FATTAL vs. FATTAL AND OTHERS [1999-2000] 1 GLR 331

CASES REFERRED TO

(1) Kariyavoulas (Decd), In re; Donkor v Greek Consul-General [1973] 2 GLR 59.

(2) Salomon & Co Ltd v Salomon [1897] AC 22; 66 LJCh 35; 75 LT 426, HL.

(3) Agyekum v Asakum Engineering and Construction Ltd [1989-90] 2 GLR 650, CS[sic](1).

(4) Vanderpuye v Botchway (1957) 2 WALR 16, PC.

(5) Eboe v Eboe [1961] GLR 324.

(6) Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277; [1939] 1 All ER 513; 108 LJRC 40, PC.

(7) Chatenay v Brazilian Submarine Telegraph Co [1891] 1 QB 79; 60 LJQB 295; 63 LT 739, CA.

(8) Benaim & Co v Debono [1924] AC 514; 93 LJPC 133; 131 LT 1, PC.

(9) Bonython v Commonwealth of Australia [1951] AC 201; 66 TLR (Pt 2) 969; 94 SJ 821, PC; affirming [1948] ALR 185

(10) United Railways of Havana and Regla Warehouses Ltd, Re [1961] AC 1007; [I 960] 2 WLR 969;

[1960] 2 All ER 332, HL.

(11) Miller (James) and Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 572;

[1970] 2 WLR 728; [1970] 1 All ER 796, HL.

(12) Dankwa v Filler (1958) 3 WALR 168.

(13) Republic v High Court, Koforidua; Ex parte Nsowaa [1989-90] 2 GLR 677, SC.

(14) Amoasi III v Twinto [1987-88] 1 GLR 554, SC.

NATURE OF PROCEEDINGS

APPEAL by the plaintiff from the ruling of Essilfie-Bondzie JA sitting as an additional High Court judge dismissing the plaintiff’s

[p.335] of [1999-2000] 1 GLR 331 substantive action against the defendants, on an application by the second defendant, when proceedings in that suit had been adjourned by Aryeetey J who was presiding over it for reference of the dispute to arbitration in accordance with the provisions of the partnership agreement between the parties.

COUNSEL

Ansah Asare (with him E A Owusu Ansah) for the appellant.

Dr W C Ekow Daniels for the respondents.

JUDGMENT OF LAMPTEY JA.

On 23 June 1995 Omar Mahmoud Fatal in a representative capacity as the plaintiff sued the defendants, namely (1) Faraz Mahmoud Fattal; (2) Rana Motors & Metal Works Engineering Co Ltd; and (3) Kia Motor Corporation and claimed against the defendants the reliefs endorsed on the writ of summons. A statement of claim was filed with the writ. On 5 July 1995 a statement of defence was filed for the second defendant company. On 6 July 1995 solicitors acting for the first defendant entered conditional appearance for the first defendant. Because the third defendant company was an external company and resided out of the jurisdiction, the plaintiff applied for leave to serve process on the third defendant company out of the jurisdiction. The solicitors acting for the second defendant filed a statement of defence on behalf of the second defendant company on 28 July 1995. The solicitor acting for the first defendant filed a motion on notice praying the court for an order striking out the writ of summons against the first defendant. The application was resisted by the plaintiff in an affidavit in opposition filed on his authority by one Rachel Godson-Amamoo. The trial court heard the application to strike out the writ of summons. The application was struck out because counsel for the first defendant withdrew the motion.

On first August 1995, solicitors acting for the plaintiff filed a motion on notice praying the court to stay proceedings and for a further order for the appointment of an arbitrator. This unusual step taken by the plaintiff was explained in paragraph (8) of his affidavit in support of his application. That paragraph reads: “(8) That since the first defendant now admits that a dispute has arisen, it has become necessary for the partners to comply with the arbitration requirement stipulated in the partnership agreement.”

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The first defendant swore to an affidavit in which he challenged and disputed the statements made by the plaintiff. The second defendant did not react to the plaintiff’s motion to stay proceedings. The court heard the application and ruled as follows: “The application for stay of proceedings and appointment of an arbitrator is granted. The plaintiff and the defendants are allowed up to the next adjourned date to agree on an arbitrator.” The court adjourned the case to 4 September 1995.

In due course, ie on 9 May 1996 Mr Enoch Kom as solicitor for the second defendant company filed a motion on notice seeking an order of the court to stay proceedings or dismiss the suit under the inherent jurisdiction of the court. In support of the application, one Mohamed Ahmed Odaymat swore to an affidavit ostensibly on the authority of the second defendant company. Annexed to the application were: (1) a document in Arabic marked exhibit 2 and (2) a document in English language marked exhibit 1. On 22 May 1996 the plaintiff filed an affidavit in opposition. The defendant did not file any affidavit in this matter. The third defendants did not also file any affidavit. I must observe that it does not at that stage appear that third defendant company had been served with the writ of summons and statement of claim. The trial court heard the application on the merits. On 27 June 1996, the court presided over by Essilfie-Bondzie JA sitting as an additional judge of the High Court, delivered his ruling on the application. It dismissed the action of the plaintiff and entered judgment in favour of the defendants.

