It is important that an investor considers the issue of dispute resolution at the outset of the transaction. It should form part of the investor's evaluation of the risk of the investment and not left as a minor point to be addressed at the end of the contract drafting process.
Ghana's Legal System
The Ghana legal system is based on English common law, customary (traditional) law, and the 1992 Constitution.
Alternative Dispute Resolution (ADR)
The majority of investors prefer to use ADR to resolve their disputes. ADR certainly can prove to be a quicker and more efficient means of resolving disputes. Furthermore, within Ghana (and elsewhere in the West African region), there is an established and recognised mechanism for the enforcement of foreign arbitral awards.
A. Limitation Periods for Civil Claims:
It is important to be aware of the limitation periods applying to a claim. The limitation periods are provided by statute and vary depending on the cause of action.
B. Business Transactions to which the Government is a party:
In contracting with the Government, an investor should take note of Article 181(5) of the Ghanaian Constitution. This Article imposes the requirement for parliamentary approval of an "international business or economic transaction to which the Government is a party".
C. Enforcement of foreign court judgments
The method for enforceability of a foreign court judgment in Ghana depends on whether or not the country from which the judgment originates has a reciprocal arrangement with Ghana for the enforcement of judgment.
D. Enforcement of foreign awards
Ghana is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, concluded in 1958 (the New York Convention) and which provides a regime for the enforcement and recognition of arbitral awards within contracting states.
E. Investment Treaties:
As part of the investment planning process, it is important for an investor to consider whether it can take advantage of the protections offered by bilateral investment treaties, as this may allow the investor to bring claims directly before an international arbitration tribunal and avoid having to litigate in the local courts.
F. Approaches in neighbouring countries:
In the event that an investor is also considering investments in other countries in the West African region, it is worth bearing in mind that a number of Ghana's neighbours are parties to the Organisation for the Harmonization of Business Law in Africa (OHADA).
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This is an extract taken from our full Dispute Resolution in Ghana guide.
Many thanks to Clyde & Co for contributing this guide.