SCHOOL OF LAW

END OF SEMESTER EXAMINATIONS: SECOND SEMESTER 2021/2022

COURSE CODE: FLAW 624

COURSE TITLE: GENERAL PRINCIPLES OF ARBITRATION

ID. No: 10938891

OCTOBER 4, 2022
Table of Contents
QUESTION 1 (a) ......................................................................................................................................... 1
Introduction ............................................................................................................................................. 1
Government and State Agencies ............................................................................................................ 1
Capacity of Third Parties to Join in Arbitration Proceeding ............................................................. 1
Natural or Legal Person ......................................................................................................................... 3
QUESTION 1 (b)......................................................................................................................................... 4
QUESTION 3 .............................................................................................................................................. 7
The New York Convention ..................................................................................................................... 7
The UNCITRAL Model Law ................................................................................................................. 8
The UNCITRAL Arbitration Rules ...................................................................................................... 8
Harmonisation of Laws and Rules on International Commercial Arbitration ................................. 9
The law governing the recognition and enforcement of the arbitration agreement ..................... 9
The lex arbitri....................................................................................................................................... 9
The law governing the recognition and enforcement of arbitral awards ....................................... 9
The governing law of the contract ................................................................................................... 10
Institution or ad hoc Rules ............................................................................................................. 10
Lex Mercatoria ................................................................................................................................... 10
Soft Laws............................................................................................................................................ 10
Conclusion ............................................................................................................................................. 10
 QUESTION 1 (a)
Introduction
Parties must have legal capacity to enter a contract. It is the general rule that natural or legal persons
who have capacity to enter to any valid contract also has capacity to enter an arbitration agreement.
The test for capacity to enter into an agreement may be subjected to national laws or relevant rules
governing the arbitration agreement. Parties to arbitration agreement requiring capacity include
individuals, companies, corporations, and government agencies. There is also an issue of third-
party capacity to enter arbitration even when that third party was not signatory to the arbitration
agreement. The test for capacity varies, depending on where the party falls in the categories
mentioned above.
Lack of capacity is grounds to render an arbitration agreement void and to can lead to an arbitration
award being set aside.1

Government and State Agencies

Capacity of governments and state agencies may have to be conferred through acts of parliament.
In that case, capacity can only be conferred through documented or written approval of an
appropriate authority. One must check whether the state agency has capacity to sue and be sued.
Sometimes, in addition the capacity to sue and be sued, a state agency may be required to comply
with certain pre-conditions before it can enter in to a contract. 2

One way to ensure that a state party or agency has complied with the necessary pre-condition is to
request a written statement from the party stating that it has complied with all the necessary pre-
conditions. The Constitution of Ghana (1992) makes provision in Article 181(1) for parliament to
pass a resolution as a precondition for government to enter any contract. It provides as follows:

181(1) Parliament may, be a resolution supported by the votes of a majority of all the
members of Parliament, authorise the Government to enter into an agreement for the
granting of a loan out of any public fund or public account.

The requirement and application of Article 181(1) to international agreements is provided for in
Article 181(5). An interpretation to Article 181(5) was given in the case of The Attorney General
Vrs Balkan Energy Ghana Ltd and Others. The requirement to satisfy pre-conditions in agreements
with government and state agencies is also necessary for purposes of accountability and sometimes
as a matter of public policy.

Capacity of Third Parties to Join in Arbitration Proceeding

A third party who is not signatory to an arbitration agreement may seek to join the arbitration
proceedings because of relationship to the parties or interest in the transactions. In some

1
CIARB International Arbitration Workbook on Law, Practice and Procedure
2
Ibid

1
jurisdictions, there may be the need to pierce the veil to ascertain who the real parties to an
agreement or to compel third parties to join. However, in Ghana, the decision of the Supreme Court
in the case of Ex parte GHACEM, is that third parties cannot be compelled to join in arbitration
proceedings.3 In the said case, the Supreme Court quashed the order of the High Court joining a
non-signatory party to arbitration proceedings. The Court rejected an attempt to apply the alter ego
doctrine to a non-signatory party4. It observed that:

“arbitration agreements are voluntary decisions which are entered into by consenting
persons or corporate entities.”5

Third parties may join arbitration proceedings by provisions made through institutional rules and
by provisions made by lex arbitri

Section 4 Act 798 makes a provision that sustains an arbitration agreement, in the case of a body
corporate, in the event of a merger, or a dissolution, or in the case of a person, the death of the
person. It states as follows:

4. An arbitration agreement is not discharged by the death of the person or the dissolution
or merger of the body corporate which is a party to that agreement and it is enforceable
by or against the personal representative, liquidator, or successor of the party. 6

Some of the factors to consider for a third party to join in an arbitration include 7:

a. The parties’ common intention that the non-signatory would be bound by the arbitration
agreement.
b. Where the third party actively contributed to the conclusion of the contract containing the
arbitration agreement
c. Whether the third party has a clear interest in the outcome of the dispute
d. Whether the non-signatory is a party to the contract that is integrated with the contract
under which the dispute has arisen.

