Godfred Yeboah Dame
The Permanent Court of Arbitration (PCA), has refused to constitute a panel for the hearing of an international arbitration instituted by Cassius Mining Limited against the Government of Ghana, following an objection in that regard raised by Ghana’s Attorney General, Godfred Yeboah Dame.
The decision was contained in a letter dated March 30, 2023 and addressed to the parties in the matter.
Cassius Mining Limited, on February 3, 2023, filed a United Nations Commission on International Trade Law (UNCITRAL) arbitration against Ghana, accusing the state of unfair treatment and breaches of Ghana’s mining laws and due process in failing to extend the term of the company’s Prospecting Licence Agreement, after Cassius Mining exercised its contractual right of extension.
The company claimed compensation in excess of $300 million.
In its Notice of Arbitration, Cassius Mining asserted that “in accordance with Article 6.1 of the UNCITRAL Rules, the Claimant proposes that the Secretary-General of the Permanent Court of Arbitration at The Hague (PCA) serve as the appointing authority for this arbitration. The Claimant further proposes that this arbitration be administered by the PCA”.
Ghana raised a plethora of objections to the jurisdiction of the PCA in its response to the arbitration dated March 17, 2023, noting in particular, that, the claimant’s arbitration “is a legal nullity because the UNCITRAL Rules is not cognisable under the Arbitration Agreement between the parties.”
Ghana stated further that Clause 21 of the Prospecting Licence Agreement granted to the claimant provided that the arbitration is to be in “accordance with the Alternative Dispute Resolution Act, 2010 (Act 798)” and Section 5(1) of Ghana’s ADR Act is expressly “subject to the terms of the arbitration agreement.”
The UNCITRAL Rules clearly is neither a “person” nor an “institution for arbitration” contemplated by Section 5 of the ADR Act, for the dispute between the parties to be determined under them.
Ghana finally submitted that the arbitration is an abuse of the process as there is currently pending at the Ghana Arbitration Centre, another arbitration filed by the company against Ghana.
The PCA on March 20, 2023, noted that Ghana in its response, had stated that it “will raise a preliminary objection to the jurisdiction of the PCA in a bifurcated phase of the arbitration to avoid unnecessary expenditures of time and costs for the Parties and the Tribunal. For the sake of good order, the Respondent is invited to confirm that it agrees to the PCA administering this arbitration, as proposed by the Claimant.”
Ghana responded with a vehement objection to the jurisdiction of the PCA and asked the PCA in a letter dated March 27, 2023, to determine as a preliminary matter, whether the PCA has any jurisdiction or role to play in the dispute between the parties.
Ghana invited the PCA to consider many issues, including the fact that the respondent’s lack of consent to the PCA administering this arbitration, as proposed by the claimant.
Another issue is the fact that the parties’ arbitration agreement is express and explicit that the arbitration shall be “in accordance with the Alternative Dispute Resolution Act, 2010 (Act 798),” a legislation of the Republic of Ghana.
Under the said Alternative Dispute Resolution Act, the PCA is not conceived as the appointing authority for this arbitration between the parties.
The UNCITRAL Rules (which the claimant invokes through a misplaced interpretation of “person or institution” in section 5(1)(a) of the Act), is not a person or institution.
The UNICITRAL Rules apply only “where parties have agreed that disputes between them in respect of a defined legal relationship, whether contractual or not, shall be referred to arbitration under the UNCITRAL Arbitration Rules”. There is absolutely no such agreement in the dispute between the parties.
Because the UNCITRAL Rules do not apply, neither its Article 6.1 (cited by the claimant) nor any other provision thereof applies to the arbitration to ground the appointment of the Secretary-General of the PCA serve as the appointing authority for this arbitration.
In a letter to the parties dated March 30, 2023, the PCA decided that “the PCA Secretary-General may act as appointing authority under the UNCITRAL Rules if all parties so agree. The PCA understands that no such agreement has been reached in this matter”.
The PCA further decided that the applicable procedural regime, including the applicability of the UNCITRAL Rules, is a matter for the arbitral tribunal.
However, there is no arbitral tribunal for the dispute constituted since the parties have not agreed.
The effect of the decision of the PCA is that the arbitration commenced by Cassius Mining Limited cannot proceed unless both parties have agreed for the Permanent Court of Arbitration to appoint a tribunal.
Faced with this legal stumbling block at the Permanent Court of Arbitration, it remains to be seen what Cassius Mining’s next move will be.
BY Gibril Abdul Razak