Court restrains Cassius Mining from seeking Int. Arbitration over $300M sum

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The High Court in Accra has stopped Cassius Mining Limited, an Australian-owned mining Company from seeking international Arbitration against Ghana involving the sum of $300 million.

This follows an application for interim injunction filed by the Attorney General, (AG), Godfred Yeboah Dame, for the court to restrain Cassius Mining (Respondent) from embarking on what it described as an “abusive process of forum shopping.”

Cassius Mining Limited had intended to institute or pursue an arbitration outside the jurisdiction of Ghana under the Prospecting Licence Agreement dated 28 December 2016 which has raised some disputes over the sum of $300M.

Ruling on the application on Monday, July 31, the last working day before the Judiciary embarked on an a-two-month legal vacation, Justice Akua Sarpomaa Amoah, said “The respondent (Cassius Mining) is restricted from instituting any international arbitration or taking any steps to initiate an international arbitration until the arbitration initiated at the Ghana Arbitration Centre by the respondent if determined.”

The Court in its ruling observed that Counsel for Respondent argued that it is not a citizen of Ghana and is not controlled by Ghana, however, the company in its affidavit in opposition confirms that it is a company incorporated in Ghana and it is its mother company that is incorporated in Australia.

Justice Sarpomaa Amoah in her ruling said, there can be no doubt that the Respondent is a citizen of Ghana as it was incorporated under Ghanaian laws despite the fact that its mother company is incorporated in Australia.

The Court said, the two companies are separate and that the Respondent’s resort to international arbitration is a “misdirected step.”

“Arbitration agreement are like any other contract which are by law binding and enforceable,” Justice Sarpomaa Amoah ruled and said, “The Respondent cannot now be heard to say that a proper neutral avenue be chosen because it involves the government of Ghana.”

“The Respondent (Cassius Mining) has not shown that continuing with arbitration in this jurisdiction are arbitrary are justified.

“I think the applicant (Attorney General) has succeeded in showing that its application is not frivolous.

“The balance of convenience also tips in favour of the applicant as allowing the Respondent to resort to International Arbitration is not only arbitrary but will incur costs on the Ghanaian taxpayers,” Justice Sarpomaa Amoah ruled.

The Court also ruled that, the Respondent has failed to demonstrate that it stands to suffer greater inconvenience if this application (for interim Injunction) is granted.

It said, it was because the Respondent considered that it will not suffer any unconvinced by the matter being determined in this jurisdiction that it submitted the first arbitration to the Ghana Arbitration Centre (GAC).

“Such conduct which infringes on the sovereignty of Ghana cannot be remedied. The Respondent is restricted from instituting any international arbitration or taking any steps to initiate an international arbitration until the arbitration initiated at the GAC by the respondent if determined.”

EIB Network’s Legal Affairs Correspondent, Murtala Inusah, reports that, the Court had earlier dismissed the Respondent’s preliminary objection against the AG’s motion for injunction.

AG’s motion for injunction

The Attorney General, Godfred Yeboah Dame, filed the application at the Commercial Division of the High Court, Accra seeking an order of interim injunction restraining Cassius Mining Limited, an Australian-owned mining company from instituting or pursuing any arbitration outside the jurisdiction of Ghana under the Prospecting Licence Agreement dated 28 December, 2016.

Additionally, the AG was also seeking to stop the company from taking any step whatsoever in international arbitration proceedings against the Government of Ghana until the arbitration instituted by Cassius Mining Limited against Government of Ghana at the Ghana Arbitration Centre in 2018 has been heard and determined.

It would be recalled that earlier in the years, Cassius Mining instituted international arbitration against the Government of Ghana at the Permanent Court of Arbitration claiming about US$300 Million, which was suspended following objections by the Attorney-General.

Notwithstanding this, the Australian-owned company has made attempts at resorting to other international arbitration forum to pursue its quest of instituting international arbitration against Ghana.

Backing his application with many voluminous documents, the Attorney General states that, on 12 October, 2016, Cassius Mining Limited applied for a prospecting licence from the Government of Ghana covering 13.791 km2 of the Gbane/Datoko area in Talensi, Upper East Region of Ghana.

This was granted by the Government of Ghana on 28th December, 2016 for a term of two years expiring in December, 2018. The A-G contends that clause 21 of the Prospecting Licence Agreement specifically required any question or dispute that arises regarding the rights, powers, duties and liabilities of the parties thereto, to be referred to arbitration in accordance with the Alternative Dispute Resolution Act, 2010 (Act 798) of Ghana.

In this regard, following allegations by Cassius Mining of what it considered to be unlawful and arbitrary actions by the Government of Ghana, the company by a letter dated 14 June 2018, notified the AG of its referral of the dispute between the parties to arbitration under the auspices of the Ghana Arbitration Centre in accordance with the Minerals and Mining Act, 2006 (Act 703) and clause 21 of the Agreement between the parties.

On 26 June 2018, the Australian-owned company indeed, referred the dispute to arbitration at the Ghana Arbitration Centre pursuant to clause 21 of the Prospecting Licence Agreement and the Alternative Dispute Resolution Act, 2010 (Act 798). It proceeded to file a Statement of Claim at the Ghana Arbitration Centre claiming a number of reliefs.

The AG stated that on 9 January, 2019, Ghana filed an Answer to Cassius Mining’s Arbitration at the Ghana Arbitration Centre. Following this, a three-member arbitral tribunal comprising Mr. Emmanuel Amofa, Mr. Kizito Beyuo, and Professor Albert Fiadjoe was duly constituted for the hearing of Cassius Mining’s claim.

