tends to favor secrecy and flexibility.
While he acknowledged the importance of international arbitration, Dame called for robust safeguards in commercial disputes involving state parties to protect the nation’s finances. He referenced the recently launched Ghana Alternative Dispute Resolution Centre as a potential venue for resolving high-stakes commercial disputes involving the nation’s resources.
To strengthen Ghana’s position in arbitration, the Attorney-General has proposed amendments to the State (Property and Contracts) Act of 1960, which would require all contracts involving the State to specify Ghanaian law as the governing law and designate the ADR Centre in Accra as the arbitration venue. This move aims to eliminate the costly practice of traveling to foreign jurisdictions for arbitration.
Dame assured stakeholders that international experts would still have a role in arbitration cases involving Ghana, affirming that the essence of international arbitration lies in the parties and the underlying transactions rather than the venue itself.