POLIMEX (POLISH EXPORT & IMPORT) CO., LTD. v. B.B.C. BUILDERS & ENGINEERS CO., LTD. [1968] GLR 168

DIVISION: HIGH COURT, ACCRA

DATE: 16 FEBRUARY 1968

BEFORE: EDUSEI J.

NATURE OF PROCEEDINGS

RULING on a preliminary objection that the High Court had no jurisdiction in the matter and secondly that the action was premature. The facts are fully set out in the ruling.

COUNSEL

Albert Asafu-Adjaye for the plaintiffs.

Fred Odoi for Kudjawu for the defendants.

[p.170] of [1968] GLR 168

JUDGMENT OF EDUSEI J.

The plaintiffs instituted an action against the defendants for the sum of £G24,489 18s. 8d. being the balance of account due and owing on goods sold and delivered by the plaintiffs to the defendants. The plaintiffs in the course of time filed a summons for directions and among the issues was “whether or not the defendants’ statement of defence discloses any ground of defence to the plaintiffs’ claim.” The defendants also filed additional issues which for the purposes of this ruling are not important. This was on 11 February 1967. The defendants filed a defence on 28 February 1967 disputing liability and counterclaimed for an account. On 11 July 1967 the court set down for hearing on 28 July 1967 the point raised in the plaintiffs’ summons for directions as to whether or not the defence discloses any reasonable defence to the plaintiffs’ claim. There have been eight adjournments whenever the preliminary point came up for hearing and on 10 January 1968 the defendants’ solicitor filed a notice of amendment of his statement of defence by which he pleaded that the courts of Ghana had no jurisdiction to entertain the action. The amendment was granted and it became necessary for the court to take arguments on jurisdiction of the courts of this country—whether or not the courts of Ghana had jurisdiction to hear and determine the suit. This ruling therefore is in respect of the jurisdiction of Ghanaian courts. It is interesting to note at this stage that by an agreement dated 4 February 1965 the parties herein settled the accounts between them, and it is in respect of the balance of the settled accounts that the action was commenced. The agreement dated 4 February 1965 was tendered in evidence by consent as exhibit A.

On 5 February 1965, another agreement was concluded between the parties and this is exhibit B. In paragraph (12) of exhibit B appears the following arbitration clause: “all differences or disagreements between parties concerning this contract shall be finally settled by the Arbitration Court at the Polish Chamber of Foreign Trade in Warsaw.”

It is this arbitration clause upon which the defendants are relying to oust the jurisdiction of the Ghanaian courts. Counsel for the defendants is contending that the proper forum for the determination of the suit between themselves and the plaintiffs is the Arbitration Court at the Polish Chamber of Foreign Trade in Warsaw.

It is interesting to note that no mention of the settled accounts as stated in exhibit A is referred to in exhibit B which was a later agreement. The preamble to exhibit A shows clearly that the settled accounts related to transactions covered by a consignment store agreement between the parties and dated 30 March 1962; exhibit B [p.171] of [1968] GLR 168 concerned transactions covered by two consignment store agreements dated 3 March 1962 and 5 December 1963.

It is evident therefore that the plaintiffs’ claim which is founded on exhibit A has nothing to do with the transactions recorded in exhibit B. The plaintiffs attached to their writ of summons a statement of account which took into account or consideration the six payments made by the defendants between 29 March 1965 and 22 October 1966.

I am at a loss to appreciate the contention of learned counsel for the defendants since there is no provision in exhibit A referring any matter to arbitration in Warsaw, Poland.

Assuming that there was such a provision in exhibit A. I am prepared to hold that by their conduct the defendants have waived their rights to oust the jurisdiction of these courts of Ghana in that they did not enter appearance conditionally or under protest. They have taken some steps in the proceedings by filing a defence and counterclaim; they filed additional issues when the application for summons for directions came on for hearing; they were ordered by the court, on the plaintiffs’ application to supply further and better particulars to the plaintiffs and these were filed and in them it is of some interest to remark that the defendants stated certain payments made by them to the plaintiffs, which according to the defendants, were not reflected in the accounts attached to the writ of summons. In all these pleadings the defendants never either expressly or by implication challenged the jurisdiction of the courts of this country, until at this hopelessly late time on 10 January 1968. The proper course in a legitimate case was for the defendants to have entered appearance conditionally or under protest and then move the court to set aside the writ of summons for lack of jurisdiction or alternatively for a stay of proceedings. This they failed to do and by taking the various steps already referred to in the proceedings they have waived any objection to the jurisdiction of the court: see Elias Moubarak v. Holland West Afrika Lijn (1953)14 W.A.C.A 262.

