AG Dame succeeds in blocking Cassius Mining’s $300m arbitration case against Ghana

In its Notice of Arbitration, Cassius Mining proposed that the secretary-general of the Permanent Court of Arbitration (PCA) serve as the appointing authority for this arbitration in accordance with Article 6.1 of the UNCITRAL Rules. However, Ghana raised several objections to the jurisdiction of the PCA in its response to the arbitration. The country argued that the arbitration was a legal nullity because the UNCITRAL Rules are not cognizable under the arbitration agreement between the parties.

Clause 21 of the Prospecting Licence Agreement granted to the claimant provided that the arbitration is to be in “accordance with the Alternative Dispute Resolution Act, 2010 (Act 798).” Section 5(1) of Ghana’s ADR Act is expressly “subject to the terms of the arbitration agreement,” and the UNCITRAL Rules clearly are neither a “person” nor an “institution for arbitration” contemplated by Section 5 of the ADR Act.

Ghana submitted that the arbitration is an abuse of the process as there is currently pending at the Ghana Arbitration Centre another arbitration filed by Cassius Mining Limited against the Government of Ghana. The respondent also requested that the PCA determine as a preliminary matter whether the PCA has any jurisdiction or role to play in the dispute between the parties.

The PCA, in its recent letter to the parties, stated that “the PCA secretary-general may act as appointing authority under the UNCITRAL Rules if all parties so agree. The PCA understands that no such agreement has been reached in this matter.” The PCA further decided that the applicable procedural regime, including the applicability of the UNCITRAL Rules, is a matter for the arbitral tribunal. However, there is no arbitral tribunal for the dispute constituted since the parties have not agreed.

This decision has significant implications for Cassius Mining Limited’s case against the Government of Ghana. Without the appointment of an arbitral tribunal, the case cannot proceed. The company claimed compensation in excess of US$300 million, and the legal dispute has already caused significant costs and time expenditures. The decision may force Cassius Mining Limited to reconsider its strategy in the case and explore other legal avenues to pursue its claims.

The case also raises broader questions about the role of international arbitration in resolving disputes between states and corporations. The UNCITRAL Rules are a widely recognized framework for international arbitration, but they are not always appropriate or applicable in every case. This dispute underscores the importance of carefully drafting arbitration agreements and considering the appropriate forum for resolving disputes.

Furthermore, the case highlights the challenges of balancing the rights and interests of corporations and governments in the context of natural resource extraction. This sector has historically been characterized by a power imbalance, with multinational corporations often exerting significant influence over governments and local communities. However, recent trends have seen a growing awareness of the need for more equitable and sustainable resource management practices that prioritize the rights and interests of local communities and ecosystems.

The decision by the Permanent Court of Arbitration to refuse to constitute an arbitration panel for the hearing of Cassius Mining Limited’s case against the Government of Ghana has far-reaching implications for the case and broader issues related to international arbitration and natural resource extraction. The dispute highlights the need for careful consideration of legal frameworks and the interests of all stakeholders in the natural resource sector. It remains to be seen how the parties will move forward and what