A District of Columbia Court in the United States has granted a Motion for Default Judgement in favour of the Ghana Power Generation Company (GPGC) against Ghana.
Per the directive of the court, the Ghanaian government is to pay $111,493,828.92 plus mandatory post-judgement interest.
The court directive comes after Ghana failed to fully comply with an earlier tribunal decision from the United Kingdom.
A UK tribunal on January 26, 2021, issued a final award finding that Ghana breached its contractual obligations by terminating a power purchase agreement with GPGC on February 18, 2018.
Ghana’s defence argued that the foreign power company failed to meet certain contractual conditions, leading to the contract’s termination.
But the tribunal ruled in favour of the company awarding GPGC $134,348,661 in damages, calculated based on an Early Termination Payment formula in the purchase agreement.
The award included an interest rate of six-month USD LIBOR plus 6% and reimbursement of GPGC’s arbitration fees and expenses totalling $3,309,877.74, with interest at three-month USD LIBOR compounded quarterly.
Ghana, after the ruling, made partial payments totalling $1,897,692.40.
GPGC filed a case in the U.S. District Court on January 19, 2024, under the New York Convention and Chapter 2 of the Federal Arbitration Act, after efforts to recover the outstanding balance failed.
Ghana was served with the petition on January 23, 2024, through Shirley Ayorkor Botchwey, Ghana’s Minister for Foreign Affairs and Regional Integration.
The court documents were delivered in Ghana on January 29, 2024, with a signed confirmation of receipt.
However, Ghana failed to respond by the March 29, 2024, 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, recognising UK arbitral awards.
It also emerged that Ghana had expressly waived its sovereign immunity and committed to international arbitration under the power purchase agreement.
In his August 6, 2024, memorandum opinion, Chief Judge James E. Boasberg emphasised 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 recognise and enforce such awards, regardless of the parties’ citizenship or domicile.
GPGC pre-judgment interest was not granted, however, the court will award post-judgment interest at the rate stated in US regulations, which will increase Ghana’s financial burden.
By: Rainbowradioonline.com/Ghana
