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CPConstruction Pioneers Baugesellschaft Anstalt v. Government of the Republic of Ghana

September 23, 2008

IN THE MATTER OF THE ARBITRATION BETWEEN, CPCONSTRUCTION PIONEERS BAUGESELLSCHAFT ANSTALT (LIECHTENSTEIN), PETITIONER,
v.
THE GOVERNMENT OF THE REPUBLIC OF GHANA, MINISTRY OF ROADS AND TRANSPORT, RESPONDENT.



The opinion of the court was delivered by: Louis F. Oberdorfer United States District Judge

AMENDED MEMORANDUM AND OPINION

CPConstruction Pioneers Baugesellschaft Anstalt (CPConstruction) petitions to confirm two foreign arbitration awards (the Awards) against the Government of the Republic of Ghana, Ministry of Roads and Transport (Ghana Ministry) rendered in Ghana by a tribunal of the International Chamber of Commerce.*fn1 The Ghana Ministry's applications to set aside the Awards are still pending before the Ghana High Court, and adjournment under Article VI of the New York Convention is proper. Therefore, an accompanying order stays Petition pending final resolution of the applications to set aside the Awards.

I. BACKGROUND

On December 5, 1996, the parties entered into an agreement (the Contract) in which CPConstruction agreed to construct and rehabilitate a portion of the Biriwa-Takoradi Road in the Republic of Ghana (the Project). Article 67.3 of the Contract provides that the parties shall submit all disputes between them arising from the Contract or the Project to arbitration before the International Chamber of Commerce. The Contract establishes the law of Ghana as the governing law and Accra, Ghana as the venue for any arbitration proceedings. In 2000, a new Ghanaian government took power and began an investigation into alleged fraud surrounding the prior Ghanaian government's dealings with CPConstruction. In mid-2001, the Ghana Ministry suspended payments to CPConstruction, citing the alleged fraud.*fn2

A. Arbitration and Related Proceedings in Ghana

In March of 2002, CPConstruction initiated arbitration proceedings with the International Chamber of Commerce Arbitral Tribunal (the Tribunal) seeking payment for the Project. In its answer, the Ghana Ministry objected to the jurisdiction of the Tribunal, citing Section 27(2) of the Ghanaian Arbitration Act of 1961, which states in relevant part:

Where an agreement between any parties provides that differences which may arise in the future between them shall be referred to arbitration, and a difference which so arises involves the question whether any such party has been guilty of fraud, the Court shall, so far as may be necessary to enable that question to be determined by the Court, have power to order that the agreement shall cease to have effect and power to give leave to revoke the authority of any arbitrator or umpire appointed by, or by virtue of the agreement.

The parties filed briefs and argued the jurisdiction issue before the Tribunal.

On April 7, 2003, the Ghana Ministry submitted an application to the Ghana High Court to revoke the authority of the Tribunal. CPConstruction filed an affidavit in opposition to the application. On April 17, 2003, the parties appeared in a hearing before the High Court. That same day, the High Court ordered that the said agreement to resort to arbitration proceedings shall cease and have no effect. I hereby also grant leave to the applicant to revoke as it has been prayed for, the authority of the said arbitrator appointed under the agreement out of which I.C.C. Arbitration 12048/DB/EC (C12078/DB) emanated. CPConstruction's appeal of this order was adjourned sine die at its request due to settlement negotiations; no further action has occurred.

On May 8, 2003, the Ghana Ministry informed the Tribunal via letter of its position that there were no further proceedings pending before the Tribunal. Nevertheless, on December 22, 2003, the Tribunal issued a 57-page partial award (the First Award) holding that the Tribunal had jurisdiction to hear and determine CPConstruction's claims arising under the Contract and that the High Court order was manifestly arbitrary. One member of the Tribunal, Dr. S.K.B. Asante, dissented. On February 10, 2004, the Ghana Ministry submitted an application to the High Court to set aside the First Award. On March 26, 2004, the High Court, at the joint request of the parties, adjourned consideration of the application while the parties attempted settlement.

On August 3, 2004, the Tribunal issued a partial final award (the Second Award) of approximately 24 million Euros and 22 billion Ghanaian cedis in favor of CPConstruction. Dr. Asante again dissented. On September 1, 2004, the Ghana Ministry submitted an application to the High Court to set aside the Second Award, which CPConstruction opposed. On September 10, 2004, CPConstruction filed a petition in this court to confirm the Second Award. Dkt. No. 1.

On October 2, 2006, the Tribunal issued a final award (the Final Award) of approximately 1 million Euros and approximately 2 million dollars in favor of CPConstruction. Once again, Dr. Asante dissented. On November 21, 2006, the Ghana Ministry submitted a consolidated application to the High Court to set aside the First Award, the Second Award, and the Final Award. On March 6, 2007, with this court's leave, CPConstruction filed its Amended/Supplemental Petition for Confirmation of Second and Final ICC Arbitration Awards. Dkt. No. 36.

B. Procedural History

Pending before the court are (1) the Petition, (2) the Ghana Ministry's motion to dismiss on a variety of procedural and substantive grounds, (3) the Ghana Ministry's motion to quash service of process, and (4) the Ghana Ministry's request for a stay pending the outcome of the applications in Ghana to set aside the Awards. On October 30, 2007, the court heard arguments on these items. That same day, the court ordered the parties to exchange settlement offers. Dkt. No. 58. The court delayed its decision while the parties ...


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