National Investment Bank v Eland: a cautionary tale

10 Jun 2022

The recent case of National Investment Bank Ltd v Eland International (Thailand) Co Ltd and another addresses a wide range of matters related to arbitration in a relatively brief judgment. Foxton J considered, among other things, the relationship between sections 18 and 72 of the English Arbitration Act 1996 (AA 1996), waiver, section 14 of the AA 1996 and issue estoppel.

National Investment Bank Ltd (NIB) succeeded in its application under section 72 of the AA 1996 for a declaration that an arbitrator appointed by the court under section 18 of the AA 1996 did not have jurisdiction in respect of claims already advanced in court proceedings in Ghana. This blog will focus on the successful waiver argument raised by NIB.

Section 72(1) (saving for rights of person who takes no part in proceedings) provides:

(1)  A person alleged to be a party to arbitral proceedings but who takes no part in the proceedings may question:
(a)  whether there is a valid arbitration agreement,
(b)  whether the tribunal is properly constituted, or
(c)  what matters have been submitted to arbitration in accordance with the arbitration agreement,
by proceedings in the court for a declaration or injunction or other appropriate relief.”


In 2001, NIB entered into a Collateral Management Agreement (2001 Agreement) with both the First Defendant (Eland Thailand) and the Second Defendant (Eland Ghana) (collectively “Eland”).

In 2004, NIB and Eland entered into a further agreement (2004 Agreement). Clause 6 of the 2004 Agreement provided:

“All parties agree to resolve any differences in a friendly manner by discussions failing which the matter may be referred to an Arbitrator under the Laws of the United Kingdom in London”(Arbitration Agreement).

On 22 April 2014, Eland Thailand commenced proceedings against NIB in the Accra Court in Ghana, advancing various claims under the 2001 Contract (Accra Proceedings).

In May 2014, NIB served a defence and counterclaim in the Accra Proceedings and in December 2014, NIB served a Third Party Notice on Eland Ghana seeking to make it a party to the counterclaim advanced in the Accra Proceedings.

In June 2015, Eland Ghana filed an unconditional Notice of Entry of Appearance in the Accra Proceedings.

NIB subsequently made an application for permission to amend its counterclaim and Third Party Claim so as to advance additional claims. Eland Ghana filed an affidavit in opposition to that application. The application was refused.

On 15 December 2015, Eland Ghana applied to stay the Accra Proceedings in favour of arbitration and an order was made to that effect on 19 February 2016.

Eland served a document which purported to be a Notice of Arbitration (NOA) on NIB on 23 May 2016.

On 28 April 2020, NIB served notice of its intention to prosecute the Accra Proceedings.

On 13 May 2020, Eland filed an Arbitration Claim form with the Commercial Court asking the court to appoint an arbitrator under section 18 of the AA 1996. The application and supporting documents were served on NIB but NIB did not engage with the application.

On 2 September 2020, Andrew Baker J made an order providing for the appointment of a sole arbitrator in the arbitration purportedly commenced by the NOA.

On 15 January 2021, NIB applied to the Accra Court asking it to exercise its inherent jurisdiction to set aside the Arbitration Order. That order was granted on 22 March 2021.

On 9 July 2021, NIB issued its application for an order under section 72 of the AA 1996 and Eland served their evidence in response on 1 October 2021.


NIB argued that Eland had waived its right to arbitrate the disputes raised in the Accra Proceedings.

Foxton J noted that it is trite law that a party will be held to have made an election if they act “in a manner consistent only with his having chosen one of the two alternative and inconsistent courses then open to him” (Paragraph 398, The Kanchenjunga).

Foxton J considered that the position of Eland Thailand was straightforward as the commencement of the Accra Proceedings by Eland Thailand was the clearest possible waiver of any right to have the disputes raised in the Accra Proceedings arbitrated.

Counsel for Eland Thailand argued that when Eland Ghana was joined to the proceedings and sought a stay, that somehow revived Eland Thailand’s right to refer the dispute to arbitration. Foxton J rejected that argument as he did not see why, having commenced proceedings and responded to the counterclaim, Eland Thailand was able to change approach merely because Eland Ghana had adopted a different position.

Foxton J accepted that the position of Eland Ghana was more difficult but was persuaded that, by virtue of the following matters, Eland Ghana had also waived the right to refer the disputes in the Accra Proceedings to arbitration:

Eland Ghana featured prominently in Eland Thailand’s statement of claim in the Accra Proceedings. NIB’s Defence and Counterclaim brought identical claims against Eland Thailand and Eland Ghana.

  • NIB’s Third Party Notice made it clear that it was seeking to pass on Eland Thailand’s claims to Eland Ghana and to join Eland Ghana to its counterclaim.
  • In response, Eland Ghana entered an unconditional appearance as opposed to a conditional appearance.
  • The affidavit served by Eland Ghana in opposition to NIB’s application to amend its counterclaim and Third Party claim stated, among other things, that Eland Ghana would defend the Third Party Notice by showing that it was NIB who was in breach of the 2001 Agreement and that the application should be dismissed because it would “delay the speedy trial of the suit”. Foxton J stated that the “clear impression given was that it was the Accra Court which would determine the dispute.”
  • Up until early December 2015, six months after the unconditional Notice of Appearance had been entered, there had been no suggestion by Eland Ghana that the claim should be arbitrated.

Foxton J was satisfied that the conduct of Eland Ghana was such that it acted so as to lead NIB to believe that it had completed its election and was not reserving the right to have claims involving Eland Thailand litigated in Ghana while identical claims involving Eland Ghana were arbitrated. Foxton J stressed that it was only the cumulative effect of all the above matters in the specific circumstances of the case that led to that conclusion.

Final thoughts

This case reiterates the need for parties to give strategic thought to how they intend for disputes to be resolved, both prior to contracting and once a dispute emerges.

The 2004 Agreement contained an arbitration clause and yet Eland Thailand commenced the Accra Proceedings.

Eland Ghana entered an unconditional appearance in the Accra Proceedings and issued an affidavit that indicated that it would defend the case on its merits and that the Accra Court would determine the dispute. Despite taking such steps, Eland Ghana subsequently sought to arbitrate the dispute.

The case acts as a cautionary tale for parties. Real thought and care is required when taking steps in dispute resolution. A failure to exercise sufficient care can have significant consequences as a party may be unable to have a dispute resolved in the manner that it desires.

Article written by Kort Egan – first published by Practical Law’s Arbitration Blog.


Kort Egan

Call: 2017


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