In conclusion I wish to refer to The Fehmarn case reported in [1958] 1 W.L.R. 159, C.A. It is a case illustrative of the reasons for the attitude of the English courts in assuming the power to hear and determine a suit whenever the parties have agreed to refer their differences to some other foreign forum. It is a case pregnant with much learning in the field of private international law. In this case there was an express term in the bill of lading that all claims and disputes arising thereunder “shall be judged in the U.S.S.R.” The plaintiffs, an English company, and the holders of a bill of lading which acknowledged the shipment at a Russian port, in apparent good order and condition, of a cargo of turpentine by a Russian [p.172] of [1968] GLR 168 organisation for carriage to London, began an action against the owners of the German vessel in which the turpentine was carried for damages arising out of a dispute under the bill of lading, it being alleged that, on delivery in London, the turpentine was discovered to be contaminated. The defendants relying on the clause already mentioned moved for an order that the writ of summons be set aside for want of jurisdiction, or alternatively that the action be stayed. Willmer J. held that the court had jurisdiction and refused to stay the action. On appeal the Court of Appeal confirmed the judgment of the trial court and Lord Denning went on to say at p. 162: “I do not regard the choice of law in the contract as decisive. I prefer to look to see with what country is the dispute most closely concerned. Here the Russian element in the dispute seems to me to be comparatively small. The dispute is between the German owners of the ship and the English importers. It depends on evidence here as to the condition of the goods when they arrived here in London and on evidence of the ship, which is a frequent visitor to London . . .

I think the dispute is more closely connected with England than Russia, and I agree with the judge that sufficient reason has been shown why the proceedings should continue in these courts and should not be stayed.”

I must confess that I am very much attracted by the reasoning in Lord Denning’s exposition of the law even though some jurists will contend that such a decision strikes at the very foundation of the principle of freedom in the making of contracts. But of course every case is decided on its own merits.

In the case before me the goods were shipped from Poland by the plaintiffs to the defendants in Ghana at the latters’ own request, the defendants are a limited liability company carrying on business in Ghana. Exhibits A and B were entered into in Ghana. By their defence the bulk of the defendants’ evidence is available in Ghana: for instance, the condition on their arrival in Ghana of some of the goods sold to the defendants; and payments allegedly made by the defendants on the plaintiffs’ behalf to persons in Ghana. I think it is proper and legitimate for me to take into consideration matters of convenience, and I have no doubt in my mind that it would cause greater hardship and inconvenience and expense to the defendants themselves if this case were to be determined in Poland. I am of the view that the dispute is more closely connected with Ghana than with Poland. There seems to me to be no doubt that such a dispute between the parties herein is one that properly belongs for its determination to

[p.173] of [1968] GLR 168 the courts of this country, and if it had been urged upon me by the defendants to stay proceedings (but they did not) I would be perfectly entitled in these circumstances to exercise my discretion against them.

The defendants’ counsel as a last resort invited the court to hold that the action is premature because his clients have not received any final confirmation of exhibit A from the plaintiffs. Counsel was relying on the last clause in exhibit A which is couched in these words, “This arrangement is subject to final confirmation by the management of Polimex.” This exhibit A is the one which settled the accounts between the parties and the settled figure arrived at was £G40,433 14s. 7d. but at the time of the institution of the action the amount that stood unpaid was £G24,489 18s. 8d. I do not see how the clause referred to by the defendants’ counsel does avail his clients. Doubtless, counsel appears to have been mesmerised by the phrase “subject to final confirmation”—a phrase that is familiar to every student of the law of contract. The courts will not be deterred from proclaiming the existence of a contract merely because the parties, after agreeing in substance to the terms of the contract, introduce a phrase or clause which when examined, is found to be without significance. Thus Denning L.J. (as he then was) was able to say in Nicolene Ltd. v. Simmonds [1953] 1 Q.B. 543 at pp. 551-552, C.A. that: “It would be strange indeed if a party could escape from every one of his obligations by inserting a meaningless exception from some of them . . . You would find defaulters all scanning their contracts to find some meaningless clause on which to ride free.” Hodson L.J. also said in the same case at p. 553 that: “I do not accept the proposition that because some meaningless words are used in a letter which contains an unqualified acceptance of an offer, that those meaningless words must be relied on by the acceptor as enabling him to obtain a judgment in his favour on the basis that there has been no acceptance at all.”

In this case exhibit A had been executed by Polimex, the plaintiffs, as well as by the defendants. Surely whoever signed for Polimex did so on behalf of the management of Polimex and what sort of confirmation did the defendants expect the plaintiffs to give? All essential matters had been agreed upon in exhibit A and I do not suppose any court will lend its support to such a subsidiary and meaningless addendum. A fortiori the position of the plaintiffs is stronger in this case because the part-payments made by the defendants and accepted by the plaintiffs constitute sufficient evidence of confirmation of exhibit A by the plaintiffs. [p.174] of [1968] GLR 168

My view therefore is that there is no substance in any of the points raised by the defendants.

I rule in the circumstances that the courts of Ghana have jurisdiction to hear the suit, and the case is to proceed.

Costs of N¢50 to the plaintiffs against the defendants.

DECISION

Preliminary objections overruled.

S. K. T.