IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT
ACCRA - A.D 2019
A.J. FANJ CONSTRUCTION & INDUSTRIAL& ENGINEERING LTD - (Plaintiff/Respondent)
GHACEM LIMITED - (Defendant/Appellant)
DATE: 16TH APRIL, 2019
SUIT NO: CM/BDC/0343/2019
JUDGES: ERIC K. BAFFOUR ESQ. J
It is provided under Order 11 rule 18(1)(d) of the High Court (Civil Procedure) Rules, 2004, C. I. 47 that:
“The Court may at any stage of the proceedings order any pleadings or anything in any pleadings to be struck out on the grounds that:
(d) it is otherwise an abuse of the process of the Court”
And may order the action to be stayed or dismissed or judgment to be entered accordingly”.
Defendant/Applicant has mounted this application calling for the dismissal of the suit upon the ground that the suit instituted by Respondent constitutes a veritable abuse of the judicial process in so far as according to Applicant this suit has effectively been determined and therefore was res judicata.
The factual grounds giving rise to this application as deposed to in the affidavit by one Morten Gade, the Managing Director of Applicant company is that Respondent commenced arbitral proceedings against West Africa Quarries Ltd (WAQL) pursuant to an agreement that specified resolution of dispute between Respondent and WAQL in arbitration. Respondent in the course of the arbitral proceedings sought for an order to join the Applicant herein, who was not a party to the arbitration agreement, otherwise referred to as the Yongwa Contract to the arbitration proceedings. The issue before the arbitrator upon the application for joinder therefore was whether the Applicant herein who was not a party to the arbitration agreement was compellable to participate in the arbitration proceedings.
That the arbitrator declined the application whereupon the Respondent applied to the High Court, Commercial Division for joinder of Applicant to the arbitration proceedings. In a Ruling delivered by my respected brother, Asiedu J. he granted the application for the Applicant to be joined to the arbitration proceedings. Piqued by the decision of Asiedu J. the applicant invoked the supervisory jurisdiction of the Supreme Court for the purpose of quashing the decision granting the order for joinder.
On the 30th of May, 2018, the Supreme Court quashed the decision of the High Court noting that the Arbitral Tribunal rightly came to the conclusion that it had no power to join the Applicant to the arbitral proceedings. It had further been claimed that Respondent also filed a motion for interlocutory injunction which said application was dismissed. On that basis the issuance of this writ had been attacked by Applicant that the Respondent is seeking reliefs not dissimilar from the ones he sought before the Arbitral Tribunal and the facts recited in the statement of claim are mere re-cogitation of what Respondent had earlier done in the applications before the Tribunal, the High Court and the Supreme Court. That the only palpable change is the omission of the name of WAQL to the suit. To Applicant the Ruling of the Arbitral Tribunal which was affirmed by the Supreme Court endorsed the position that Applicant is not a party to any Yongwa contract and Respondent bringing a fresh action is caught by the res judicata principle. And Respondent should not be allowed to re-litigate the suit it had discontinued against WAQL.
Not surprisingly, The Respondent has vehemently opposed this application as a misconception of the principles of res judicata and abuse of judicial process. Respondent notes that if any issue has been laid to rest between the parties herein it is one in respect of the joinder of Applicant to the arbitral proceedings but nothing else. And that the Supreme Court quashed the ruling of the High Court that Applicant cannot be compelled to partake in the arbitration proceedings with Applicant not party to the Yongwa contract. And that does not mean that it was precluded from instituting an action against the Applicant to seek reliefs it believes it was entitled to as it has done in this instance by commencing the action against Applicant.
First there appears to be a procedural irregularity which I cannot gloss over. Applicant is seeking a dismissal of the suit on the grounds of res judicata. The received learning on res judicata is that it cannot form the basis of an application for dismissal of a suit but must be pleaded in a pleadings of a Defendant and particularized for which evidence must be led by the proponent with the necessary proceedings tendered. This course which Applicant took is not by law opened to the Applicant. See Peter Barnette in his work ‘Res Judicata, Estoppel and Foreign Judgments’ – Oxford Press.
Notwithstanding this glaring slip by Applicant, I am prepared to overlook same and determine if indeed the present action is caught by res judicata. Applicant did not indicate which res judicata he alluded to as to whether it is cause of action estoppel or issue estoppel. For Azu Crabbe CJ states the two types of estoppel res judicata in the case of POKU v FRIMPONG  1 GLR 230 that:
“an estoppel deriving from a judgment is of two kinds, namely, cause of action estoppels and issue estoppels. Where a plea of estoppels per rem judicatam is pleaded it is necessary for a trial Judge, in order to avoid confusion to decide first the nature of the estoppel raised”
Again, mark the choice of words here that ‘when a plea of estoppel rem judicatam is pleaded...’. This application is not pleading. Cause of action estoppel has been said to be that type of estoppel which prevents a party to an action from asserting or denying as against the other party the existence of a particular cause of action already determined by a court of competent jurisdiction in a previous litigation between the same parties. See the judgment of Amissah JA in the case of FOLI & ANOR v ATTA  1 GLR 194-203.
