ARTICLES
 

ARBITATION IN THE GAMBIA

Arbitration practice in The Gambia is governed partly by statute and partly by the common law. The body of statute is derived from the English Arbitration Act of 1889 (1) which was a consolidating and amending statute made applicable to other British colonies like The Gambia by Order in Council. The 1889 Act was enacted in The Gambia in two parts. The first part as the Arbitration Act, 1950 and the second part incorporated into the rules of the Supreme Court.

These legislation provide for two regimes of arbitration. The 1950 Act gives effect to an agreement to submit disputes to arbitration. The rules of court on the other hand apply to a situation where the parties to legal proceedings agree to refer certain matters in issue to the decision of arbitrators and the court accedes to their request by granting a reference order.


ARBITRATION UNDER THE 1950 ACT

The Act provides for the reference and submission of disputes to arbitration. An arbitration clause is referred to as a submission, which is in turn defined as a written agreement to submit present or future differences to arbitration whether an arbitrator is named therein or not. The Act provides for the enforcement of such a clause by providing that it shall have the same effect in all respects as if it were an order of court. Such a clause is irrevocable except by leave of court unless a contrary intention appears in the agreement. The form of an arbitration agreement is not prescribed. A dispute as to the scope of an Arbitration agreement would be within the jurisdiction of the court to determine. The courts in this regard have given such clauses as wide an interpretation as would give effect to the agreement of the parties to settle their differences through arbitration.

The courts will enforce the arbitration clause by staying any proceeding which is commenced by any party to a submission or any party claiming under him in respect of any matter which is by the submission agreed to be referred, on the application of the other party. The application has to be made before any fresh step is taken, otherwise the parties will be deemed to have submitted to the jurisdiction of the courts and arbitration will not be ordered.

The court is further empowered to support the arbitration. Whereas there is no formality in the manner of appointment of an arbitrator and the parties may not be interfered with in this regard, the court may appoint an arbitrator, umpire or third arbitrator under certain circumstances. Where in a reference to a single arbitrator the parties fail to cocur; or where an arbitrator refuses to act, is incapable of acting, or dies and the parties do not supply the vacancy even though there was nothing stopping them from doing so; or where the parties fail to appoint an umpire or third arbitrator; or an umpire or third arbitrator refuses to act, is incapable of acting, or dies, and a party or the arbitrators fail to act even though notice was given by the other party. The party who had given notice should make the application to the court. Where a party fails to appoint an arbitrator after due notice to him, the other party may appoint a sole arbitrator whose award will be binding as if the defaulting party had consented to it. It should be noted however that preference is given to a sole arbitrator and where no mode of reference is prescribed the reference shall be deemed to be to a single arbitrator.

The Schedule to the Act also provides procedural rules which are deemed to apply where no specific procedure is provided for by the reference. Thus the arbitrators have a period of three months within which to make their award or such longer period as they may from to time agree. If the three months or the extended time expires without an award being made, or the arbitrators have failed to agree the umpire may forthwith enter upon the reference in lieu of them. The umpire has a month and may extend this period from time to time. The parties and their witnesses are obliged to testify and produce documentary evidence and such other things as may be required by the arbitrators. The costs of the proceedings is at the discretion of the arbitrators or umpire who should direct by whom and in what proportion such costs shall be paid and may even determine the cost to be paid as between legal practitioner and client.

Arbitrators are required to determine issues and make awards. They are empowered, unless a contrary intention is expressed in the submission, to administer oaths and affirmations to the parties or witnesses and to sub-poened witnesses. Witnesses may be liable to all the disadvantages and penalties as in normal court for contempt and perjury. They also have the power, after an award has been made, to correct any clerical mistake arising from any accidental slip or omission.

The court exercises supervisory jurisdiction over the arbitration proceeding. Thus it may extend the time within which an award may be made. It may issue subpoena in support of the proceedings to compel the attendance of any witness wherever he may be within The Gambia.

Arbitrators may also, if they have any doubts, either during the pendency of the proceedings or after an award has been made, seek the opinion of the court on any legal issue or on the whole or a part of the ward.

In the exercise of this jurisdiction the court may remove an arbitrator for misconduct. An award made by the arbitrators or umpire shall be final and binding on the parties and the persons claiming under them respectively. Under the Act an award may be challenged on the ground that it is improperly procured, or that the arbitrator has misconducted himself. Except on this narrow grounds the validity of an award cannot be questioned. An award may be enforced in the same manner as a judgement of the court.


It is curious that notwithstanding the amount of complaints received from the business community about delays in the administration of justice, which has resulted in the government embarking on judicial reform within ..................financial sector reform package, little resort is made to arbitration as an alternative made of dispute resolution. Despite the availability of a suitable body of law in the area of arbitration. Apart from two cases where references under the rules of court of a particular issue which was though to be better resolved by arbitration during the pendency of the court action.