Mr Dame says that, in spite of the pendency of the arbitration proceedings at the Ghana Arbitration Centre and in the face of the clear provisions of the arbitration provisions under the Prospecting Licence Agreement and Ghana’s Alternative Dispute Resolution Act, Cassius Mining on 3 February 2023, instituted international arbitration proceedings against the Government of Ghana in respect of the same subject matter, claiming total amounts of almost US$ 300 Million, under Article 3.1 of the UNCITRAL Arbitration Rules as adopted in 2021 (UNCITRAL Rules).

The A-G observes that quite curiously, Cassius Mining titled the originating process “IN THE MATTER OF AN ARBITRATION UNDER A PROSPECTING LICENCE AGREEMENT DATED 28 DECEMBER 2016”. Cassius Mining proposed in that Notice of Arbitration, that the Secretary-General of the Permanent Court of Arbitration at The Hague (PCA) serve as the appointing authority for the said arbitration and that, the arbitration be administered by the PCA.

The Attorney General submits that Cassius Mining instituted the international arbitration proceedings even though the “UNICTRAL Rules” is not referred to in the Prospecting License Agreement.

Further, Cassius Mining knew that the Permanent Court of Arbitration is not mentioned in the Prospecting License Agreement and that, the Ghana Arbitration Centre has been administering the arbitration between the parties regarding the same Prospecting License Agreement as far back as 2019.

The AG states further that, in a Response to the notice of arbitration dated 17 March, 2023, the Government of Ghana raised objections to the institution of the international arbitration by the Australian-owned mining firm and requested the tribunal to declare the proceedings instituted by Cassius Mining “a legal nullity and the arbitration terminated”.

The AG further indicated that he will raise a preliminary objection to the jurisdiction of the PCA in a bifurcated phase of the Arbitration to avoid unnecessary expenditures of time and costs for the Parties and the Tribunal.

The Permanent Court of Arbitration (PCA) on 20 March, 2023, invited Ghana to confirm whether it agrees to the PCA administering this arbitration, as proposed by the Claimant, Cassius Mining.

The Attorney General by a letter dated 27 March, 2023, raised vehement objections to the jurisdiction of the PCA and asked the PCA to determine as a preliminary matter, whether it has jurisdiction in the matter or any role to play in the dispute between the parties.

The AG states that “the clear abuse of process and reprehensible attempt at forum shopping was not lost on the Secretary-General of the Permanent Court of Arbitration”, as, by a letter to the parties dated 30 March 2023, the PCA decided that “the PCA Secretary-General may act as appointing authority under the UNCITRAL Rules if all parties so agree. The PCA understands that no such agreement has been reached in this matter”.

The PCA further decided that there is no arbitral tribunal for the dispute constituted since the parties have not agreed.

The AG asserts that the effect of the decision of the PCA is that the international arbitration commenced by Cassius Mining Limited under the UNCITRAL Rules could not proceed unless the parties including the Government of Ghana, had agreed for the Permanent Court of Arbitration to appoint a tribunal.

Given that the parties had not agreed (either in the Prospecting Licence Agreement or in any document) to submit the dispute between the parties to the jurisdiction of an international arbitration tribunal under the UNICTRAL Rules, it was clear that a dispute between the parties could never be submitted for determination by such a forum.

Faced with this legal stumbling block in the pursuit of international arbitration against Ghana, Cassius Mining instead of returning to Ghana to continue with the ongoing arbitration at the Ghana Arbitration Centre that the company itself had earlier instituted, instituted another international arbitration proceeding by purporting to file what it described as an “Amended Notice of Arbitration” this time entitled “IN THE MATTER OF AN ARBITRATION UNDER THE UNCITRAL ARBITRATION RULES (2021)”.

The AG says that he has refused to respond to the Amended Notice of Arbitration as same is a nullity. Consequently, no arbitral tribunal has been constituted for the hearing of this new international arbitration.

The Attorney General submits that the recourse by Cassius Mining to international arbitration is a gross abuse of process and most oppressive of the Government of Ghana as, in Clause 21 of the Prospecting License Agreement, the parties have agreed that their dispute “shall be referred to arbitration in accordance with the Alternative Dispute Resolution Act, 2010 (Act 798).” Nowhere have the parties agreed that their disputes would be resolved “UNDER THE UNCITRAL ARBITRATION RULES (2021)”.

The AG observes that in both the original international Notice of Arbitration and Amended Notice of Arbitration, Cassius Mining has proposed that “the seat of arbitration be London”.

In the view of Mr Dame, Cassius Mining clearly is keen on enabling the High Court of England & Wales to have supervisory jurisdiction over the arbitration instead of the courts of Ghana, as stated in Act 798 the agreement between the parties.

The AG submits that, by Clause 21 of the Prospecting License Agreement entered into between Cassius Mining and the Government of Ghana, the arbitration law governing the resolution of disputes between the parties is the Alternative Dispute Resolution Act, 2010 (Act 798) which grants the High Court of Ghana the power to supervise the arbitral proceedings, and not the High Court of England and Wales.

The Attorney General prays for an injunction to restrain the Australian-owned mining firm from pursuing any fresh international arbitration on the ground that this amounts to forum shopping.

Mr. Dame submits that Cassius Mining’s forum shopping efforts also constitute an attempt to strip the High Court of Ghana of its statutory jurisdiction to supervise arbitration instituted domestically.

The AG finally contends that unless restrained by the High Court of Ghana, the Australian-owned company will continue searching for an international forum that will support its breach of Clause 21 of the Prospecting License Agreement and undermine the domestic proceedings currently pending before the Ghana Arbitration Centre, which the company itself instituted way back in 2018.

The AG contends that if the court does not restrain Cassius Mining, apart from condoning a blatant violation of the rights of the Republic of Ghana and a denial of the jurisdiction of the High Court of Ghana, the company’s forum-shopping activities will result in unnecessary cost and expense to the Government of Ghana.