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Ghanaian Law Governs $300M Cassius Mining Dispute

PCA Rules, Accra Sets Arbitration Stage Against Cassius

by Adenike Adeodun

The Permanent Court of Arbitration (PCA) in The Hague has made a decision that Ghanaian laws will govern the ongoing dispute between Cassius Mining, an Australian firm, and the Government of Ghana (GoG). This ruling highlights the intricate relationship between international arbitration processes and national legal systems, especially in cases that involve significant financial claims and the management of national resources.

Cassius Mining has started an arbitration process claiming damages of around $300 million. They allege that the Government of Ghana (GoG) failed to renew their prospecting license, which was essential for the company to continue their mining operations in Ghana. The case hinges on whether the GoG had the right to refuse the renewal and whether this refusal breached the agreement between Cassius and the GoG or the mining laws in Ghana.

The decision made by the PCA to establish Accra as the seat of arbitration, instead of London as suggested by Cassius, is highly significant. This is because the choice of the arbitration seat determines the legal framework that will be applicable and the supervisory powers that will oversee the arbitration proceedings. By selecting Accra as the seat, the PCA has confirmed that the proceedings will be bound by Ghana’s legal system, specifically the High Court’s supervisory jurisdiction and the Alternative Dispute Resolution Act of 2010 (Act 798). This act outlines the processes and procedures for resolving disputes in the country, which includes the ability for parties to directly challenge arbitration awards or decisions through the High Court.

The tribunal has decided to reject the GoG’s request to dismiss the arbitration on jurisdictional grounds. Additionally, it has refused to stay the proceedings which indicates a strong commitment to continue the legal process, despite the GoG’s objections. This suggests that while the PCA respects Ghanaian legal sovereignty as far as procedural matters are concerned, it retains the authority to make determinations on substantive legal issues presented in the case.

From the perspective of international legal practice, this case illustrates the delicate balance arbitration tribunals often must maintain between respecting the legal frameworks of sovereign nations and ensuring fair treatment for foreign investors under international law. The tribunal’s ruling effectively enforces the principle that, in international arbitrations involving state entities, national laws can play a decisive role in determining the outcome of disputes, especially when they involve natural resource management—a sector often fraught with high stakes and significant impacts on national economies.

Moreover, this case reflects broader themes in international arbitration, such as the enforceability of arbitration agreements and the extent to which national courts may intervene in or influence international arbitration proceedings. The imposition of an injunction by the Commercial Division of the Accra High Court in July 2023, preventing Cassius from pursuing arbitration outside Ghana, is indicative of the proactive measures national courts may take to protect what they perceive as national interests. The court’s rationale—that allowing international arbitration could impose undue financial burdens on Ghanaian taxpayers and that the government would face greater hardships if arbitration were conducted abroad—underscores the intrinsic link between national interests and international legal proceedings.

Additionally, the rejection of Cassius Mining’s prospecting license renewal in 2018, cited by the A-G as unsupported by Parliamentary ratification as required under Article 268 of the 1992 Constitution, highlights the importance of adhering to statutory and constitutional provisions in international business operations. This legal backdrop frames the dispute not just as a contractual disagreement but also as a constitutional matter, further complicating the resolution process and illustrating the multifaceted nature of such disputes.

The PCA’s decisions and the ongoing legal proceedings in Ghana serve as a critical examination of how international arbitration interfaces with national legal systems. They reflect the ongoing tension between globalization and sovereign governance, especially in sectors vital to a nation’s economy. As the case progresses, it will likely serve as a benchmark for similar disputes globally, offering insights into best practices for balancing corporate interests with national legal requirements and public policy concerns.

Source: Graphic Online

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