The plaintiff is aggrieved and dissatisfied by the ruling and appealed to this court on a number of grounds of appeal. The first ground of appeal argued was that the trial judge lacked jurisdiction to hear and determine the application to stay proceedings or dismiss the action of the plaintiff. Counsel for the plaintiff submitted that the court presided over by Aryeetey J (as he then was) had ordered a stay of proceedings. He argued that until the order of Aryeetey J (as he then was) had been set aside the proceedings remained stayed and no lawful step can be taken in the matter. He contended that Essilfie-Bondzie JA was bound by the order of Aryeetey J (as he then was). He erred in law in assuming jurisdiction. In reply, counsel for the second defendant submitted that the trial judge was clothed with jurisdiction. He argued that the order made by Aryeetey J (as he then was) was not a final order but was an interlocutory order. He

[p.337] of [1999-2000] 1 GLR 331 contended that the order lapsed on 1 September 1995, because of the language used by the judge. The further argument was that the defendant sought an alternative relief, namely an order to dismiss the action of the plaintiff. He argued that in support of this relief the second defendant company annexed a copy of an agreement between the parties. He drew attention to a term of this agreement which enjoined the parties thereto to contest any and all disputes arising out of the agreement according to the law of the Lebanon. The third limb of the submission was that the plaintiff submitted to the jurisdiction of Essilfie-Bondzie JA and cannot now complain.

The issues raised in the submissions of counsel raised three issues for consideration by this court. These are (1) the issue of jurisdiction of the court in hearing and determining the application; (2) the dismissal of the action of the plaintiff; and (3) the entry of judgment for the defendants. I will deal first with the issue raised by counsel for the plaintiff; namely whether or not Essilfie-Bondzie JA lacked jurisdiction in the matter before him. This was raised in the case of In re Kariyavoulas (Decd); Donkor v Greek Consul-General [1973] 2 GLR 59. In that case the court presided over by Charles, Crabbe J (as he then was) examined and considered the law and the case law on this issue. In his opinion, the issue raised was not an issue relating to the jurisdiction of the court or the judge. He expressed the opinion that the issue raised related to res judicata. He stated his opinion at 59 of the report thus:

“It seems to me, therefore, that the issue of jurisdiction cannot help the caveator. What can help is whether the High Court of Justice having dealt with a cause or matter to a finality even on an interlocutory issue, the High Court of Justice can deal with it again. That, is to raise the legal issue of res judicata … Under our system, of co-equal, co-ordinate, collateral and co-existing jurisdiction of the divisions of the High Court of Justice and of the justices thereof, the courts in the country have long recognised the unsavoury dangers of the repetition of litigation involving the same parties, the same subject matter and the same issues. Thus, the principle of res judicata, that a final judgment between the same parties or their privies

[p.338] of [1999-2000] 1 GLR 331 touching upon the same question by a court of competent jurisdiction is conclusive between the parties and their privies.”

I have no doubt that the reasoning put forward by the learned judge is sound and cannot be faulted. It would be wrong to oust the jurisdiction of the court or the judge on the ground that the issue raised had been disposed of by an earlier decision, judgment or order. In such cases I entirely agree with the ratio in the Kariyavoulas case (supra). In this appeal the complaint put forward does not and cannot relate to jurisdiction. The trial court has jurisdiction to hear the application except that the applicant was met with the defence of res judicata, rather than a defence based and founded on want of jurisdiction.

Is this a case of res judicata? The defendants do not accept that this is a case where the plaintiff can rely on res judicata. The plaintiff submitted the contrary. On the evidence on record it cannot be disputed that on 14 August 1995 the court ordered that further proceedings be stayed. The judge further ordered that an arbitrator be appointed by agreement between the warring parties. In my view, the judge made two separate and independent orders. The judge stayed the proceedings indefinitely. It would be wrong and an abuse of language to argue that the stay of proceedings was subject to the appointment of an arbitrator; and that if an arbitrator was not appointed by 4 September 1995, the order staying proceedings automatically lapsed. In my opinion, the order staying proceedings was not a conditional order. The order remained in full force and effect until it was vacated, discharged or set aside. In the instant appeal, there is no evidence that the order to stay proceedings was vacated, discharged or set aside, indeed, there was a valid and lawful order staying proceedings; hence it was not necessary for a second and further application to stay proceedings to be moved by the second defendant before the very court differently constituted. I find that the judge gravely erred in law in hearing the application to stay proceedings. That matter was res judicata.

I next deal with the complaint that the trial judge erred in law in dismissing the action of the plaintiff. Counsel for the plaintiff submitted that the trial judge erred in law in dismissing the action of the plaintiff on the ground that the plaintiff should have first submitted the case to an arbitrator as provided for in the partnership

[p.339] of [1999-2000] 1 GLR 331 agreement. He submitted that the trial judge should have applied section 8 of the Arbitration Act, 1961 (Act 38). He argued that the judge erred in law in dismissing the plaintiff’s action against the first and third defendants because they had not applied that the action against them be dismissed. He submitted that the trial judge erred in law when he held that the proper law of the contract was the law of Lebanon and further the forum conveniens was the courts of Lebanon. In reply to the issue raised on arbitration, counsel for the second defendant submitted that the operative law was section 14 (a) of Act 38. He did not proceed further to demonstrate that the trial judge observed and applied the subsection in the instant appeal.

It is plain and clear that from its language that section 14(a) of Act 38 does not empower a judge to dismiss an action before him on the ground that the parties had failed to appoint an arbitrator or that the parties cannot agree on the choice of an arbitrator. The court under Act 38 is enjoined to appoint an arbitrator for the purposes of the Act in cases where the parties cannot agree on the choice of an arbitrator. Counsel for the second defendant misdirected himself on the import of section 14(a) of Act 38. The judge’s dismissal of the action cannot be supported by section 14(a) of Act 38, in the circumstances against the second defendant company. The trial judge erred in law.

