Woes Of Egyptian Company Euroget Deepen As It Lands In Court

Egyptian company executing a number of health facility projects in the country – Euroget De Invest – has filed an application to stay proceedings in a matter brought against it by Hanisa Forefront, a construction firm and its subsidiary company for illegally terminating a contract between them.

According to lawyers for Euroget, the decision by the plaintiff to go to court constitutes a disregard for the terms of their contract and an abuse of the court process, hence, must not be countenanced by the court.

Euroget, which is the main contractor for the 500-bed military hospital at Afari in Kumasi, the Ashanti Regional capital – acting through its chairman, Dr. Said Deraz – contracted a $3.95 million access roads and drains project at the hospital site with Hanisa Forefront.

But the contract was terminated on February, 8, 2018 by the chairman of Euroget, Dr. Said Deraz, because Hanisa Forefront could not pay the purported “secret commission” it was coerced to pay Dr. Deraz.

Not satisfied with the decision, Hanisa Forefront took Euroget and the chairman, six other companies as well as chief executives of those companies – which according to the plaintiff company, played various roles leading to the termination of the contract – to court.

The plaintiff company is seeking a declaration that Euroget and its chairman, Nakia Company Ltd, Samnort Industries Ltd and Sampson Nortey, are liable to account to it the sum of $1.393,081.39.

It is also praying the court to order Euroget to reinstate the performance of the rest of the contract purportedly terminated or be made to pay Hanisa Forefront “all monies from the performance of the rest of the contract, as if same had been duly completed,” among others.

Even before the merit of the matter was heard, lawyer for the Egyptian company, Yaw Eshun, had filed an application praying the court to stay its proceeding to allow the parties resort to arbitration to settle their dispute.

According to the lawyer, the matter in dispute is whether or not the termination of the contract was properly done and within the authority given to the project manager under the contract.

He said the matter is within the scope of agreement between the parties to refer all disputes to an adjudicator for resolution and in the event that the adjudicator is unable to resolve the issues, then the matter will be resolved through arbitration.

He therefore prayed the court to stay its proceedings to allow the parties to exhaust the dispute resolution avenues stipulated in the contract between them.

Hanisa Forefront's Opposition

Ken Anku, Lawyer for Hanisa Forefront, however opposed the application to stay proceedings, saying the defendant companies were presenting the issue as though the only relief sought by the plaintiff company was the reinstatement of the contract.

He said there is no arbitration clause in the said contract that provides for settling of the demand of “secret commission” and receipt of it. In consequence, the contract did not contemplate it.

He averred that the Arbitration Act 38, which the defendant companies tend to rely on, is “dead” and that the use of a private adjudicator is not known to the current Alternative Dispute Resolution (ADR) Act.

It is the case of the lawyer that the purported agreement between the parties to refer all disputes to an adjudicator for resolution is ambiguous and requires interpretation by the court as it made adjudication a precursor to the arbitration clause.

“To the extent that the instant application is referable to the validity of arbitration clause itself, the court must decide whether the matter should be referred to a private adjudicator, which is totally non-existent in Ghana,” Lawyer Anku posited.

The court has set June 6, 2018 to rule on the application to stay its proceedings.

Gibril Abdul Razak

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