The reasons listed above are also conditions to lift the corporate veil to compel a third party to join
in arbitration.

The joinder of third parties in arbitration brings to light some issues that may be difficult to resolve,
such as those related to confidentiality, appointment of arbitrators or certain concerns relating to

3
Republic v High Court (Commercial Division, Accra) Ex parte GHACEM Ltd. (J5/29/2018)
4
Country report on local requirements for the extension of an arbitration clause to, and enforcement of an arbitral award against, a
non-signatory
5
Ex parte GHACEM
6
Alternative Dispute Resolution Act 2010, s 4
7
Lecture notes

2
an increase of the complexity, duration, and costs of the arbitration along with a potential increase
in risk of the arbitral award being challenged.

Most state laws on arbitration do not make provision for third parties to join arbitration
proceedings, which is also the case of the UNCITRAL Model Law. However, there are some
exceptions, such as the Portuguese Law, the Dutch Law, the Belgian Code Judiciaire and the
Italian Law, which expressly make provision for third parties joining in arbitration proceedings 8.

In the Portuguese case, the Voluntary Arbitration Law, approved by Law Number 63/2011, of
December 14th, makes provision for joinder of third parties to an arbitral proceeding. It grants that
only third parties bound by the arbitration agreement are allowed to join in the arbitral proceeding.
Article 36 (1) states as follows:

1 - Only third parties bound by the arbitration agreement, whether from the date of such
agreement, whether they subsequently adhered to it, are allowed to join in ongoing arbitral
proceedings based on such arbitration agreement. This adhesion requires the consent of
all parties to the arbitration agreement and may be done merely for the arbitration in
question.9

The consensual nature of arbitration is so prominent that the thought of having third parties
joining in an ongoing procedure without their consent and/or without the consent of the parties
thereof instantly appears to conflict with the principle of party autonomy which is essential
to arbitration.

Natural or Legal Person

The capacity for individuals to enter into arbitration agreement are usually the same as the capacity
to enter any valid contract. Here the factors include age and any other factor depending on the
situation at hand.

8
João Duarte de Sousa ‘Joinder of third parties in international arbitration’ (Viewpoint, 26 October 2020) <
https://www.garrigues.com/en_GB/new/joinder-third-parties-international-arbitration> accessed 12 October 2022
9
The Law on Voluntary Arbitration, Law No. 63/2011, a 36(1)

3
 QUESTION 1 (b)
Since the dispute has arisen before the parties decided to settle by arbitration, an arbitration
submission agreement will have to be prepare and signed by both parties.
I will advise that the arbitration should be conducted under an institution and I will recommend
the Ghana Arbitration Centre. Therefore, the rules to apply for the arbitration will be the Ghana
Arbitration Centre Rules. Our procedure will then be based on the rules of the Ghana Arbitration
Centre.
Article 9 of the Ghana Arbitration Centre Rules makes provision for initiation of arbitration under
submission. It states as follows:
9. Initiation under a Submission
(a) Parties to any existing dispute may commence an arbitration under these Rules by filing
at the Headquarters of the Centre two copies of a written agreement to arbitrate under
these Rules (Submission), signed by the parties.
(b) Article 7 of these Rules which deals with the contents of a Demand and Answer, the
period for filing a Reply and the payment of the appropriate administrative fee as provided
in the Fee Schedule, shall apply mutatis mutandis to a filing of a Submission under this
Article.10

The provision in Article 9(a) means that there must be a submission agreement signed by both
parties and filed to the Centre. Then Article 9 (b) would also require a Demand and Answer based
on the specifications of the Centre Rules in Article 7.
A submission agreement shall be prepared and submitted to the Centre. Here is the submission
agreement.

Agreement made this 14th day of OCTOBER, 2022, by and between FASHIONABLE
HOMES LIMITED (FHL) (“Claimant”) and APARTMENTS LIMITED (“Respondent”) 11.