The plaintiff’s complaint that the trial judge erred in dismissing his action against the first and third defendants was conveniently and understandably not adverted to by counsel for the second defendant. There can be no doubt that the trial judge’s order dismissing the action of the plaintiff against the first defendant and the third defendant company cannot be justified in law. I would simply state that the trial judge misdirected himself on the application before him. The first defendant had filed a statement of defence in which he did not show nor establish that the action against him was vexatious or frivolous or was an abuse of the process of the court. The first defendant had not applied to the court to dismiss the action of the plaintiff. In the circumstances the trial judge erred in law in summarily and without evidence dismissing the action of the plaintiff against the first defendant.

The record of appeal shows that the first defendant filed a motion on notice praying the court to strike out the writ of summons of the plaintiff on 12 July 1995. This motion was heard on 21 July 1995.

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On that date Mr Kudoadzi appeared as counsel for the first defendant. The court notes read: “Mr Kudoadzi withdraws motion to strike out writ of summons. Mr Asare insists on costs. By court: The motion to strike out writ is struck out. The plaintiff is awarded ¢50,000 costs.” This was the state of the record when the application of the second defendant to dismiss the action was filed. In any case, the application can only relate to the case of the plaintiff against the second defendant alone. It was unlawful and unwarranted for the trial judge to dismiss the action of the plaintiff against the first defendant. That decision must be set aside. I accordingly do so. The order entering judgment for the first defendant was an unwarranted and an unlawful order. I set that order aside.

I adopt my reasons above in respect of the appeal against the dismissal of the plaintiff’s case against the third defendant company. I am satisfied that the trial judge’s dismissal of the case against the third defendant company was wrong in law. I set it aside. I also set aside the judgment entered in favour of the defendant.

I must now turn to the complaint that the trial judge erred in law in dismissing the case of the plaintiff against the second defendant. The first serious observation I make is to point out that the action of the plaintiff was against Rana Motors & Metal Engineering Co Ltd, Accra. This means and can only mean that the action was against a limited liability company formed under the Companies Code, 1963 (Act 179). The action was not against Mohamed Ahmed Odaymat. The statement of defence filed on behalf of the second defendant company did admit the fact that it was Rana Motors Co that was sued as the second defendant. The relief claimed by the plaintiff was against a limited liability company doing business in Ghana. Again, the affidavit evidence did not show and establish that the plaintiff had sued Rana Motors in a court in Lebanon. The affidavit evidence did not also show that there is pending in a court in Lebanon an action between the plaintiff and Rana Motors and in which the plaintiff claimed the same and identical reliefs as are before the Ghanaian trial court. In the circumstances of this case, the trial judge clearly and plainly misdirected himself when he expressed his opinion as follows:

“Now since a limited liability company is an artificial entity and acts through its officers, board of directors, chairmen and

[p.341] of [1999-2000] 1 GLR 331 managing directors, and since these are said to represent the directing mind and will of the company, it is my view that an action can be defended or prosecuted by the chairman of Rana Motors … The second defendant company is competent to represent the second defendant. I rule that he has the locus standi to make the instant application.”

With respect to the trial judge, he woefully failed to appreciate the issue of law raised by counsel for the plaintiff. The issue of law submitted for consideration of the trial judge was whether Rana Motors Co was the party sued or Odaymat was the person sued. The answer was provided by Odaymat himself at paragraph (3) of his affidavit in support of the application. He deposed as follows: “(3) That the plaintiff-respondent has taken an action in the First Court of Instance of North Lebanon against me Mohamed Ahmed Odaymat personally for accounts.” (The emphasis is mine.) The language used by Odaymat does not admit of any difficulty in interpretation. He swore that the plaintiff had sued him personally for accounts in Lebanon. He did not state that the plaintiff had sued Rana Motors in Lebanon. In any case, the plaintiff had not challenged the right and authority of Odaymat to act for Rana Motors in this action. I find that the trial judge erred in law when he held that the plaintiff’s action in Lebanon was in law a repeat of the action before him. It is trite learning that a limited liability company is a different person from the various categories of persons who own different interests in that company: see Salomon & Co Ltd v Salomon [1897] AC 22, HL.

Counsel for the plaintiff submitted that the trial judge erred when he held that the plaintiff breached the agreement between the parties because the plaintiff did not refer the dispute between the parties to arbitration. To appreciate the full force and effect of the complaint made by the plaintiff on this issues, I reproduce the relief claimed against the second defendant company which was as follows: “an order for an account of the total number of vehicles and quantity of spare parts imported into Ghana from the third defendant company since January 1990 in pursuance of the commission amount contract dated 8 November 1986 and made in favour of Mahmoud Fattal & Sons Co, a partnership of which the plaintiff is a partner.”

[p.342] of [1999-2000] 1 GLR 331 (The emphasis is mine.) At paragraph (12) of the statement of claim the plaintiff averred: “(12) It was clearly understood and agreed between the contracting parties that the second defendants would strictly observe the terms and conditions of the contract dated 8 November 1986.” The second defendant company filed a statement of defence. At paragraph (1) the defendant company pleaded as follows: “(1) Paragraphs (1), (11), (12), (16) and (17) of the plaintiff’s statement of claim are denied.” This means and can only mean that the defendant company denied the existence of an agreement dated 8 November 1986 between the plaintiff and the second defendant company. The obvious question that may be raised is, what agreement was the subject matter of the litigation before the court on which the trial judge relied in examining the application before him? The answer would be found at paragraph (4) of the affidavit in support of the application to dismiss the action of the plaintiff. Paragraph (4) reads: “(4) That the action (in Lebanon) was based on the agreement dated 22 August 1987 made between Mohamoud Fattal & Sons, a partnership agreement . . .”