The local Chamber of Commerce has not been involved in arbitration under either of the two kind having more or less intervened in commercial disputes by way of conciliation. Having regard to compliants ...........against the courts it is clear that there is a need to increase awareness in the business community about the need for making more recourse to the arbitration proceedings and even initiate the possibility of reviewing the laws. The 1950 Act is regularly applied to Partnership Agreements although actual proceedings in this connection appearto be rare.


ARBITRATION UNDER THE RULES OF COURT

Arbitration under this regime is in the nature of an adhoc reference of an existing dispute. Such a reference is at the discretion of the court and application should be made before final judgement in case the parties are free to nominate arbitrators but the court may, if they fail to do so, are unsuccessful or desire that it should. The reference is by the court under seal and fixs the time for the delivery of the award. If the reference is to more than one Arbitrator, the court order should make provision for a difference of opinion.

The arbitrators have the same powers as under the 1950 Act except as to be expected, with regard to the supervision of the court which appears to be stricter. The court may, it would appear recall the suit and supercede the arbitration proceedings. The rules also direct that the award should contain a conclusive finding on each matter referred. The court has power to make corrections or to modify an award where the arbitrators exceed the scope of the reference by dealing with matters not referred, provided that the award is severable.

The award may also be remitted for consideration if any matters are left undetermined or if matters not referred are considered, or if the award cannot be executed for uncertainty or error of law on the face of the award. No award shall be liable to be set aside however, except for perverseness or misconduct of the arbitrator or umpire. An application has to be made within fifteen days of the award otherwise the award, on filing, shall have the same force and effect as an order of the court.

A few cases appear to have been referred to arbitration by the court. (1) of these cases, the issues involved were mostly financial and arbitrators appointed with an accounting background.
No challenges to the ...........made awards have been discovered. Under both regimes the courts proceed in the light of decided cases at common law.

INTERNATIONAL ARBITRATION

The Gambia is party to the Convention on the settlement of investment disputes between states and nationals of other states ICSID.(2) b. Statutory provision has been made however to incorporate the provisions of this statute into domestic law.
Nonetheless in most agreements of an international character, at least where one of the parties is a foreign national or is substantially owned by a foreign national, provision is made for recourse to arbitration in the case of any dispute. Because of the same size of the economy such agreements usually involve Government or Government enterprise or other body and a multinational. These became fairly common between 1986 - 1993 when Government became involved in a privatization of non performing public corporations either through an outright sale or through management leasing arrangements. Another area where International Arbitration clauses are in use lender agreements for civil engineering works which until 1992 made provision for arbitration by the International Chamber of Commerce through the adoption of the FIDIC contract clauses for civil engineering works. Experience of ........International arbitration is limited to one case proceeding which has made the Government wary of arbitration by established international tribunals. As a result since 1992, arrangements involving Government provide for adhoc arbitration under the UNCITRAL Rules.

Disputes to be referred for international arbitration by the insertion of an arbitration clause in an agreement, will be enforced by the courts under the 1950 Arbitration Act. In the case of The Gambia Government against Luis Diaz where both parties were Gambian nationals the court recognised the agreement to arbitrate outside its jurisdiction. It therefore stayed the court action under section 5 of the 1950 Act. Thus for the purpose of enforcing an arbitration agreement whether for domestic or international arbitration the 1950 Act is applicable.

Where Gambia is also chosen as the forum for international arbitration, Gambian law would be the curial law and unless another procedural law is chosen, the 1950 Act would apply and the provisions in the Schedule to that Act with regard to procedure would also apply. In this regard the supervisory jurisdiction of the court over the proceedings would be exercised in accordance with that Act. It is therefore to be noted that since hunder the Gambia Act the courts have wide powers of setting aside an award for misconduct, perverseness and error on the face of the record, The Gambia may not be an attractive forum for international arbitration; especially having regard to more modern arrangements in other jurisdictions which limit the supervisory authority of the court over the proceedings and the award.

CHALLENGING THE AWARD

The attitude of the Gambian courts as regards enforcement could best be discussed in the context of the arbitration between Luis Diaz and the Government by the International Chamber of Commerce. It is necessary to set out the full facts of this case: The Republic of The Gambia entered into a contract with LDLC (a locally registered company) for the construction of a highway from Banjul to Serekunda. The contract adopted the FIDIC provisions on civil engineering works which contain the following, arbitration clause: 0"67.

