Ghana’s Supreme Court Affirms Pro-Arbitration Stance, Upholding Multi-Million Dollar LCIA Awards Against Springfield

In a decision that reinforces Ghana's commitment to the international arbitration framework, the Supreme Court has dismissed a final appeal by Springfield Exploration and Production Limited, paving the way for the enforcement of nearly US$10 million in arbitral awards.

The ruling in Stena Unicon Offshore Services Ghana Limited v. Springfield Exploration and Production Limited & Anor clarifies critical procedural standards for the enforcement of foreign awards under the Alternative Dispute Resolution Act, 2010 (Act 798).

The dispute originated in 2019, when Stena Unicon deployed the drillship Stena Forth to drill the Afina-1 exploration well for Springfield off the Ghanaian coast. While the drilling was a technical success, a financial rift opened when Springfield failed to settle fifteen invoices totalling over US$8 million.

Springfield argued that it was exempt from certain taxes and cited the Covid-19 pandemic’s impact on its fundraising efforts as a reason for the payment delay. Bound by a contract governed by English Law, the parties moved to arbitration under the London Court of International Arbitration (LCIA) Rules with the seat in London.

After a tribunal in London issued awards for the debt and legal costs in late 2021, Stena sought enforcement in the Ghanaian High Court. Springfield resisted, launching a robust challenge based on the right to a fair hearing (audi alteram partem).

Springfield’s primary contention was that the tribunal had applied the 2020 LCIA Rules, which included an "Early Determination" procedure—effectively an expedited process to dismiss weak defences—rather than the 2014 Rules in place when the contract was signed. Springfield claimed this "material change" handicapped their defence and violated their legitimate expectations. 

Springfield claimed that they were denied ample time to prepare their defence in accordance with the rules, Applicant had earlier consented to arbitration for, and that this said rules of arbitration employed therefore disabled them from a fair and procedural adequate arbitration which protects Respondents right to a fair hearing as mandated by the rules of judicial determination affecting the rights of others.

They alleged that they did not have the required time they needed to prepare for the arbitration, gather their evidence, and to prepare an answer to the case of the Applicant.

Counsel for the Respondents also criticized the findings of the court below that the new rules of LCIA and the old rules anticipated that there would be early determination of the suit.

The Supreme Court, however, upheld the principle that institutional rules are generally intended to be applied as they stand at the commencement of the arbitration, unless parties expressly agree to a specific earlier version. The Court held that it was evident from the record of proceedings that the parties did not expressly specify that in the event of any dispute arising between them, only the 2014 LCIA Rules would apply.

For the Counsel for the Applicant, this omission is interpreted as an intent to apply the LCIA Rules in force at the time the arbitration is commenced and that had the parties intended to apply the rules in force at the time the agreement was executed and not the rules in force at the time the arbitration commenced, the parties would have clearly stated so. 

The Court in making this ruling relied on the English case of  China Agribusiness Development Corp. v. Balli Trading [1998] 2 Lloyd’s Rep 76, where it was held that the reference to an arbitration institution and its institutional rules in the parties’ agreement was a reference to that arbitration institution or its successor institution and applicable rules.

Relying further on Sundra Rajoo, Law, Practice and Procedure of Arbitration (2nd Edition, Lexis Nexis, 2016) and Russell on Arbitration (24th Ed), (Sweet & Maxwell 2015), the Court affirmed this view that although amendment of rules between making an agreement and commencing arbitral proceedings may cause difficulties, without an explicit reference to the old rules only, the court will apply the rules in effect when arbitration began. 

Furthermore, the Court noted that the 2014 Rules (Article 14.5) already granted tribunals the "widest discretion" for the "expeditious conduct" of proceedings. Consequently, "Early Determination" was not a radical departure but a clarification of existing powers.

The justices further rejected Springfield’s claims of a denial of justice, noting that the company had been involved in every step of the London proceedings, attended video conferences, and was represented by legal counsel.

The Court also made a significant ruling on the admissibility of evidence during enforcement proceedings. Springfield had attempted to block the awards by arguing that the Power of Attorney used by Stena's lawyers was unstamped under the Stamp Duty Act. The Supreme Court ruled that such factual objections must be raised at the trial stage. Because Springfield failed to object in the High Court, they could not use the technicality to upend the case on appeal.

Making particular reference to Sections 5 and 6 of the Evidence Act, 1975 (NRCD 323),  an objection to the admissibility of evidence must be at the time where the evidence is offered, and an appeal or review based on erroneous admission of evidence may succeed only where it was established that the erroneous admission or exclusion had occasioned a substantial miscarriage of justice. 

The Court affirmed that it is evidently clear that the only criterion for a reversal is where the erroneous admission must have resulted in a substantial miscarriage of justice. In the present case before the Court, the purported erroneously admitted evidence did not affect the merits of the claim contained in the Arbitration Award that was being enforced and thus the ground of appeal failed.

For international drilling contractors and investors, this judgment affirms judicial restraint and predictability. By affirming that foreign awards will not be lightly impeached on technical grounds, the Supreme Court has bolstered Ghana's reputation as a pro-arbitration jurisdiction.

“The Respondents were afforded more than ample opportunity and time to defend,” the Court concluded, dismissing the appeal in its entirety. With this legal hurdle cleared, the focus now shifts to the final satisfaction of the awards, bringing a close to one of the most watched commercial disputes in Ghana's offshore energy sector.