The picture that emerged from the evidence before the court was that: (1) the plaintiff sued the second defendant company because of a breach of an agreement dated 8 November 1986; (2) the applicant Odaymat rather than the second defendant put forward an agreement dated 22 August 1987 for consideration by the court in Lebanon; (3) there is no nexus between the two agreements before the court. In the light of the matters recited above, it is plain and clear that the decision of the trial judge founded on an agreement without identifying the particular agreement in dispute between the parties, cannot be supported in law. It is for all the reasons stated above that I find that the appeal succeeds. The ruling is wrong in law and cannot be supported. I allow the appeal. I set aside the ruling dated 24 June 1996.

JUDGMENT OF WOOD JA.

On 23 June 1995, the plaintiff-appellant (hereinafter referred to as the plaintiff) in his capacity as a partner in Mahmoud Fattal and Sons Co, sued the defendants-respondents (hereinafter referred to as the defendants) for the following reliefs:

“(a) General damages for conspiracy to injure his business or trade interests or livelihood.

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(b) Perpetual injunction to restrain the defendants and all persons acting by them from continuing in such conspiracy to injure the plaintiff’s trade, business interests and livelihood or in any other way doing any act to interfere with the performance of the commission agreement contract concerning the partnership of Mahmaud [sic](2) Fattal & Sons Co of which the plaintiff is a partner.”

Additionally, as against the first and second defendants respectively, he sought these further reliefs: as against the first defendant (a) declaration that the first defendant is, as a partner in Mahmoud Fattal & Sons Co, in, “(a) a fiduciary relationship to the plaintiff and the partnership.

(b) An order for account of all moneys and other income, which have accrued since 1 January 1990 to the partnership in respect of all sales of products of the defendant company pursuant to the commission amount agreement of 8 November 1986 and payment thereof to the plaintiff of whatever sum is certified due and owing to him upon the taking of account in the proportion designated in the said partnership.

(c) Interest on whatever amount is certified due and owing to the plaintiff from 1 January 1990 up to and inclusive of date of payment.”

And finally, as against the second defendant company:

“An order for an account of the total unit of commercial vehicles and quantity of spare parts imported into Ghana from the third defendant company since 1 January 1990 in pursuance of the commission amount contract dated 8 November 1980 and made in favour of Mahmaud Fattal & Sons Co, a partnership of which the plaintiff is a partner.”

Months after the first and second defendants have entered appearance (either conditionally or unconditionally), the second defendant who had also filed his defence brought a motion praying for an order of stay of proceedings or dismissing the suit. The

[p.344] of [1999-2000] 1 GLR 331 grounds upon which the application was founded were neatly summed up in the final paragraph of the affidavit in accompaniment. These are that:

(i) The same action is pending in Lebanon between the parties.

(ii) The forum convenience is the first instance Court of North Lebanon.

(iii) The present action is an abuse of the process.

They (the second defendant) met with success for on 27 June 1996 Essilfie-Bondzie JA, sitting as an additional High Court judge not only dismissed the plaintiff’s case in its entirety, but proceeded to give judgment in favour of the defendants who have not counterclaimed for any judicial reliefs (unless, of course, paragraph (20) of the second defendant’s defence can be said to be a claim for relief). That Paragraph states: “The second defendant denies ever procuring the breach of any contract or at all involving the plaintiff in any way and says the plaintiff is not entitled to any of his claims against the second defendant.”

Being clearly dissatisfied with the decision, the plaintiff has appealed to this court on six grounds, the first of which reads:

“The learned judge was wrong in assuming jurisdiction at all in entertaining the second defendant applicant’s motion to stay proceedings or dismiss such under the inherent jurisdiction of the court when proceedings in the matter had already been stayed by another High Court Judge, Aryeetey J (as he then was) on 14 August 1995 for the purpose of reference to arbitration.”

The arguments advanced in support of this ground of appeal are so clearly stated in the written submissions, but even more importantly, so succinctly summed up in the said ground, I would not wish to restate them. I would rather turn my attention to the arguments in rebuttal. It was first, submitted that the order of Aryeetey J (as he then was) was merely interlocutory not final, and consequently did not dispose of the whole action and could therefore be revisited as and when the circumstances permitted. It was further argued that since by the subsequent adjourned date, the order which was incidentally made by consent had become incapable of performance,

[p.345] of [1999-2000] 1 GLR 331 the parties were at liberty to invoke the court’s jurisdiction for any other order that might be given in the course of the proceeding. Secondly, it was urged that because at the hearing of the motion the plaintiff never raised the issue of jurisdiction, but rather submitted to jurisdiction by filing an affidavit in opposition, he has submitted to the court’s jurisdiction and is therefore estopped from raising the jurisdictional issue at this stage. Thirdly, it was contended that at any rate, at the date of the application the matter was pending before the court in so far as none of the parties had taken the necessary steps under the Arbitration Act, 1961 (Act 38) for the arbitration proceedings to commence and consequently, the second defendant was at liberty to apply for any order or orders the court may deem fit.

It is necessary that we reproduce the order of 14 August 1995 of Aryeetey J (as he then was), an order made upon an application by the plaintiff for: (1) stay of proceedings; and (2) reference to arbitration, and which application was not opposed by the defendants. The learned justice ordered as follows: “The application for stay of proceedings and appointment of an arbitrator is granted. The plaintiff and the defendants are allowed up to the next adjourned date to agree on arbitrator.”

