A District Court in the United States has awarded in excess of 111 million dollars judgment debt against Ghana in favour of Ghana Power Generation Company (GPGC). The ruling follows Ghana’s failure to fully comply with an earlier tribunal decision from the United Kingdom.
On January 26, 2021, a UK tribunal issued a Final Award, finding that Ghana breached its contractual obligations by terminating a power purchase agreement with GPGC on February 18, 2018.
Ghana had argued, that the foreign power company failed to meet certain contractual conditions, leading to the contract’s termination. But the court disagreed and awarded the judgement debt.
It will be recalled that after a court in the United Kingdom in 2021 awarded a 140 million dollars cost against Ghana for the termination of the power deal with GPGC, Ghana was accordingly ordered by the court to make full payment of the value of the Early Termination Payment of $134,348,661 together with the “Mobilisation, Demobilization and preservation and maintenance costs” of the value.
The court also ordered Ghana to pay all the interest that has accrued from it. In addition, the government was asked to pay the cost of the arbitration and the legal fees of GPGC, which amounted to over $3 million.
Trafigura, an oil trader was in the position to sell Ghana’s assets in the UK in order to raise the amount the government of Ghana owed it. On 23rd June, 2003, Ghana filed an application to set aside the order but the court dismissed the application.
Deputy Attorney-General Alfred Tuah Yeboah said although part payment was made, the state was unable to meet the installment payment plan.
Despite the ruling, Ghana only made partial payments totaling $1,897,692.40, leaving a significant outstanding balance. After unsuccessful attempts to secure the remaining payment from Ghana, GPGC filed a case in the U.S.
District Court on January 19 this year under the New York Convention and Chapter 2 of the Federal Arbitration Act, seeking to recover the compounding debt. Court documents reveal that the
U.S. court served Ghana with the petition on January 23, this year through, Ghana’s Minister for Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey, with a signed confirmation of receipt.
However, Ghana failed to respond by the March 29, deadline and did not appear in the court proceedings. The court determined that it had jurisdiction over the case, citing the New York Convention, which the U.S. has ratified, recognizing UK arbitral awards.
The court also noted that Ghana had expressly waived its sovereign immunity and committed to international arbitration under the power purchase agreement. Early this month, Chief Judge James E. Boasberg emphasized that the arbitral award between the non-U.S. parties arose out of a commercial relationship, which falls under the New York Convention.
The Convention requires that member states recognize and enforce such awards, regardless of the parties’ citizenship or domicile.
While the judge did not grant pre-judgment interest to GPGC, the court will award post-judgment interest at the rate specified in U.S. codes, adding to the financial burden on Ghana.
SOURCE: MYJOYONLINE