Relations between the two parties deteriorated and LDLC gave notice of termination on 19th February 1988 purporting to determine the contract on 7th March 1988. The Government used the police to initially secure the LDLC compound and ensure that the plant and equipment which were alleged to belong to the contract were not removed from the site, Subsequently, on March 9th both LDLC and Government applied to the engineer to the contract to determine whether or not LDLC was entitled to determine the contract. On 10th March the Government successfully sought an injunction restraining LDLC from removing the plant. LDLC in response sought also an injunction restraining the Government from interfering with the same plant and at the same time applied for a stay of the proceedings under section 5 of the Arbitration Act, 1950 on the grounds that the dispute was subject to arbitration.

On 28th March, 1988 the court stayed both set of proceedings by consent, the injunction granted was however not vacated and was subsequent appellate action continued inter partes. A stay of the injunction was refused in June, 1988 and a subsequent appeal to the Gambia Court of Appeal was dismissed in May, 1989.

Without waiting for the decision of engineer, LDLC on 18th April, 1988 applied to the ICC for arbitration. On 11th May, 1988 the Government objected to this reference on the grounds that it was premature. On 4th June the engineer gave a decision in favour of the Government. As LDLC had refused to accept delivery by hand, the letter containing the decision was posted to them, on 6th June, 1988. On 13th June LDLC wrote to ICC, through it's lawyer, on the Governments claim that the reference was premature and asserted that as the engineer had failed to give a decision within the 90 day period provided in the arbitration clause, arbitration proceedings were now permissible.

The Arbitration proceedings commenced on 16th December and it was decided that the issue of jurisdiction would be determined as a preliminary issue. It was agreed inter alia that the place of arbitration would be London, ICC rules of procedure would apply, and that the substantive law was Gambian Law which was assumed to be the same as the common law unless notified to the contrary.


INTERNATIONAL

In an interim award of 26th June, 1989 the arbitrators ruled that they had jurisdiction. That the assertions of LDLC through their lawyer made after the 90 day period (during which he failed to make a decision) together with the earlier letter of 18th April, 1988 constituted a valid request for arbitration. The government objected to the decision on jurisdiction and continued to object during the subsequent proceedings Final Award.The Final Award was made on 31st January, 1991. The arbitrators found against the government on the main issue and held that LDLC had the right to terminate the contract. They also found against the government on most other issues which included a claim in tort for damages arising out of the seizure by the police of its plant and equipment and a claim in effect for the depreciation of the plant which in effect was impounded by the court. The objection which was taken by the Government on these claims on the basis that the arbitrators had no jurisdiction to consider such claims since they had not been referred to the engineer for decision neither were they within the scope of the arbitration agreement was dismissed.

Once the award was published, the government decided to attack it in the Gambian courts since the curial law i.e. English Law was found to be unfavourable as regards challenges to ICC arbitration. The attack against the award was made on several fronts the main of which centered total lack of jurisdiction on or alternatively, partially lock of jurisdiction on issues relating to the claims in tort and the impounding of the equipment as well as perverseness on the part of the arbitrators. The attack was made pursuant to the 1950 Act, the rules of court and the common law.

LDLC took preliminary objection to the court's jurisdiction to review or set aside the award on the grounds that it was an award made in a foreign jurisdiction-London and by article 22 of the ICC rules the arbitration shall be deemed to be made at the place of arbitration and on the date when it was signed. That the curial being English Law, only the English Courts could entertain such an application. In response the Attorney General argued that the jurisdiction of the English courts to set aside an international arbitration award was founded on statute and not the common law, and in the absence of similar statute in the Gambia, the jurisdiction of the Gambian courts could not be ousted. Secondly that the parties involved being Gambian Nationals the arbitration should not be regarded by the courts as international merely because a foreign forum was chosen as the venue. Thirdly, that since the court was initially seized of the matter but had stayed the action, it still had jurisdiction to review the decision of the tribunal.

In upholding the preliminary objection, the Chief Justice in a well considered judgement held that the forum and seat of arbitration apart from statutory definition, was what would determine whether an award was an international award or a domestic one, that by submitting the dispute to the arbitral mechanism of the international Chamber of Commerce and by choosing a forum outside The Gambia, the parties have put the resolution of the dispute outside the ambit of the jurisdiction of the Arbitration Act 1950 and outside the jurisdiction conferred on Gambian courts in certain regard by that Act. The Gambian courts could only impeach a foreign award when it is called upon to enforce it and not otherwise.