1. We the undersigned parties hereby agree to submit to arbitration administered by the GHANA
ARBITRATION CENTRE under its Arbitration Rules the following present dispute in the
attached DEMAND and ANSWER statement. 12

2. A dispute has arisen between the parties concerning RENTAL PAYMENT of an apartment
leased by FHL to AL,

10
Ghana Arbitration Centre Rules, article 9
11
Sample intro from the ACICA Submission Agreement
12
Sample from Ghana ADR Hub Submission agreement template

4
3. The number of arbitrators shall be THREE (3) and they shall be appointed by the Ghana
Arbitration Centre.

4. The seat of the arbitration shall be ACCRA, GHANA

5. The arbitration shall be conducted in the ENGLISH

6. The law applicable to the substance of the dispute shall be the laws of GHANA

____________________________________ ______________________________________
CLAIMANT RESPONDENT

In addition to the submission agreement, the rules of the Ghana Arbitration Centre require the
following to be attached according to Article 7 of the Rules:

7(a) The initiating party shall give notice to the other party of its intention to arbitrate
(Demand), which notice shall contain among others a statement setting forth the
following:
(i) the name in full, description and address of each of the parties;
(ii) the nature and circumstances of the dispute;
(iii) the remedy sought, including the amount or claim involved if any;
(iv) the agreement(s) pertaining to the dispute and the arbitration agreement;
and
(v) any other documents relevant to the dispute should be annexed thereto 13

13
Ghana Arbitration Centre Rules, Article 7

5
The procedure will then continue to follow what is prescribed by the rules of the Ghana Arbitration
Centre.

6
QUESTION 3
International commercial arbitration has developed around what is commonly referred to as the
‘Three Pillars of International Arbitration,’ namely:

 The Convention for the Recognition and Enforcement of Foreign Arbitral Awards 1958
(New York Convention)
 The United Nations Commission on International Trade Law (UNCITRAL) Arbitration
Rules 1976
 UNCITRAL Model Law 1985
A In addition to these three ‘pillars’ of international arbitration there are other laws that add up to
the framework of international arbitration, these are categories of law that are applied in special or
specific instances to certain areas of arbitration and as forms auxiliary laws and guides to existing
arbitral laws. These include:

 Lex Mercatoria
 Soft laws
 Lex arbitri,
 Law of the contract – governing law
 Law of the Seat of Arbitration

and many others that this answer will explain in detail. This answer will first focus on the ‘Three
Pillars’ and then the other aspects of laws and rules that form part of the matrix of international
commercial arbitration.

The New York Convention

The New York Convention provides for the recognition and enforcement of arbitration
agreements and the enforcement of arbitration awards in the countries where it has been adopted
in the domestic laws on arbitration. The Convention is signed and ratified by 170 States including
major trading nations in the world14. The scope of the Convention in relation to the enforcement
of arbitral awards is given in Article I (1)
“1. This Convention shall apply to the recognition and enforcement of arbitral awards
made in the territory of a State other than the State where the recognition and enforcement
of such awards are sought, and arising out of differences between persons, whether
physical or legal. It shall also apply to arbitral awards not considered as domestic awards
in the State where their recognition and enforcement are sought.”

14
New State Party to the New York Convention... - News - New York Convention Guide 1958 (newyorkconvention1958.org)
(16 October 2022)

7
Article II (1) makes provision for issues regarding arbitration agreements, it states as follows:
“1. Each Contracting State shall recognize an agreement in writing under which the
parties undertake to submit to arbitration all or any differences which have arisen or which
may arise between them in respect of a defined legal relationship, whether contractual or
not, concerning a subject matter capable of settlement by arbitration.’
The New York Convention 1958 is a multilateral treaty which is binding on all states that have
ratified it. The Convention is adopted by states who are signatories to it and it comes into force
through local enactments of the states that are signatories. In Ghana, Section 59 (1) (c) makes
provision for the enforcement of foreign awards under the New York Convention 1958.
A key requirement to the enforcement under the New York Convention is whether the state where
the award was made and the place of enforcement are both signatories to the New York Convention
1958. Article III makes it mandatory for Contracting states to recognise arbitral awards as binding
and enforce them with the appropriate rules and procedure.
Despite having many states being signatories and ratifying it, the New York Convention 1958 is
limited by concerns about reciprocity, commercial dealings, and reference to foreign awards.
Article I (3) give state the choice to apply the Convention only to awards made to territory of
another contracting state. This means that the state where the award was made must be a signatory
so that the award can be enforced in another state that is signatory.

