A court in US has ruled in favour of the Ghana Power Generation Company (GPGC), ordering the Ghanaian government to pay $111.5mn, plus post-judgment interest.
The judgment follows Ghana’s failure to fully comply with a prior ruling by a UK tribunal, reports Joy News.
On January 26, 2021, a UK tribunal found that Ghana breached its contractual obligations by terminating a power purchase agreement with GPGC on February 18, 2018. The tribunal awarded GPGC $134,348,661 in damages, calculated based on an Early Termination Payment formula in the agreement.
The award included an interest rate of six-month USD LIBOR plus 6%, and reimbursement of GPGC’s arbitration fees and expenses totaling $3.3mn , with interest compounded quarterly.
Ghana had argued that GPGC failed to meet certain contractual conditions, justifying the termination. However, the tribunal rejected this defense, ruling in favour of GPGC, writes Joy News. Despite the ruling, Ghana only made partial payments totaling $1.8mn, leaving a substantial balance.
After failing to secure the remaining payment from Ghana, GPGC filed a case in the U.S. District Court on January 19, 2024, seeking to recover the outstanding debt under the New York Convention and the Federal Arbitration Act.
Court documents show that Ghana was served with the petition on January 23, 2024, through Shirley Ayorkor Botchwey, Ghana’s Minister for Foreign Affairs and Regional Integration. The documents were delivered in Ghana on January 29, 2024, with a signed confirmation of receipt.
Ghana did not respond by the March 29, 2024 deadline and failed to appear in court. The U.S. court asserted its jurisdiction over the case under the New York Convention, which requires member states to recognise and enforce arbitral awards from other member countries. The court also noted that Ghana had waived its sovereign immunity by committing to international arbitration under the power purchase agreement.
In his August 6, 2024 memorandum opinion, Chief Judge James E. Boasberg said that the arbitral award, which arose from a commercial relationship between non-U.S. parties, falls under the New York Convention. While the judge denied pre-judgment interest to GPGC, he confirmed that post-judgment interest would be awarded at the rate specified in U.S. law, further increasing Ghana’s financial obligations.
Source: Daily Mail GH
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