Entering into a Contract 4, Arbitration Clause (DISPUTE SETTLEMENT Any…
Entering into a Contract 4
Any dispute, controversy or claim arising or relating to this agreement or matter requiring the interpretation of any provision of this agreement or the breach, termination or invalidity of this agreement shall be settled by a Conciliator as shall be agreed upon by the parties to this agreement in accordance with the UNCITRAL Conciliation Rules. The seat of the conciliation shall be in the city of Accra, Ghana.
Failure to Agree on a Mediator
Where the parties fail to agree on a mediator within seven (7) days of serving a notice of a dispute on a party or the parties fail to reach an amicable settlement by mediation, the dispute, difference, claim or controversy between the parties herein and in connection with this agreement shall be referred to and determined by two (2) arbitrators, one (1) to be appointed by each party, and the arbitration shall be held in the city of Accra, Ghana in accordance with the UNCITRAL Arbitration Rules
Failure to Appoint an Arbitrator
If either party fails to appoint an arbitrator within seven (7) clear days after the other party has appointed an arbitrator and has served the defaulting party with a notice to make the appointment, the party who has appointed an arbitrator is entitled to appoint that arbitrator to act as sole arbitrator
Procedure for Arbitration
The procedure to be followed in the arbitration shall be agreed upon by the parties or, in default of agreement, determined by the arbitrator (s).
Default in Procedural Order by a Party
In the event of default by either party in respect of any procedural order made by the arbitrator(s), the arbitrator(s) may proceed with the arbitration in the absence of that party and to deliver the award.
Vacancy Due to Death of Arbitrator or Incapacitation
Where a vacancy arises because any arbitrator dies or resigns, refuses to act, or becomes incapable of performing the functions of the office, the vacancy shall be filled by the method by which that arbitrator was originally appointed
Government Agreement to Grant Loans out of Public Fund/Account
(Parliamentary Approval by Resolution)
Parliament may, by a resolution supported by the votes of a majority of all the members of Parliament, authorize the Government to enter into an agreement for the granting of a loan out of any public fund or public account (Article 181 (1) of the 1992 Constitution ).
Obligatory to Lay Agreement Before Parliament
It is obligatory to lay before parliament an agreement entered into under clause (1). Such agreement cannot come into force or operation unless it is approved by a resolution of Parliament (Article 181 (1) of the 1992 Constitution ).
Government Raising Loans for Itself or Public Institution
(Parliamentary Approval by an Act of Parliament)
The Constitution expressly forbids the raising of loans by the Government on behalf of itself or any other public institution or authority without the authority of an Act of Parliament (Article 181 (3) of 1992 Constitution).
Government as a Party in an International Business or Economic Transactions
(Approval by Resolution & Act of Parliament)
Article 181 shall, with the necessary modifications by Parliament, apply to an international business or economic transaction to which the Government is a party as it applies to a loan (Article 181 (5) of the 1992 Constitution
Contracts: Form & Content
Parties & Executing Parties
(Capacity-Companies, Sole Proprietorships & Natural Persons)
Parties must be in Existence at the time of entering into the Contract
Description of Services or Works
Commencement of services or project
Clearly defined Scope and Activity Time lines
Prudent Terms & Conditions of the Agreement
Duties & Rights
Obligations: Risk Sharing, Financial & Operational
Right to create security interest over the project assets & conditions for the securitization, if it involves credit.
Right to assign rights under the Agreement by a party
Terms & Conditions Contd.
Transfer of Interest
Compensation for certain changes in legislation that may materially affect the project (If government is a party)
Project takeover by the Contracting Entity (If it’s a PPP)
Governing Law (To be agreed between the Parties, unless otherwise provided by law)
Step in Rights of Lender or financiers
Substitution of a party
Duration & Extension of the term
Winding Up & Transfer of Assets (Limited or Unlimited Liability, Guarantee Company or Sole Proprietorship)
What would constitute a Vitiating Factor
What would constitute a Breach
Remedies for Breach
Termination or Exit: Grounds, Notices & Remedies
Force Majeure or Event of Frustration
Dispute Resolution – (Litigation or ADR. See Sample Clause where there’s a foreign party in an ADR clause)
No Waiver of Rights (where no exercise of rights or delay in exercising rights)
Variation & Amendment
No variation or Amendment of this agreement shall be effective unless in writing and signed by or on behalf of the parties.
The Faroe Case
The Supreme Court considered the legal effect and enforceability of agreements that come under Article 181 of the 1992 Constitution and in respect of which parliamentary approval has not been obtained. The Court held that:
where an agreement requires parliamentary approval that agreement shall not be valid and enforceable unless and until it has been duly approved by Parliament
Per Sophia Akuffo JSC “Where the Constitution stipulates that Parliamentary authorization shall be required for certain transactions, then any transaction to which the provisions are applicable that is concluded without the authorization of Parliament cannot take effect without such authorization.”
where Parliamentary approval is a requirement for a loan, the failure to obtain such approval or authorisation is fatal and the loan agreement is void and unenforceable. Such an agreement would not be deemed to have come into operation and therefore cannot be validly registered. The registration of such a loan agreement will not validate or make enforceable that which is not valid or enforceable.
Martin Alamisi Amidu vrs. The Attorney General
The Court held that
The CAN 2009 Stadia Agreements constitute an International business or economic transaction within the meaning of article 181(5) of the 1992 Constitution. It should thus have been laid before and approved by Parliament to become operative and binding on the Republic of Ghana.
These agreements are thus null and void and of no effect.
Contract & Negotiations : The Team
Generally, there’s no specific requirement for the composition of the negotiation team. However, some laws may, depending on the nature of the transaction require that certain persons constitute the team. Particularly, if it concerns the State.
Example of a Gov’t Team for Negotiation:
Representatives of Government Contracting Entity
The Ministry of Finance
The Attorney General’s Department
Any person with relevant expertise
The provisions of Clauses 17, 23, 24 and 25 shall survive the termination of this MOU, either by consent, breach or any other means, whether in accordance with this agreement, by law, under a court order or otherwise.