Mediating Corporate Governance Disputes

An international Experts Workshop organised by the Global CorporateGovernance Forum

Mediation and Arbitration Centres: The Ghanaian caseMarian Barnor LL.B.BL; MBA

MRB ConsultMember, Ghana Arbitration Centre

Member, Commonwealth Association of Corporate Governance

12th February 2007

The Context - Ghana

• Ghana, the ‘Golden Age’ of business• Private sector; the engine of growth• Window of business in the West African region.• Ghana Investment Promotion Centre - GIPC

Corporate Governance in Ghana

• Waking up to Principles of Corporate Governance

• Legal framework for CG:Companies CodeStock Exchange Listing regulationsSEC Act /CG GuidelinesSpecific industry laws

• Internal measures

Corporate Governance - Conflict Areas

• Business relationships bring conflicts and disagreements

• Areas of conflicts:

Interpretation of agreements that underpin the relationship

Bad drafting

Conflict of interest situations

Calibre of managers and directors

Lack of transparency

Accountability

Resolving Conflicts

• Litigation is the traditional conflict resolution method• Litigation kills investment and is counterproductive• Commercial ‘Fast Track’ courts.• Need for an alternative dispute resolution process has been established even by the courts.

Using ADR to resolve CG disputes

• In Ghana ADR has been in the form of Mediation and Arbitration

• Legal Framework recognises and promotes ADR

• Ghana Arbitration Act, 1961; Act 38 is the principal law governing Arbitration in Ghana

• Ghana Investment Promotion Centre Act 1994 (ACT 478) – provides as one of the options open to an investor involved in a dispute with the government arbitration in accordance with the rules of the procedure for UNCITRAL.

Using ADR to resolve CG disputes

•Same Act refers to arbitration under the Ghana Arbitration Centre rules.

• S.29 of Act 478 or S32 of the Free Zone Act- suggest negotiation as the first step in resolving disputes between the investor and government.

• Labour Act, 2003 (Act 651) has provision on the settlement of industrial disputes. It has provisions on settlement of industrial disputes by negotiation, mediation, voluntary arbitration and compulsory arbitration.

• Order 58 (6) of the High court (Civil Procedure) rules 2004 incorporates ADR into the normal judicial process.

•Banks practicing ADR through re-structuring of loans

Ghana Arbitration Centre (GAC)

GAC is an autonomous, non-profit-making institution, incorporated in Oct.1996As a company limited by guarantee.

Ghana Arbitration Centre (GAC)

GAC is the foremost institutional arrangement established in Ghana whichprovides the forum and system for dispute resolution through arbitration andOther ADR mechanisms

Institutional infrastructure for investment promotion

Centre has Rules that govern the conduct of dispute settlement

Public education initiation

Publication of proceedings of the centre and papers on ADR

Study and research in ADR

Affiliate and co-operate with any other centres

Provide accreditation for members of the centre

National panel of 15 arbitrators.

Activities of the Centre (GAC)

• Handled approximately 30 cases so far

• Suggested Arbitration clause: ‘Any dispute, controversy, claim or interpretation arising out of or relating to this contract, or the breach of this contract, shall be finally settled by arbitration under the auspices and Rules of the Ghana Arbitration Centre by one or more

arbitrators appointed in accordance with the Rules of the Ghana Arbitration Centre.’

• Provides administrative support for arbitration proceedings

•Training

•Sensitization seminars

Challenges of the Centre (GAC)

Slow conversion to ADR:

• Suspicion about non-adversarial approach

• Resistance from Lawyers

• Lack of training

• Bad drafting techniques

• Lack of funding

• Number of arbitrators

Enhancing role of Ghana Arbitration Centre to offerCG mediation services

•Educate general public especially corporate institutions

•Train lawyers to convert from litigation to mediation

•Train arbitrators

•Institute capacity building for the centre

•Funding for the Centre

•Effective co-operation agreements with other arbitration centres.

Conclusion

• Confidence and Credibility for the Ghana Arbitration Centre in the best interest of Corporate bodies to ensure sustainability of companies.

• ‘It is in the light of these realities that the Ghana Arbitration Centre should be embrased by corporate Ghana as a welcome addition to the institutional infrastructure for dispute settlement in Ghana.’

Ruth NyakoteyAg. Chief Executive GIPC2004 Ghana Club 100 Magazine

Thank you