Zogli v. Ganyo [1977]1 GLR 297

Material Facts:

The son of the appellant made certain defamatory statements against the plaintiff/respondent, hereafter the respondent. The appellant admitted to have given his son the information he used to defame the respondent and, together with one Okovi Ahorli, went to see the respondent to settle the issue. During the meeting, the appellant apologised to the respondent, and the respondent agreed to accept £G20 (¢40.00), a sheep, half a piece of white calico, and a bottle of rum as pacification from the appellant. A part payment of five pounds was made to the respondent. Both the respondent and the appellant also provided some gin to stamp their settlement.

However, the appellant later reported to the police that the respondent had extorted money from him. The respondent, believing the appellant had wronged him, instituted the present action.

Procedural History:

At the trial court, judgement was given in favour of the respondent, and he was awarded fifty guineas or ¢105.00 damages. On appeal to the Circuit Court, the appeal was dismissed, but the damages were varied. The Circuit Court made reference to the meeting between the respondent and the appellant and said the meeting was an arbitration proceeding, and the settlement arrived at therein was binding. The appellant appealed to the Court of Appeal.

Issue:

Whether or not the dispute between the respondent and plaintiff has already been settled by arbitration?

Arguments of the Appellant:

1. That there was no arbitration between the parties, and the Circuit Court could not therefore give effect to whatever was agreed during that meeting.
2. That the parties merely negotiated to settle their dispute.

Holding:

The dispute between the parties was settled by negotiation, which was binding because the parties agreed to make it binding.

Ratio Decidendi:

Their lordships noted that customary arbitration and negotiations for settlement have several features in common. The first requirement of customary arbitration is “a prior agreement by the parties voluntarily to submit their dispute to settlement on the merits by that method.” This requirement is equally the first requirement in negotiations for settlement. The second requirement of customary arbitration is that the award of an arbitrator must be published to the parties. This requirement must equally be present in cases settled by negotiations.

However, the main feature that distinguishes customary arbitration from negotiation for settlement is that:

For an arbitration to be valid, the parties must have agreed beforehand to be bound by the award made. The parties to a negotiation for a settlement do not have so to agree. It is this feature which leads to the consequential rule that once the award is made the parties to an arbitration cannot reject it. Indeed the authorities say that once the initial consent has been given and the arbitration is under way there is no right in the parties to resile from it: see Kwasi v. Larbi [1953] A.C. 164, P.C. and Yaw v. Amobie (1958) 3 W.A.L.R. 406, C.A.

As compared with this feature of an arbitration, it is well known that the result of a negotiation for settlement is not binding on the parties until it is accepted by both. But once it is accepted, it is as binding on them as an arbitration award. The West African Court of Appeal made this point clear in Ankrah v. Dabra (1956) 1 W.A.L.R. 89 at pp. 92-93, W.A.C.A.

…

The parties who agree to accept a negotiated settlement have an enforceable agreement subsisting between them which supersedes whatever rival claims they may have had against each other before the settlement. That is what is meant by the settlement being binding upon them on acceptance. Perhaps, the point is often lost on us because the rule is usually stated in the negative. The cases which draw the distinction between the two forms of customary dispute settlement say that the negotiation for a settlement is not binding on the parties until accepted. That must mean that once accepted it is binding on them. And in this regard it is enforceable and does create the same estoppel as the arbitration award

In the present case, even if the parties had a negotiated settlement, they appear to have agreed that the settlement is binding. This is evidenced by the provision of gin to stamp the settlement and the part payment made by the respondent.