The Office of the Attorney-General has successfully defended Ghana against domestic arbitration claims totalling over GHC10 trillion, Minister for Justice Godfred Dame revealed while highlighting the significant financial stakes involved in arbitral disputes.
Speaking at the Conference of Public Sector Lawyers on Tuesday in Accra, he emphasized that poorly managed arbitral claims could potentially destabilize the Ghanaian economy.
Dame noted that “a single arbitral claim, if successful, can bring the economy of a developing country like Ghana to its knees,” pointing out that the value of arbitral claims against the Republic has exceeded US$9 billion over the past four years. He referenced specific high-profile cases, including the financial claim by ENI/Vitol against Ghana, which started at US$7 billion but was later reduced to US$915 million after Ghana’s challenge.
Other notable claims include Cassius Mining Ltd’s US$300 million claim, GCNet’s claim of over GHC4 billion (approximately US$250 million), and the recently filed Eland arbitration claim, which demands at least US$320 million.
While the ENI/Vitol claim was recently dismissed in its entirety by the international arbitration tribunal, Dame underscored the growing significance of arbitration in Ghana’s rapidly evolving business climate, where disputes are increasingly referred to arbitration due to private agreements and specific statutes.
However, he cautioned about the “glaring dangers” arbitration presents for Ghana and other developing countries. Dame called for urgent reform of laws governing arbitration and civil claims against the State, urging a critical evaluation of contract management practices.
The A-G noted that litigation is sometimes unavoidable, and the need for legal reform in state-related arbitration has become increasingly urgent, particularly given the biases African nations often face in international arbitration settings.
He stressed the need for more robust safeguards in commercial disputes involving state parties to protect the nation’s finances from potential abuse and fraud. In this context, he recalled the recently launched Ghana Alternative Dispute Resolution Centre, which he believes could serve as an effective venue for resolving substantial commercial disputes within the country.
Mr Dame has also proposed amendments to the State (Property and Contracts) Act, 1960, to ensure that all contracts involving the State stipulate Ghanaian law as the governing law, with Accra as the seat of arbitration. This would eliminate the current practice of requiring Ghana and its legal representatives to travel to foreign jurisdictions for arbitration, incurring high costs and complicating enforcement.
He reassured stakeholders that the proposed changes would not preclude international experts from participating in arbitration, explaining that international arbitration is defined not by the venue but by the parties involved and the transactions at stake.