It is an elementary rule of law that an order of a court of competent jurisdiction remains valid and unequivocally binding until it is set aside, reviewed by the judge or the court which made the order or altered by an appellate court. Another basic principle of law which was laid down in Agyekum v Asakum Engineering and Construction Ltd [1989-90] 2 GLR 650, SC is that as a general rule of law, a judge of coordinate jurisdiction ought not to entertain an application which had been personally dealt with by another. The Agyekum case (supra), however, stated two exceptions to the rule. First, as envisaged under Order 39, r 4 of the High Court (Civil Procedure) Rules, 1954 (LN 140A) in certain situations where judgment and orders might have to be reviewed by a differently constituted court, and secondly, where a new situation is created which justifies fresh recourse to the courts. In this instant case, the position, both factually and legally, is that by 14 August 1995 the High Court had made two definitive and clear orders. The court had; (1) stayed proceedings; and, (2) ordered the parties to appoint an arbitrator for reference of the dispute to arbitration. That order, made by a court of competent jurisdiction, has not up to this date, and indeed up to the date of the

[p.346] of [1999-2000] 1 GLR 331 motion culminating in the ruling against which this appeal is brought, been set aside or varied in any manner. It follows that at the date of the hearing of the motion and the ruling complained of, the order was subsisting.

I find the argument by the defendant’s counsel that the fact that the parties found it impossible to agree on an arbitrator as ordered, entitled the defendants to apply to the court for the orders they sought, most untenable. If that were the case, since they themselves confess it was a consent order, the proper course open to them was to apply to have it vacated. But, first and at any rate, the record does not support the assertion by learned counsel that the parties found it impossible to agree on an arbitration. This thereby completely erodes counsel’s argument that they were justified in resorting to the court for the orders complained of. While it is true that Ansa-Asare Esq on 18 April did intimate to the court that attempts by the parties to agree on an arbitrator had proved fruitless, it was the defendants themselves and speaking through their solicitor Bram Larbi Esq. who denied the accuracy of that statement. He flatly denied the existence of any such difficulty and stated on the other hand that “no meeting had been held to consider the appointment of an arbitrator.” The record shows beyond every shadow of doubt that the matter was consequently adjourned to “enable the parties agree on an arbitrator.” And instead of the parties meeting to agree on one as ordered by the court, we find the second defendant submitting the application which has resulted in this instant appeal.

The question then is, how can the very persons who as defendants denied that the order of 14 August 1995 is not impossible of performance now turn round and argue or set up a contrary case and base their application on this non-existing fact? Secondly, and perhaps even more importantly, assuming even that the parties have found themselves unable to agree on an arbitrator, has Act 38 not laid down clearly elaborate procedure for the appointment of an arbitrator? Has Act 38 not made provision for all the necessary steps one party may take to have the other party either agree to his choice of an arbitrator or failing that, have the court appoint one for them? I would refer to section 14 (1)(a) of Act 38 which provides that:

“14. (1) (a) Where an arbitration agreement provides that the reference shall be to a single arbitrator to be appointed by

[p.347] of [1999-2000] 1 GLR 331 agreement between the, parties and the parties do not, after differences have risen, agree on the appointment of an arbitrator … any party may serve the other parties or the arbitrators, as the case may be with a written notice to appoint or concur in appointing an arbitrator … and if the appointment is not made within seven days after the service of the notice, the court may, on application by the party who gave the notice, appoint an arbitrator, as if he had been appointed in the manner provided in the agreement.”

In reality then, we find that no factual or legal basis existed for the application, particularly the fact now being alleged to justify Essilfie-Bondzie JA’s intervention. Little wonder then that in the supporting affidavit the defendant never alluded to this act and it therefore was never an issue upon which the application was founded and consequently that issue never arose for the court’s determination. It is therefore even improper at this appellate stage for the defendant to raise that issue in justification and defence of the application, for the application was never fought on this ground. In any event, even if that fact existed, thereby justifying a court of co-equal jurisdiction’s intervention, the order of stay of proceedings ought in my view, to have been vacated first. In my humble opinion, the order of stay of proceedings, until set aside, necessarily implies that all proceedings or processes relating to the substantive suit pending before the court shall in the interim be suspended. It follows that until the order is discharged, no application (such as the defendants’ application to dismiss the suit) or proceedings related to the cause or matter shall be taken thereunder. I think, the only applications the court may properly entertain (aside from an application to set aside or vary Aryeetey J’s order) are those related to the arbitration process itself, as for example proceedings brought under section 14(1)(a) of Act 38, the provisions under which one party may call upon a court to intervene and appoint an arbitrator for the parties where they fail to agree on one. I am therefore in entire agreement with appellant counsel that in the circumstances in which Essilfie-Bondzie JA, sitting as an additional High Court judge, found himself, he ought not to have entertained the motion on whatever grounds, be it on the grounds that (1) the same action was pending between the parties in Lebanon or; (2) the forum convenience is the North Lebanon Court; or

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(3) the present action is an abuse of the process. The learned trial judge ought to have dismissed the application.

Similarly, he ought not to have granted the prayer sought, not even the seemingly harmless prayer allowed under the statute, Act 38 and advocated for by defendant’s counsel, namely stay of “proceedings.” The reason is that it has already been granted by his brother. Certainly therefore, it was clearly wrong to grant the rather harsh and summary prayer for outright dismissal of his opponent’s case, on an application which was not even brought under any specific rule but the general inherent jurisdiction of the court. In other words, the learned trial judge did not find himself coming under any of the two exceptions stated in the Agyekum case (supra) and he therefore erred when he proceeded to hear the matter and granted the relief sought. I would on this ground alone allow the appeal, set aside the ruling and dismiss the application.