Issue estoppel on the other hand is based on the fact that in a cause of action, there may be several issues in that cause and once an issue had previously been raised and determined by a court of competent jurisdiction, the courts will not allow an issue that has been raised and determined to be raised again on the basis of rei interest republicae ut sit finis litium (it is in the interest of the State that litigation must come to an end).
Diplock LJ better describes this estoppel in MILLS v COOPER (1967) 2 QB 459@ 463 that:
“The party in civil proceedings is not entitled to make, as against the other party, an assertion whether of fact or of the legal consequences of fact, the correctness of which is an essential element in his cause of action or his defence. If the same assertion was an essential element in his previous cause of action or defence, in previous civil proceedings between the same parties or their predecessors in title and was found by a court of competent jurisdiction in such previous civil proceedings to be incorrect unless further material which is relevant to the correctness or incorrectness of the assertion by the party in previous proceedings have since become available to him”.
Where a cause of action has been determined by a competent adjudicating body or an issue in a cause has been raised and laid to rest, a court will not subsequently allow the same matters to be raised for determination. This is simply res judicatam. For the principle to be sustained, Akoto-Bamfo JSC in her valedictory judgment on the 14th of February, 2019 in the case of KWADWO DANKWA & OTHERS v ANGLOGOLD ASHANTI Suit No J4/22/2018 noted at page 5 of the judgment that:
1. There must be an earlier decision on the issue;
2. A final judgment on the merits; and
3. The involvement of the same parties or parties in privity with the original parties.
See also the cases of SPEEDLINE STEVEDORING CO LTD; REP V HIGH COURT, ACCRA; EX-PARTE BRENYA (2001-2002) SCGLR 775; REPUBLIC v ADAMA-THOMPSON; EX-PARTE AHINAKWA (2013-2014) SC GLR 1395.
Indeed being the last judgment of Her Ladyship she went to town on res judicata and further noted when she quoted pages 52-53 of Spencer Bower and Turner’s Book Res Judicata as follows:
“where an action has been dismissed on the sole ground that the particular court had no jurisdiction, there is no decision of the question in controversy, such as to estop the plaintiff from suing again in any court which has jurisdiction to entertain the suit; but such a dismissal, while it will allow the disappointed party to prosecute his claim in a court having jurisdiction, will preclude him from reviving his claim before the tribunal which has formerly refused jurisdiction."
Indeed a ruling by an arbitrator that he has no jurisdiction cannot be the basis for a defence of res judicatam when one party subsequently commences proceedings before a court with competent jurisdiction. What was the basis for the claim that the reliefs being sought by Respondent in court has previously been determined by the Supreme Court?
Respondent dragged WAQL to the Ghana Arbitration Centre based on the Yongwa contract claiming loss of earnings of US$1,200,000, loss due to idle man power, loss due to idle machinery together with others flowing from the Yongwa contract and more particularly Appendix J of the Yongwa Contract that called for arbitration in the event of dispute. In the course of the arbitral proceedings Respondent applied for the Applicant to be joined to the arbitration. The arbitrator in his ruling noted that a:
“non signatory to the agreement cannot exercise the coercive power to compel a third party or person to participate in arbitral proceedings without the consent of the person”.
In other words, the arbitrator declined jurisdiction over the Applicant so far as the Applicant herein was not a party to the arbitration agreement. And indeed learned counsel for Respondent is spot on when he submitted that an arbitration clause in the Yongwa contract itself is separable from the entire Yongwa contract. This has now become a trite principle of law on arbitration since Viscount Simon laid down this rule in the case of HEYMAN v DARWIN LTD  A.C 356 @373 that:
“I venture to think that not enough attention has been directed to the true nature and function of an arbitration clause in a contract. It is quite distinct from the other clauses … the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement of both parties that any dispute arises with regard to the obligations which the one party has undertaken to the other, such dispute shall be settled by a tribunal of their own constitution… the arbitration clause can be specifically enforced by the machinery of the Arbitration Act”.
Can one therefore say that the issues being sought in this suit or the cause of action of Respondent has been determined?
It is the ruling of the sole Arbitrator that precipitated the originating motion on notice under section 40 of the Arbitration Act, 2010, Act 798 to determine whether Applicant can be compelled to participate in the arbitral proceedings. The decision of Asiedu J. that substantial justice would be done by joining Applicant to the arbitration ignited the certiorari application before the Supreme Court.
Per Ex ‘MG6’, the grounds for the invocation of the supervisory jurisdiction of the Supreme Court was stated as follows:
i. That the High Court (Commercial Division) Accra, exceeded its jurisdiction when it made an order for the joinder of the Applicant to ongoing arbitration proceedings when the motion before the court was for a determination of a preliminary point of law pursuant to section 40 of ADR Act Act 798
ii. That the decision of the High Court (Commercial Division) Accra to join the Applicant to arbitration proceedings arising out of an Arbitration Agreement to which the Applicant is not a party and/signatory, amounts to a patent error of law on the face of the record.
