HIGH COURT, ACCRA
DATE: 29 JANUARY 1962
BEFORE: OLLENNU J.
CASES REFERRED TO
(1) Holdsworth v. Wilson (1863) 4 B. & S. 1; 122 E. R. 360
(2) Simpson v. Commissioners of Inland Revenue [1914] 2 K.B. 842
(3) Matthews v. Commissioners of Inland Revenue [1914] 3 K.B. 192
(4) Champsey Bhara & Co. v. Jivraj Balloo Spinning and Weaving Co. [1923] A.C. 480, P.C.
(5) Luxor (Eastbourne) Ltd. (In liquidation) v. Cooper [1941] A.C. 108; [1941] 1 All E.R. 33, H.L.
(6) Cricklewood Property and Investment Trust, Ltd. v. Leighton’s Investment Trust Ltd. [1945]
A.C. 221; [1945] 1 All E.R. 252; 61 T.L.R. 202, H.L.
NATURE OF PROCEEDINGS
RULING on an application under Order 64, rule 13 of the Supreme [High] Court (Civil Procedure) Rules, 1954, to have an arbitration award set aside on the grounds of misconduct by the arbitrator and an error in law on the face of the award.
COUNSEL
C. C. Lokko for the applicant.
E. N. P. Sowah for the respondent.
JUDGMENT OF OLLENNU J.
The plaintiff and defendant had a dispute over certain contracts entered into by them. They agreed to submit their said dispute to a sole arbitrator. The arbitrator having heard the case, published his award on the 3rd October, 1961. The award was against the applicant, the plaintiff in this case who has applied to the court under Order 64, rule 13, of the Supreme [High] Court (Civil Procedure) Rules, 1954 to set aside the award on the following grounds: (1) misconduct on the part of the arbitrator, and (2) error in law on the face of the award.
The misconduct alleged is that the arbitrator employed a recorder who was an employee of the defendant-company and by reason of interest the said recorder did not record the proceedings in questions and answers, but merely recorded the gist of what she thought the answer was, to the advantage of her employers. It appears in paragraph 5 of the applicant’s affidavit in support of the application that at an early stage of the proceedings he drew the attention of his counsel to the fact he now alleges but the said counsel did nothing about it, implying that he did not think that anything was happening which was detrimental to his client’s case.
There is no exhaustive definition of what amounts to misconduct in law on the part of an arbitrator—see Halsbury, Law of England (3rd ed.) Vol. 2, p. 57, para. 126 where the learned authors said, inter alia:
“The expression is of wide import, including on the one hand bribery and corruption and on the other hand a mere mistake as to the scope of the authority conferred by the agreement of reference or a mere error of law appearing on the face of the award”.
Examples of matters and acts which the courts would regard as misconduct are given in the aforesaid paragraph 126. Of that long list of acts of an arbitrator which have been held to be misconduct the one relevant to this case is the delegation by an arbitrator of any part of his authority to a stranger or a party. Such a delegation, however, does not apply to a purely ministerial duty: see Holdsworth v. Wilson.1(1) In that case the arbitrator delegated his duty to ascertain costs; it was held that the authority delegated is purely ministerial and so the delegation is not misconduct. See also Simpson v. Commissioners of Inland Revenue,2(2) and Matthews v. Commissioners of Inland Revenue.3(3) It should be observed from all the cases in which an act of an arbitrator has been held to be misconduct that the conduct is such as might influence the arbitrator in his decision or make him fail to deal adequately, fully, or satisfactorily with the dispute, or make him fail to deal with any of the matters referred to him. Thus if the complaint had been that by employing the particular recorder the arbitrator disabled himself from dealing with any of the matters referred to him, it could be said that the said employment constituted misconduct. Again if there were reasonable grounds to show that the employment of the particular recorder resulted or even could result in the arbitrator obtaining some information from the recorder outside the evidence led before him, e.g., if the arbitrator held private discussions of the record of proceedings with the recorder in the absence of the parties or any of them, that act of private discussion, would amount to misconduct. But the mere employment of the recorder to take the proceedings with nothing more, is in my opinion, not misconduct to warrant the award being set aside. [p.32] of [1962] 1 GLR 30
For an error in law to be a ground for setting aside an award, it must be shown on the face of the award or the proceedings that a legal principle which is the basis of the award is erroneous. In other words the law propounded must be unsound. See Champsey Bhara & Co. v. Jivraj Balloo Spinning and Weaving Co.,4(4) and Halsbury’s Laws of England (3rd ed.) Vol. 2, p. 60, para. 127. Now the principle of law which the learned arbitrator propounded and applied in this case is the one laid down by the House of Lords in Luxor (Eastbourne) Ltd. (In Liquidation) & Ors. v. Cooper5(5) namely that an act of an employer which prevents his agent from completing his contract is not
necessarily a wrongful act to constitute a breach of contract.
It was submitted that the said principle of law does not apply where the non-completion of the agent’s assignment was frustrated by the employer. In support of that submission counsel referred the court to Cockle and Hibbert’s Leading Cases in Common Law (3rd ed.) Vol. 1, p. 274. In that book the statement of Viscount Simons, L.C. in Cricklewood Property and Investment Trust, Ltd. v. Leighton’s Investment Trust Ltd.6(6) is cited:
“Frustration may be defined as the premature determination of an agreement between parties, lawfully entered into and in course of operation at the time of its premature determination, owing to the occurrence of an intervening event or change of circumstances so fundamental as to be regarded by the law both as striking at the root of the agreement and as entirely beyond what was contemplated by the parties when they entered into the agreement.” Applying this definition one would ask, can it be said that the respondents frustrated the contract to be performed by the applicant ? As laid down in Luxor (Eastbourne) Ltd. (In Liquidation) & Ors. v. Cooper,7(7) so long as the sale has not been concluded a proposed vendor may decline to sell, and since upon the agreement between the applicant and the opposer the former would only be entitled to commission, when the sale is concluded, the question of the applicant’s commission will not arise without a concluded sale. Since the proposed vendor may contact other prospective purchasers independently, the contact which the opposers made with the firms in question through a person who they believed, as stated in the letter exhibit Q, was assisting the applicant in the negotiations for a purchaser of their business, could not in any way so strike at the root of their agreement with the applicant, and be entirely beyond what was contemplated as to frustrate the performance of the
contract. In my opinion that act of the opposers did not prevent the applicant from proceeding to a finish with the negotiations he had started with the finance group. Unfortunately the applicant’s reaction to that act of the opposers led him to what appears a rash decision, and thereby in effect, he himself called off the contract. Therefore, it is he and not the opposers who frustrated the contract.
In my opinion the learned arbitrator not only propounded the correct principle of law, but he also correctly applied it. There is no error in law on the face of the award. Therefore the award cannot be set aside.
The application is dismissed with costs.
DECISION
Application dismissed.