Before coming to this conclusion, I have adverted my mind to the argument advanced by the defendant’s counsel that the plaintiff is estopped from raising the jurisdictional issue since he never raised it in the court and rather submitted to the court’s jurisdiction by an affidavit in opposition on grounds other than question of want of jurisdiction. My simple answer is that the question of jurisdiction is a fundamental issue which may be raised at any stage of the proceedings and for the first time even on an appeal. Two age-old authorities for this well-known exception to the rule that a point of law relied on in an appeal must be one which was raised at the trial court, the court of first instance are: Vanderpuye v Botchway (1957) 2 WALR 16, PC; and Eboe v Eboe [1961] GLR 324. I myself think the jurisdictional ground alone is so fundamental it goes to the very root of and disposes of the entire appeal. In my opinion, I have found that Essilfie-Bondzie JA lacked jurisdiction, therefore he ought not to have proceeded further. On my part, the temptation is to hold that no useful purpose would be served by dealing with the other grounds. I would however touch on them, as these were tackled and argued with much conviction and in much depth.

One of the strongest criticisms levelled against the learned trial judge’s decision was his failure to stay the proceedings as he was enjoined to under section 8 of Act 38, when on his own showing he found that the parties were bound under the partnership agreement to submit all their differences to arbitration. This criticism is contained

[p.349] of [1999-2000] 1 GLR 331 in grounds (2) and (3), which were argued together. The argument of counsel for the plaintiff is that under the circumstances the order dismissing the action in its entirety was contrary to law.

The learned trial judge’s summation was as follows:

“Again as already canvassed, the arbitration clause in the contract under which the plaintiff has sued the defendants makes it mandatory that any dispute arising out of the contract should be taken to an arbitrator appointed by the partners to go into it. The plaintiff failed to comply with this important clause which is condition precedent to bringing an action in court. As found, the plaintiff’s right of action had not accrued before he instituted the action against the defendants. For the foregoing reasons, in the exercise of the inherent jurisdiction of the court, I hereby dismiss the plaintiff’s action.”

I agree with the plaintiff counsel that the proper order a court faced with the situation in which the trial judge confesses he found himself (the existence of a prior written agreement to submit all disputes arising under the contract to arbitration) was not an order dismissing the suit but staying proceeding as provided for under section 8 of Act 38. It states:

“8. 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.”

In my humble opinion, the court not only erred in dismissing the suit. But also, the very premises upon which the learned trial judge’s conclusion is founded (ie that the cause of action has not accrued) is untenable. That portion of his judgment states:

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“Nowhere in all the affidavits filed in the application have we been told that the partners have appointed an arbitrator for them. A look at the application brought before Aryeetey J and which culminated in his order of 11 August 1985 shows that clearly at the stage they urged or requested the court to appoint an arbitrator for them.”

With regards to ground (5) I cannot but again agree with the plaintiff’s counsel that the action in the North Lebanese court is not the same as this present suit numbered C404/95 and which has resulted in this instant appeal. First, the parties in the former are clearly different from those in this present suit. The plaintiff in this present proceedings appeared as first claimant in the Lebanese suit but there are other claimants, and the defendant in that action is certainly not one of the defendants in the present suit. The mere fact that he is indeed the chairman of the second defendant does not alter his legal capacity nor the fact that his personal capacity is entirely separate and distinct from the capacity in which the second defendant was sued. With the greatest respect to the trial judge, I think his findings and conclusions that the two actions are the same are in error, since I cannot find support for it both in law and on the facts. Secondly, the reliefs are not the same, the plaintiff having in this instant action sought more than the one relief of account of money and incomes accruing under the partnership and as against three separate companies—legal entities separate and distinct from the persons sued in the North Lebanon court. Finally on the question of the forum conveniens, I find the plaintiff counsel’s argument to which the defendant provided no answers unassailable. When the issue of the forum conveniens, or the forum competents, that is the forum for the determination of this suit was raised before the learned trial judge, he decided in favour of the North Lebanon court for the sole reason that the case in Lebanon is very likely to be completed and judgment delivered before the case in Ghana does. He thus concluded that since “there is a possibility of conflicting judgments being given by the two courts, it will be an abuse of the legal process of the court to allow the proceedings in the two courts to go on at the same time.”

The mere fact of the pendency of a similar suit (even if found to be so), is not criteria for determining the forum conveniens. Nor

[p.351] of [1999-2000] 1 GLR 331 the fact of which case would be completed first. On the contrary, that issue, as well as that of the forum competents are determined by the proper law of the contract. The proper law of the contract is, generally speaking the system of law which the parties have either expressly agreed or must be presumed to have intended to govern their rights and obligations under the contract. Thus where the parties have expressly stipulated that a particular law should govern the transaction, that law will be the proper law of the contract, the only requirement being that the choice must be bona fide and not offend against public policy: see Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 227 at 292, HL. The law therefore is that in the absence of any express stipulation, the court presumes or infers their intention from the contract as a whole and all its surrounding circumstances. In so doing, the court is guided by certain prima facie (and so rebuttable) inferences or presumptions, the primary one being the lex loci contractus.

But the age-old position of the law, from cases like Chatenay v Brazilian Submarine Telegraph Co [1891] 1 QB 79 at 82-83, CA; and Benaim & Co v Debono [1924] AC 514, PC is that in the case of a contract which is to be performed either wholly or partly in a country other than that in which it was executed, the presumption is that the parties intend the transaction to be governed by that law. The more modern authority which set the test to apply and has been relied on in a host of other cases, is Bonython v Commonwealth of Australia [1951] AC 201. In the words of Lord Simonds at 219-221: “. . . the proper law of the contract [is] the system of law by reference to which the contract was made or that with which the transaction has its closest and most real connexion … On the assumption that express reference is made to none, the question becomes a matter of implication to be derived from all the circumstances of the transaction.”

