BMC GHANA LIMITED vs. ASHANTI GOLDFIELDS BIBIANI LTD [2004]DLCA6665

Date	2004-10-29
Suit No.	CA.NO.H1/191/2004
Citation No.	[2004]DLCA6665

TWUMASI J.A.

AMONOO-MONNEY J.A.

ANIN-YEBOAH J.A

KIZITO BEYUO FOR APPELLANT.

FIRNA ASAFU ADJAYE FOR ATTA AKYEA FOR RESPONDENT.

[2004]DLCA6665
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													<main id="main" class="content" style="min-height: 60rem" >BMC GHANA LIMITED<o:p></o:p>vs.<o:p></o:p>ASHANTI GOLDFIELDS
BIBIANI LTD<o:p></o:p>[COURT
OF APPEAL, ACCRA]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

CA.NO.H1/191/2004&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; DATE: 29TH, OCTOBER,
2004.<o:p></o:p>

FIRNA
ASAFU ADJAYE FOR ATTA AKYEA FOR RESPONDENT.<o:p></o:p>

<p class="MsoNormal" align="center" style="text-align:center;line-height:115%;
border:none;mso-border-top-alt:solid windowtext 1.5pt;mso-border-bottom-alt:
solid windowtext 1.5pt;padding:0in;mso-padding-alt:1.0pt 0in 1.0pt 0in">JUDGMENT<o:p></o:p>

</div>TWUMASI, J.A.<o:p></o:p>This
appeal from the ruling delivered by the High Court, Accra on the 19th January
2004 sharply brings into focus the fundamental canons for the construction and
interpretation of contracts entered into by businessmen, with particular
reference to actual or presumed intentions of the parties.&nbsp; Both parties are limited liability companies
engaged in the mining industry.&nbsp; By an
agreement entered into by them on the 25th July 1997, the appellants herein
(defendants in the court below) engaged the respondents (plaintiffs in the
court below) to carry out open pit mining operations at the appellants’ Bibiani
mine.&nbsp; It was an express term of the contract
that where the costs to the plaintiffs of executing the work was increased or
decreased, as the case might be, by variation in wages, allowance or any other
labour connected costs of materials expressed as a component of the contract
prices, the payment of the works under the contract would be subjected to
adjustment for rise and fall by application of an agreed formula.&nbsp; Germane to this appeal, was a provision or
term in the contract on the procedure for dispute resolution, the parties
having recognised the human inability to foresee future fortunes ahead of them,
however the degree of optimism that they humanly could have mastered for the
success of the business.&nbsp; It was provided
under clauses 3.25.1, 3.23.2 and 3.25.5 that:— <o:p></o:p>3.25.1 — “If any difference or dispute
arises between the parties in relation to or in connection with this Agreement,
or its construction or in relation to or in connection with the works or the
performance thereof, either party may by notice in writing to the other party
call for the point or points at issue to be formally resolved by the
parties.&nbsp; Both parties shall, as soon as
reasonably practicable, submit in writing to the other party details clearly
specifying the nature of such question, difference or dispute and call for the
point or points at issue to be formally resolved within (28 days) after written
submissions are received by each party.” <o:p></o:p>3.25.2&nbsp;
— If the dispute cannot be resolved by the parties to their mutual
satisfaction within the twenty-eight day (28 days) as stated in clause 3.25.1,
that difference or dispute may be referred to arbitration as hereinafter
provided. <o:p></o:p>3.25.5&nbsp;
—&nbsp; The decision of the arbitrator
pursuant to this clause shall be final and binding on the parties and no party
or parties shall be entitled to commence or maintain any action or proceedings
until the dispute, question or difference has been referred to and considered
in accordance with the terms of this clause.” <o:p></o:p>It
appears from the facts that, following the execution of this agreement, the
parties commenced business in earnest.&nbsp;
Then, it happened that disputes began to rear their ugly heads as though
providence had intervened to put to the acid test the sincerity of the parties
to the agreement. <o:p></o:p>By
a Writ of Summons filed at the High Court, inter alia, a declaration that in
terms of the contract upon and executed by the parties on the 25th day of July
1997 “the plaintiff is entitled to rise and fall claims as defined in clause
3.21 thereof.” <o:p></o:p>The
plaintiff claimed “a further declaration that by virtue of the Defendant’s own
past performance in making good the rise and fall claims, it is estopped from
denying, refusing and/or neglecting to pay in full all rise and fall due to the
Plaintiff from the Defendant. <o:p></o:p>As
was only to be expected, the appellants entered a conditional appearance and
followed it immediately by a motion for an order for a stay of
proceedings.&nbsp; In the said motion, the
appellants contended that the action was not competent and could not be
entertained by the High Court and relied upon the provisions in the agreement
relating to arbitration where it had been provided that the respondents could
not commence the action without first resorting to arbitration as stipulated in
the agreement referred to in this judgment.&nbsp;
The High Court dismissed the application and this appeal asks this court
to set aside the said ruling.&nbsp; The whole
ruling turned prominently on the construction of the three clauses of the
agreement which I have quoted verbatim previously and in particular the import
of the word “may” in clause 3.25.1. The learned trial judge took the view that
the said word “may” used in the context of reference of disputes or differences
to arbitration should be interpreted as giving an option or discretion to
either party to chose between arbitration or a court of law.&nbsp; Three main grounds of appeal were filed on
behalf of the appellant and they are:— <o:p></o:p>(a)
The trial judge erred in not granting the application for stay of proceedings. <o:p></o:p>(b)
The trial judge’s construction of the word “may” on the agreement between the
parties renders nugatory not only the provision for the resolution of disputes
and differences by mediation and arbitration but also the provision that
neither party shall otherwise commence or maintain an action in court. <o:p></o:p>(c)
The holding that the defendant has not evinced willingness to go to arbitration
is unsupportable having regard to respective affida</main>