16 Mar Tieso Ghana Ltd – V – Euroget De-Investa SA (J4/34/2019) [2019] Ghasc 38 (24 July 2019)
“The parties contracted to be governed by the FIDIC Rules. These Rules provide for a dispute resolution process.”
The Plaintiff was contracted by the Defendant to put up a 160 – bed regional hospital at Wa in the Upper West Region of the Republic of Ghana. The parties contracted under the International Federation of Consulting Engineers (FIDIC) Rules (“the Rules”).
As the work progressed, the Defendant was issued invoices in tranches for work done. The Defendant refused to make payment and terminated the contract. The Plaintiff commenced an action in the High Court claiming payment for work done among others.
The Defendant applied and the matter was referred by the Court to the Dispute Adjudication Board (DAB) per the Rules. The DAB determined that the Defendant should pay a sum of money. The Defendant gave a notice of dissatisfaction to the Plaintiff before the expiration of 21 days and the High Court, per the Rules, referred the matter to international arbitration. The Plaintiff appealed the decision to refer the matter to arbitration. The appeal was dismissed by the Court of Appeal. The Plaintiff appealed to the Supreme Court and it considered three main issues:
· Whether the DAB process was an arbitration and its decision, an arbitral award?
· Whether the decision of the DAB is final and binding between the parties? and
· Whether the Court of Appeal erred in affirming the decision of the High Court to refer the dispute to international arbitration?
The Court dismissed the appeal and held as follows:
Per clause 20.4 of the FIDIC Rules, the DAB is not deemed to be acting as a panel of arbitrators. Rather, the DAB process is a pre-arbitral, intermediate expert adjudication stage and its decisions are not arbitral awards. A DAB decision becomes final and binding after 21 days, unless within the period, a notice of dissatisfaction is given by a party and/or the matter is referred to arbitration.
It is therefore incapable of adoption as a final judgment of the Court under Order 64 of the High Court Civil Procedure Rules, 2004 (CI 47).
The dispute resolution process under the FIDIC Rules provide for international arbitration as part of the attempts to reach an amicable settlement, and the Court will adhere to these steps, if the parties have agreed to be bound by a FIDIC contract.
Insight: Where parties contract under FIDIC, unless a reason to depart is given by the parties, the Court will abide by the FIDIC dispute resolution process. Further, the decisions of the Dispute Adjudication Board (DAB) only become final and binding if neither party gives notice of dissatisfaction before the expiration of 21 days. The decision by DAB is therefore incapable of adoption as a final judgment of the Court under Order 64 of the High Court (Civil Procedure) Rules, 2004 (C.I. 47) until it becomes final and binding.”