The test has been successfully applied also in Re United Railways of Havana and Regla Warehouses Ltd [1960] 2 All ER 332, HL and Miller (James) & Partner Ltd v Whitworth Street Estates (Manchester Ltd [1970] 1 All ER 796, HL. Applying these principles, my view is that though no express choice was made of the system of

[p.352] of [1999-2000] 1 GLR 331 law, having regard to the contract itself, its terms, the situation of the parties, where they operate and more importantly where the contract is essentially and wholly to be performed (in Ghana), I would think the proper law of the contract is Ghana law. In which case the trial judge’s conclusion is in error. In my view then, looked at from every angle, this appeal succeeds and must be allowed.

JUDGMENT OF BROBBEY JA.

The appellant issued a writ of summons in the High Court, Accra claiming certain reliefs. The action was based on a written agreement. The agreement contained a clause to the effect that any dispute between the parties should be settled by arbitration.

After the commencement of the action, the plaintiff-appellant (hereinafter referred to as the plaintiff) filed an application for stay of proceedings and reference of the dispute to arbitration. The application was granted by a consent order. That order was given by one High Court judge (hereinafter referred to as the first trial judge). While the order was subsisting, the same case was removed to another judge sitting as an additional High Court judge (hereinafter referred to as the second trial judge). Counsel for the defendants-respondents (hereinafter referred to as the defendants) then filed a motion to stay proceedings or to dismiss the suit under the inherent jurisdiction of the court. The plaintiff opposed the motion. After it had been argued, the entire action was dismissed by the second trial judge, in a ruling dated 27 June 1996, which also granted stay of proceedings. The plaintiff has appealed against that ruling on five grounds. I will approach this appeal on grounds which cover transfer, jurisdiction, and the principle of lis pendens and the law applicable to the agreement in question.

When the case first went before the first trial judge, he actually took some steps in the proceedings by giving four orders: These were first, the order dated 26 June 1995 granting leave to serve the writ out of jurisdiction; and secondly, an order striking out a motion to strike out the writ and that order was dated 21 July 1995. The third order granted the application for stay of proceedings and appointment of arbitrator. The last order struck out a motion for security for costs. The last two orders were made on the same day, 14 August 1995. I recount these to demonstrate that the case was actually handled by the first trial judge.

[p.353] of [1999-2000] 1 GLR 331 The order of the first trial judge gave the parties up to the next adjourned date of 4 September 1995 to agree on an arbitration. Thereafter there was a long lull in the proceedings. The next time the case was called was 18 April 1996. It was on that day that the case docket found its way to the second trial judge. While the case was pending before the second trial judge, Mr E D Kom who appeared as counsel for the defendant filed an application for stay of proceedings and dismissal of the suit.

That was the first blunder. There was no order that the case had been transferred from the first judge to the second judge. The Courts Act, 1993 (Act 459), ss 104 and 108 contain provisions by which such a case should have been transferred by the Chief Justice suo motu or on an application by the parties. None of these sections was invoked. In the absence of a formal order from the Chief Justice, it was administratively wrong for the docket to have been removed to the second judge, more especially when orders had been made by a judge of co-ordinate jurisdiction, those orders were on the docket and were yet to be carried out and the original judge was still at post and sitting in the same city of Accra. There was nothing on the appeal record to suggest that it was the litigants or their lawyers who requested the docket to be removed from one judge to the other and so none of them can be blamed for what happened. There is no basis for imputing that any of them attempted to select his own judge or forum and nothing like that is imputed to them. On the record, it would appear that it was the registry staff who are to blame for the movement of the file which ended up before the second trial judge. Even if any application was made by a lawyer or a litigant, any registry staff worth his salt should know that he or she has no power or authority to move any docket pending before one judge to another judge without the formal authorisation of the Chief Justice. If they could do that, what would the provision in Act 459 be there for?

Apart from non-compliance with statutory provisions in Act 459, which render such removal of dockets clearly illegal, there are the problems caused by the fact that some of the lawyers and litigants it the case would be waiting in one court while the docket and other lawyers and litigants in the same case will be in another court, resulting in total disarray and confusion. For these reasons, a trial judge or panel of a tribunal who receives a case docket which on its face is already pending before another judge or tribunal should

[p.354] of [1999-2000] 1 GLR 331 decline jurisdiction and promptly order the return of the docket to the original court or tribunal. This must strictly be adhered to if parties and lawyers are to avoid being accused of choosing their own forum and if chonic allegations that dockets could not be traced in our registries are to be avoided.

In terms of Act 459, ss 104 and 108, a second judge or panel before whom such a docket is sent without authorisation from the Chief Justice, has no jurisdiction to proceed to try the case. It is my view that the instant case should not have been tried by the second trial judge whose attention was drawn to the fact that the case was already pending before the first trial judge who had made some orders, as already described, and those orders had not been discharged.

The second point which deprived the second trial judge of jurisdiction over the case was that the ruling of the first trial judge ordering stay of proceedings and reference to arbitration was a consent one. This was conceded in the written submissions of counsel for the defendant. The order had not been appealed against. There are established procedures for disposing of consent orders. At least the order should be illegal, void, induced by mistake or fraud, but none of these was alleged or proved. The second judge had no jurisdiction to reopen a consent order of the type made on 14 August 1995.

Because the second judge sat as an additional High Court judge, there can be no doubt that the first trial judge and the second trial judge were judges of co-equal or co-ordinate jurisdiction. The law is now well settled that a judge of co-equal or co-ordinate jurisdiction has no authority to review, revise, reverse or nullify the orders of a court of co-ordinate jurisdiction unless the case goes back for retrial on the orders of an appellate court. There are a number of authorities for this principle, some of which were cited by counsel for the plaintiff in his written address and which I adopt in support of the proposition. They are Dankwa v Filler (1958) 3 WALR 168; Republic v High Court, Koforidua: Ex parte Nsowaa [1989-90] 2 GLR 677, SC; and Agyekum v Asakum Engineering & Construction Ltd [1989-90] 2 GLR 650, SC. The last case enunciated two exceptions to the general rule but none of those exceptions applied to the facts of the instant case.

