Supreme Court Upholds GHS 124 Million Arbitration Award Against Springfield

Ghana’s Supreme Court has dismissed a final appeal by Springfield Exploration and Production Limited. This decision clears the way for enforcing nearly $10 million in London Court of International Arbitration (LCIA) awards. The awards are against Springfield in a dispute with Stena Unicon Offshore Services Ghana Limited.

This ruling reinforces Ghana’s approach to arbitration. It clarifies how foreign arbitral awards are enforced under the Alternative Dispute Resolution Act, 2010 (Act 798). The dispute began in 2019. Stena Unicon deployed the drillship Stena Forth for Springfield’s Afina-1 exploration well offshore Ghana. Springfield allegedly failed to pay 15 invoices for over $8 million after successful drilling.

Springfield resisted the claim. The company argued it was exempt from certain taxes. It also said the COVID-19 pandemic affected its fundraising, delaying payments. The contract between the parties was governed by English law. It also provided for arbitration under the LCIA Rules, with London as the arbitration seat.

The tribunal issued awards for the debt and legal costs in late 2021. Stena then moved to enforce these awards in Ghana. Springfield challenged enforcement, claiming its right to a fair hearing was breached. Springfield’s main argument was that the tribunal used the 2020 LCIA Rules. These rules included an “early determination” procedure. Springfield contended that the 2014 LCIA Rules should have applied, as they were in force when the contract was signed.

Springfield argued that using the newer rules significantly changed the process. It claimed this weakened its defense and violated its legitimate expectations. The company stated it did not receive enough time to prepare its defense or gather evidence. However, the Supreme Court rejected this argument. The court held that, unless parties expressly agree to an earlier rule version, the rules in force at arbitration commencement usually apply.

The court found no record of the parties agreeing that only the 2014 LCIA Rules would govern future disputes. It noted that if parties intended to use rules from the contract’s signing date, they should have stated it clearly. The Supreme Court referred to cases like China Agribusiness Development Corp. v. Balli Trading. This case treated references to an arbitration institution and its rules as references to the applicable rules at the arbitration time.

The court also cited arbitration texts like Sundra Rajoo’s Law, Practice and Procedure of Arbitration. It also referenced Russell on Arbitration. These affirmed that amended institutional rules can apply unless explicitly excluded. The Supreme Court determined that the 2014 LCIA Rules already allowed tribunals wide discretion for quick proceedings. Thus, the early determination under the 2020 Rules was not a radical change but a clarification.

The justices also dismissed Springfield’s claim of being denied justice. They noted Springfield participated in the London proceedings, attended video conferences, and had legal representation. The court concluded, “The Respondents were afforded more than ample opportunity and time to defend.” This ruling from Ghana’s highest court strengthens the reliability of international commercial arbitration. It signals to foreign investors that Ghana respects and enforces international financial obligations. This could boost Ghana's attractiveness for global business ventures and dispute resolution.