The Electricity Company of Ghana (ECG) has secured a significant victory in London, with the tribunal dismissing all claims brought by Power Distribution Services Ghana Limited (PDS) regarding the termination of their concession agreement.
The tribunal upheld ECG’s position that PDS’s fraudulent payment guarantees justified the termination. This decision shields Ghana from potential financial liability and brings closure to a contentious chapter in the country’s energy sector history.
In 2019, PDS took over the management of ECG under a 20-year concession agreement, part of the Millennium Challenge Compact (MCC) programme between the Government of Ghana and the Millennium Challenge Corporation (MCC) of the United States.
The agreement aimed to bring private-sector efficiency into ECG’s operations and improve electricity distribution across the country.
However, the Government of Ghana suspended the contract due to detected fraudulent payment guarantees provided by PDS through Al Koot Insurance and Reinsurance Company of Qatar.
These guarantees were a key requirement, designed to secure PDS’s financial obligations under the concession. PDS claimed it had fulfilled all preconditions for the transfer, but investigations revealed that Al Koot had not authorised the guarantees in question.
Subsequent court rulings in Qatar, including the Qatari Court of Cassation, confirmed that the documents were indeed forged.
Following the termination of its contract, PDS dragged Ghana before a tribunal in London, claiming ECG’s actions were wrongful. PDS sought a declaration of wrongful termination, direct costs of about US$39.4 million, and alleged lost profits of US$351.5 million. ECG, represented by Omnia Strategy LLP, led by Cherie Blair KC, defended the case, maintaining that the termination was fully justified and in the national interest.
ECG argued that PDS had failed to exercise due diligence in verifying the authenticity of the payment guarantees, an omission that fundamentally undermined the concession.
After a three-year legal battle, the tribunal dismissed all of PDS’s claims in their entirety, upholding ECG’s position that the fraudulent guarantees justified the termination of the agreement.
By: Rainbowradioonline.com/Ghana