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Another point which militated against the assumption of jurisdiction by the second trial judge will be seen from this argument: The third order of the first trial judge read as follows: “The application for stay of proceedings and appointment of arbitrator is granted. The plaintiff and the defendants are allowed up to the next adjourned date to agree on an arbitrator.” The defendant’s motion filed on 9 May 1996 was for “an order of stay of proceedings or to dismiss the suit under the inherent jurisdiction of the court and for further order or orders as to this court may seem fit.”

The order for stay of proceedings had been granted by the first judge. It had not been discharged. When the second judge was seised with the case, his attention was drawn to that order. If counsel for the defendant wanted any other order, it could not have been for stay of proceedings because that had been granted by the first judge and it was still subsisting. To the extent that the motion of the defendant applied for an order for stay of proceedings, that issue was res judicata and that rendered the motion an abuse of court process. It should have been dismissed without more. The result was that if the view is taken that the second trial judge had jurisdiction to deal with the matter, the issue of “stay of proceedings” had been granted by the first trial judge and so the application for stay of proceedings by the late E.D. Kom raised an issue which was already res judicata.

Another significant ground or point which affected jurisdiction was that although the motion paper and supporting affidavit filed by the late E.D. Kom prayed for an order of stay of proceedings or dismissal of the suit, in his argument in court he never referred to the order to dismiss the suit. His entire argument centered on the order for stay of proceedings. The trial judge should have considered the application for the order to dismiss the suit as having been abandoned so that he could have dismissed the entire motion for that reason and for the reason that the motion for stay of proceedings had already been granted.

Lastly, the late E.D. Kom based his motion to dismiss the suit on the inherent jurisdiction of the court. He cited no order in the High Court (Civil Procedure) Rules, 1954 (LN 140A) to support his motion. It was rather the second trial judge who suo motu relied on Order 25. rr 1 and 2 of LN 140A to dismiss the suit. If any authority was required to dismiss the suit based on the inherent jurisdiction it was Order 25, 4 of LN 140A Order 25, r 1 of LN 140A dealt with

[p.356] of [1999-2000] 1 GLR 331 demurrer of actions and Order 25, r 2 of LN 140A dealt with point of law which disposed of the whole action or a substantial portion thereof. The points raised in Mr Kom’s motion did not dispose of the entire case to warrant the suit being dismissed by the judge. I will refer to this issue in the last paragraph of this judgment.

To my mind, the most important point in this appeal was that the agreement which formed the basis of the suit contained this clause: “Any dispute among the partners shall be settled by an arbitration through one arbitrator appointed by the partners.” The parties had appeared before the first court for an order to appoint an arbitrator. That was still pending. The well established position in law is that if proceedings are commenced in court by parties bound by an arbitration clause, the proceedings should be stayed for the parties to exhaust arbitration proceedings before the case will proceed in court. This is well spelt out in the Arbitration Act, 1961 (Act 38), s 8 and in E.D. Kom, Civil Procedure in Ghana (3rd ed), at p 10. The suit need not be dismissed outright to be reinstituted if the arbitration breaks down. The order of the first trial judge granting stay of proceedings and reference to arbitration was thus well founded in law. If any of the parties were aggrieved, the proper course of action was to appeal against it, or to have applied for its review or for it to be set aside.

In the end, the appeal record before us indicated that there were two orders by two judges of co-ordinate jurisdiction. So long as the first order remained undischarged, the second order dismissing the entire suit amounted to a review or revision of the first order. The second trial judge had no jurisdiction to vary, revise, reverse, cancel or nullify the first order. Counsel for the defendant sought to explain this by arguing that the order of the first trial judge was an interlocutory order which could be revisited at any time. If the order had to be revisited, the proper forum was the court of the judge who made the order who was at post and was still sitting, not that of an entirely different judge. If the parties could not agree on an arbitrator before the next hearing date, the proper procedure was that they should have reappeared before the judge who made the order to assist them to appoint another one as required under section 14 of Act 38.

Counsel for the defendant further submitted that by filing an affidavit in opposition the plaintiff submitted to the jurisdiction of

[p.357] of [1999-2000] 1 GLR 331 the court. That argument is untenable because the issue jurisdiction can be raised at any stage of the proceedings, even on appeal. A classic case was Amoasi III v Twinto [1987-88] GLR 554, SC. In that case, a dispute was tried in the Eguafo Traditional Council. It proceeded on appeal to the Central Regional House of Chiefs and finally the National House of Chiefs. When an appeal was lodged to the Supreme Court, the issue of jurisdiction was raised for the first time. The Supreme Court upheld that submission on jurisdiction and ruled that none of the earlier institutions had jurisdiction over the action. The proceedings before them and their decisions were all declared void and quashed. In the instant case, the second judge had no jurisdiction to have proceeded with the trial and the fact that the parties filed processes did not clothe him with jurisdiction when none existed.

One of the points canvassed in this appeal is that a similar action had been instituted in the Lebanon and so the instant action in Ghana is an abuse of process. I do not subscribe to that view. My reasons are the same as those expressed by Wood JA in her judgment, which reason I adopt to avoid repetition. I hold the same views on the law applicable as expressed in her judgment. My view is that the second trial judge had no jurisdiction to have entertained the case. For that want of jurisdiction, all that transpired before him was a nullity and so were all the orders he made.

For the foregoing reasons, I would allow the appeal and set aside the ruling of the second trial judge, so that the case takes its normal course in accordance with the rules before another judge.

DECISION Appeal allowed. LSNA

Endnotes

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