Accordingly the relief sought was for certiorari directed against the decision of the High Court, to be quashed. Ex ‘MG7’ at page 14, Dotse JSC acquitted himself well when he stated as follows:
“… it is our respectful view that the determination of the subsequent issue of joinder of non-signatory party to an agreement is definitely outside the scope, remit and therefore jurisdiction of the High Court. To proceed therefore to deal with the resolution of that issue despite the clear terms of that decision referred to supra, meant that the High Court acted in excess of its jurisdiction”.
Where in this Ex MG7 does the decision of the Supreme Court operate as res judicata precluding the Respondent from coming to court against Applicant as he appears to depose in paragraph 41 of the affidavit in support of the application? Where in the arbitral forum did the arbitrator decide the reliefs that Applicant has painstakingly stated in paragraph 43 of the affidavit in support of the application?
Even more startling is a party who, resisted quite rightly, that he cannot be compelled to arbitrate a claim he has not contracted to arbitrate and succeeded in that, to turn round when he is sued to claim that the matter is res judicata. That is a glaring attempt to retreat from confronting an opponent with a spurious claim of the reliefs being sought as caught by res judicata. To claim any semblance of res judicata here is to completely misconceive the whole principle of res judicata. The reliefs sought have not been determined by anybody. The parties have not met to determine the claims and no court of law has pronounced on the claims being sought. The Arbitrator, the High Court and the Supreme Court all dealt with the attempt by Respondent to join Applicant to the arbitration proceedings. That failed. And the Applicant will be halted in his track from using the refusal of the Arbitrator and the Supreme Court to join him to the arbitration proceedings to escape answering to the substantive claims made by the Respondent in court through the Trojan horse of res judicata.
It appears to me reading the written submission of learned counsel for the Applicant that the Applicant posit that not being a party to Yongwa contract should not be dragged to court. If that is his claim, the substance of what should be a defence of a party in a pleading cannot be elevated as a proven claim and an iron clad defence to resist answering to the matters stated by Respondent in his pleadings.
I cannot rest this ruling without touching on the claim by Applicant that the present suit is an abuse of the judicial process for which reason he founded the application under Order 11 Rule 18(d). Black’s Law Dictionary, 8th edition defines ‘abuse of process’ as follows:
“There is said to be an abuse of process when an adversary through the malicious and unfounded use of some regular legal proceeding obtains some advantage over his opponent”.
Dotse JSC relying on this principle of abuse of process noted in the case of NAOS HOLDING v COMMERCIAL BANK GHANA LTD  1 SCGLR 492 that:
“the principle of abuse of process clearly then underscores the essence of preventing those who want to make the litigation arena i.e. the law courts a career from embarking upon such a process as it is contrary to public policy and leads to loss of valuable time and resources”.
This as Sagu Osei, Esq rightly pointed out in his written submission that it is the essence of the HENDERSON v HENDERSON  Hare 114 rule as laid down by Wigram J to the effect that:
“where a given matter becomes the subject matter of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires a party to the litigation to bring forward the whole case and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matters which might have been brought forward as part of the subject in contest but which was not brought forward only because they have from negligence, inadvertence or even accident omitted part of their case”.
Prof Date-Bah in the case of SASU v AMUA-SEKYI [2003-2004] SCGLR 742, gave meaning to the Henderson principle as follows:
“The rule is not based on the doctrine of res judicata in a narrow sense, or even on any strict doctrine of issue or cause of action estoppels. It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on forever and that a defendant should not be oppressed by successive suits when one would do”
Regrettably, the import of the Henderson Rule has completely been misapplied by learned counsel for Applicant. Which suit did Respondent previously bring that the claims it is making now could have been brought for determination? Respondent had sought to meet Applicant at the Ghana Arbitration Centre for which that request had been declined and on what basis can it be argued that Respondent should have brought the claims he is making now to the Arbitrator for adjudication? Where is the evidence of the abuse of the judicial process?
The fact of having sought joinder of Applicant to an arbitral proceedings and same failing cannot be said to be an abuse of the judicial process simply because the Respondent has filed a writ to seek the reliefs he wanted from Applicant at arbitration. If the joinder application had succeeded and Applicant had participated in the arbitration proceedings to finality and Respondent had come to court seeking the reliefs he now seeks, then Applicant would be right to claim res judicata and abuse of process but not when he resisted to have the matter heard on its merit at arbitration and now a claim is being made for him to contend that the matter constitute an abuse of the process. The allegation that the suit constitutes an abuse of the judicial process is wholly unfounded.
Finding no res judicata with the institution of this action and there being no abuse of the judicial process, I entertain no hesitation whatsoever in dismissing this application as frivolous and without any iota of merit. In the exercise of the discretion of the court, I will cost of Gh¢2,000.00.