THE REGISTRATION OF THE AWARD

Since the common law is part of Gambian Law a foreign arbitral award may be enforced at common law by action on the award or alternatively under the Reciprocal Enforcement of Judgements Act, 1922 or the Foreign Judgements Reciprocal Enforcement Act, 1936. The former Act has its origin in the Administration of Justice Act, 1920 of the United Kingdom part II which was extended to registration of Judgements obtained in the Gambia. The Act provides for facilitating the Reciprocal Enforcement of judgements and awards made in the Gambia, in other parts of the Commonwealth. Judgement is defined as a judgement or order given by a court in any Civil proceedings and includes an award in proceedings under an arbitration as "if the award has, in the place where it was made, become enforceable in the same manner as a judgement given by a court in that place". Section 3 of the Act further provides that a judgement obtained in the High Court in England, Northern Ireland or Scotland is registrable within a period of 12 months after the date of judgement or such longer period as may be allowed by the court, if the court in all the circumstances of the case thinks it just and convenient that the judgement shall be enforced in the Gambia.

The LDLC award was sought to be registered under this Act. The Government took the objection that the award not having become enforceable in the courts in England in the same manner as a it was not a judgement within the ............of the Act and could not therefore be registered under it. However the award was registered before the court could consider this issue and registration in England was not opposed. The objection was abandoned.

The Government however did not give up. It then contested the registration of the award on the main ground that the Arbitration
Tribunal lacked jurisdiction or alternatively had exceeded the scope of its jurisdiction. Section 3(2) provides counsel for the applicant in moving his application argued that the ICC had jurisdiction which could not be impeached. The respondent had agreed to arbitration, participated in the proceedings voluntarily and was therefore stopped from or is deemed to have waived its right to question the jurisdiction of the Tribunal.

The respondent again argued that the jurisdiction of the arbitrators could be challenged where they rule on their own jurisdiction as they cannot be regarded to have final say on their own jurisdiction and where the curial law or the law where the award is sought to be enforced so permits. It was further argued that the defendants participated in the proceedings under protest, as such could not be contemplated. Therefore the court could still consider whether the tribunal had jurisdiction either wholly or partially. It was waiver or stopped from the arbitration clause 67 that there was a requirement that the dispute should first be referred to the engineer who had 90 days within which to make a decision. It is only when the engineer had made a decision to the dissatisfaction of a party or has failed to make such decision that the aggrieved party may refer the matter to arbitration. Both parties had referred the matter to the engineer on 9th March, 1988 and the applicant had referred the matter to arbitration on the 18th April well within the 90 day period. The tribunal therefore had no jurisdiction and subsequent observations by its Lawyer could not be regarded as the .........reference. It was argued further that even assuming that the arbitrators had initial jurisdiction it exceeded the scope of that jurisdiction by considering claims which had not been referred to the engineer's decision and since the award was severable that part of the award which was made in excess of jurisdiction could be severed. It was further argued that the case of Ashvill Investment vs Elmer Ltd was wrongly applied since the arbitration clause in that case was not conditional upon the prior decision of a third party apart from the arbitrators. The tribunal had no jurisdiction to consider the claims in tort since these had not been referred to the prior decision of the engineer and secondly since the right to bring claims in tort against the government is founded on statute a foreign tribunal could not have jurisdiction. While the arbitration clause was very wide it could not have been the intention of the parties that tortious claims should be referred to the jurisdiction of the engineer.

Held per Omosun CJ - (1) Jurisdiction issue that the respondents having fought the case on it's merits are deemed to have voluntarily submitted to the jurisdiction of the tribunal and cannot now be heard to be protesting against its jurisdiction. In arriving at the conclusion the judge cited various authorities most which dwelled on the jurisdiction of a foreign court to enforce the judgement of a foreign court. His words in this regard are pertinent - "It is clear to me that the defendants appointed one of the arbitrators, chose the place of arbitration, signed the agreed terms of reference, filed pleadings, appeared before the ICC for the said arbitration and called witnesses on its behalf. It is plain to me that the defendant fought the issue on the merits. When the tribunal ruled that it had jurisdiction, the defendant id not walk out but continued to play an active role and participate fully at subsequent hearing. It seems to me too late in the day to challenge the jurisdiction of the ICC to which it voluntarily submitted. How else can one explain the participation after the interim award?. "(2) The partial jurisdiction issue the court followed the Ashville case, that the arbitration clause was wide enough to cover all disputes arising from the contract and the parties had by it agreed to submit all disputes to the decision of the arbitrators.


Unlike the decision of Ayola C.J. it is doubtful whether this decision is correct. There is authority even in the cases relied upon that a party who takes part in arbitration proceedings may not always be precluded from challenging the award subsequently. The principles applicable have been clearly explained by Devlin) in Westminster Chemicals Produce Ltd v Elchholz & Loeser at P105 in those circumstances....

In Henry V Geoprsco International (C.A) Roskill J reviewing the English cases on submission to the jurisdiction of foreign court at page 747 said "Certainly there is authority that an appearance solely to protest against the jurisdiction is not a submission to his jurisdiction...

On the issue of partial jurisdiction the court did not seem to address the issue of whether the arbitrators could address and issue which had not been referred to the decision of the Engineer.