DE GRAFT-JOHNSON AND ANOTHER vs. GHANA COMMERCIAL BANK AND ANOTHER [1973] 2 GLR 100

CASES REFERRED TO

(1) Metropolitan Tunnel and Public Works Ltd. v. London Electric Rail Co., Ltd. [1926] Ch. 371; 95 L.J.Ch. 246; 135 L.T. 35, C.A.

(2) Clough v. County Livestock Insurance Association, Ltd. (1916) 85 L.J.K.B. 1185; 32 T.L.R. 526;

60 S.J. 642.

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(3) Barnes v. Youngs [1898] 1 Ch. 414; 67 L.J. Ch. 263; 46 W.R. 332; 42 S.J. 269.

(4) Printing, Machinery Co., Ltd. v. Linotype and Machinery Ltd. [1912] 1 Ch. 566; 81 L.J.Ch. 422;

106 L.T. 743; 28 T.L.R. 224; 56 S.J. 271.

NATURE OF PROCEEDINGS

APPLICATION for a stay of proceedings in accordance with an arbitration clause. The facts are fully set out in the ruling.

COUNSEL

Akyea-Djamson for the third party.

E. D. Kom for the defendants.

JUDGMENT OF ABOAGYE J.

The plaintiffs herein have sued the defendants for damages for the death of one Mr. K.M. Eyeson, resulting from the alleged negligence on the part of the driver of the defendants land rover No. GL 9331. The defendants’ said vehicle had been insured with the third-party under insurance policy No. 1498/CH at the time of the accident and the defendants have claimed indemnity against the third-party in the event of the plaintiffs’ action succeeding against them. After third party directions have been given, the third party has brought this application under section 8 of the Arbitration Act (Act 38), and Order 72, r. 1 of the Supreme [High] Court (Civil Procedure) Rules, 1954 (L.N. 140A), for a stay of the third-party proceedings and for reference of the difference between them and the defendants to arbitration in terms of condition (8) of the insurance policy which requires that all differences arising out of the policy shall be referred to an arbitration and that an award by such arbitration shall be a condition precedent to any right of action against the third-party.

The late K. M. Eyeson was, until his death, a branch manager of the defendant bank and he died when he was being driven back to his station in one of the defendants’ vehicles. Although no statement of defence has been filed by, or on behalf of, the third-party, from paragraphs (8) and (9) of their affidavit in support of their application they deny any liability to the defendants on the ground that the deceased died in the course of his employment and by section 11 of the policy liability is excluded in such cases. Section 11 (a) quoted in the supporting affidavit reads:

“1. (a) Subject to the limits of liability the company will indemnify the insured in the event of accident caused by or arising out of the use of the motor car against all sums including claimant’s costs and expenses which the insured shall become legally liable to pay in respect of:

(a) death or bodily injury to any person except where such death or injury arises out of and

in the course of the employment of such person by the insured and

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excluding liability to any person being a member of the insured’s household who is a passenger in the motor car unless such person is being carried by reason of or in pursuance of a contract of employment.”

A dispute as to whether or not the late K. M. Eyeson was, at the time of the accident, on the defendants’ vehicle in the course of his employment has arisen between the defendants and the third-party and either of them is entitled to apply for a stay of the proceedings between them and for reference of the dispute to arbitration under section 8 of the Arbitration Act, 1961 (Act 38). Section 8 of the Act provides:

“If any party to an arbitration agreement, or any person claiming through him, commences any legal proceedings in any court against any other party to the agreement, or any person claiming through him, in respect of any matter agreed to be referred, any party to those legal proceedings may apply to that court to stay the proceedings, and that court, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the agreement, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.”

The general principle which guides a judge in deciding whether to grant or refuse a stay of proceedings is whether the party opposing the application for the stay has shown any reason why the matter should not be referred to an arbitration: see Metropolitan Tunnel and Public Works Ltd. v. London Electric Rail. Co., Ltd. [1926] Ch. 371 at p. 385, C.A. per Lord Hanworth M.R. The courts will not grant a stay of the proceedings if the matter in dispute between the parties involves difficult questions of law or if the matter is more convenient and suitable for determination by the court rather than an arbitrator who may have to state a case for the decision of the court: see (i) Clough v. County Livestock Insurance Association, Ltd. (1916) 85 L.J.K.B. 1185 at p. 1186 per Avory J., (ii) Barnes v. Youngs [1898] 1 Ch. 414 and (iii) Printing Machinery Co., Ltd. v. Linotype and Machinery Ltd. [1912] 1 Ch. 566. In the last case Warrington J. stated at p. 573:

“It seems to me that it would be absurd to give an arbitrator the duty of determining a question of construction, and then, supposing the arbitrator determined that question against the plaintiff company, to let the matter come back to the Court to determine whether the agreement should be rectified or not.”

The matter in difference between the defendants and the third-party in this suit is purely one of construction of section 11 (1) (a) of the insurance policy. It involves the application of law to agreed facts and in my opinion the court is in a better position than an arbitrator to

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resolve the difference since an arbitrator faced with the problem is likely to refer it to the court for determination. The application for stay of proceedings is therefore dismissed.

DECISION

Application dismissed.

S.O.