The UNCITRAL Model Law

The purpose of the Model Law is to provide a set of provisions that each country chooses to
accept anyway like modify and all make additions that they consider appropriate.
It was designed to help states reform their laws on arbitral procedure to include features and needs
of international commercial arbitration. The Model Law is designed for any given states to use as
they see fit and it deals with the arbitration agreements and its recognition by courts relating to
Article I of the New York Convention. The Model Law covers all stages of the arbitration process
from the arbitration agreement to the composition of the arbitral tribunal and the extent of court
intervention through to the recognition and enforcement of arbitral award. It reflects worldwide
consensus on principles and practices of international arbitration. It also recognises the parties’
freedom to choose their own procedure and tracks the stages of the procedure.
The UNCITRAL Arbitration Rules
Following the adoption of the New York Convention in 1958, the UN created the United Nations
Commission on international trade law (UNCITRAL). Once he draws that was to harmonise and
modernised redlaw the UNCITRAL arbitration rules I set of rules to regulate the process of
arbitration which is a process designed to result in an award which will be recognised and enforced
under the New York Convention the arbitration rules are intended to be incorporated into the

8
parties’ contract whereby they become a source of substantive contractual rights and applications
and set out the agreed procedure to be followed in any arbitrated disputes between the parties. The
patrician rules preclude their petition process in a moment which is consistent with the New York
Convention and build on it
The UNCITRAL treasure rose contractor teams that parties include in the arbitration agreements
Harmonisation of Laws and Rules on International Commercial Arbitration
The international framework of arbitration is a harmonised approach to arbitration. Harmonisation
is important because of fear that other judicial systems may not have legislation that will meet
standards for satisfactory commercial arbitration. This fear has been because of issues regarding:
a. Centrality of parties’ agreements;
b. bridging the gap between common law and civil systems
c. Pro-application bias – non-interference from courts
d. Growth in arbitration due to increasing world trade
e. Consistencies of outcomes which adds to predictability for commercial
The harmonisation of laws on arbitration takes place by states either adopting internationally
agreed instruments such as from treaties and conventions. States can also ratify international
instruments to harmonise international aspects of its commercial laws on arbitration. Parties to
international arbitration have access to the UNCITRAL Model Law and other soft laws that help
them to harmonise the procedure and observe due process and the principle of natural justice
examples of these laws are:

 UNCITRAL Arbitration Rules

 IBA Rules on the taking of evidence in international commercial arbitration
 UNCITRAL notes on organising arbitral proceedings
There are other laws which apply in international arbitration as will be explained into details,
The law governing the recognition and enforcement of the arbitration agreement
This means that law that will be used in enforcing the terms of the arbitration agreement and to
resolve any dispute out of the arbitration agreement.
The lex arbitri
This is the law governing the arbitration procedure. It is the law of arbitration in the seat of
arbitration chosen by the parties. This the law that will be used to resolve any procedural issues
of the arbitration.
The law governing the recognition and enforcement of arbitral awards
This is the law that will be applied to enforce the arbitral awards. In most countries, it is New York
Convention 1958. The basic requirement is that the seat or the state where the award was made
and the state where the enforcement of the award is sought must both be signatories to the
Convention.

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The governing law of the contract
This the law governing the substantive issue that has been brought to arbitration. It is the law
governing the resolution of the substantive issue of the agreement. It is the law under which the
merits of the dispute will be determined.
Institution or ad hoc Rules
These are rules of arbitral institutions that party will use if they decide to choose an arbitral
institution for the arbitration proceedings or the rules the parties choose for an ad hoc arbitration
that is not administered by any institution. The UNCITRAL Arbitration rules is a common an
example of rules and choice for parties in many ad hoc arbitrations.
Lex Mercatoria
The lex mercatoria is not a specific law for arbitration but a several usages or application of
practices, conventions of trades that are important for in resolving. It originated from the needs of
merchants in Europe who needed assistance for the resolution of disputes based on their trade and
practices. The approach has been adopted in international arbitration using expert advice in
resolving disputes in arbitration. Examples include Federation of Oils, Seeds and Fats
Associations Ltd (FOSFA) Rules of Arbitration and Appeal and The Federation of Cocoa
Commerce.
Soft Laws
These are rules adopted by bodies to govern arbitration proceeding but they are non-binding.
Examples include The UNCITRAL Notes on Organising Arbitral Proceeding (1996), International
Bar Association (IBA) Rules on the Taking of Evidence and the IBA Guidelines on Conflict of
Interest in International Arbitration.

Conclusion
Three key documents form the foundation of current best practices in international commercial
arbitration. These are The New York Convention 1958, The UNCITRAL Arbitration Rules and the
UNCITRAL Model Law. Many national laws on arbitration and rules of international bodies have
been formulated in relation to the provisions in these three documents, leading to harmonisation
of international commercial arbitration framework in the world.

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