Following the Government of Ghana’s failure to fully comply with a previous tribunal ruling from the United Kingdom, a District of Columbia Court in the United States has imposed a $111,493,828.82 judgment debt against Ghana in favor of the Ghana Power Generation Company (GPGC).
The court, in granting GPGC’s Motion for Default Judgment, also mandated Ghana to pay post-judgment interest.
This development follows a 2021 ruling by a UK court, which awarded GPGC $140 million in arbitration after Ghana terminated a power agreement with the company.
The UK court had ordered the Ghanaian government to pay the full amount of the Early Termination Payment, valued at $134,348,661, along with the “Mobilisation, Demobilization and preservation and maintenance costs.”
Additionally, the government was ordered to cover the arbitration costs and GPGC’s legal fees, which totaled over $3 million.
Trafigura, an oil trader, was positioned to liquidate Ghana’s assets in the UK to recover the funds owed by the Ghanaian government.
On June 23, 2003, Ghana filed an application to set aside the order, but the court dismissed it.
Deputy Attorney-General Alfred Tuah Yeboah explained that although a partial payment was made, the state failed to meet the installment payment plan.
“Having failed to do so, the judgment creditor decided to execute the judgment. They attached property belonging to the Republic in the UK and then sought to serve us with that process.
We filed a motion to set aside the service, but the High Court in England upheld it, ruling that the service on us [the state] was properly executed. The Ministry of Finance has now been advised to approach the judgment creditors again and make every effort to settle the debt,” he stated.
Despite the ruling, Ghana has only made partial payments amounting to $1,897,692.40, leaving a substantial balance still outstanding.
After unsuccessful attempts to secure the remaining payment from Ghana, 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, to recover the outstanding debt.
Court documents show that the U.S. court served Ghana 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 confirmation of receipt.
Ghana, however, failed to respond by the March 29, 2024 deadline and did not participate in the court proceedings.
The court ruled it had jurisdiction over the case, citing the New York Convention, which the U.S. has ratified, recognizing UK arbitral awards.
Additionally, the court noted that Ghana had expressly waived its sovereign immunity and agreed to international arbitration under the power purchase agreement.
In his August 6, 2024, memorandum opinion, Chief Judge James E. Boasberg emphasized that the arbitral award between the non-U.S. parties stemmed from a commercial relationship, which is covered under the New York Convention.
The Convention mandates that member states recognize and enforce such awards, irrespective of the parties’ citizenship or domicile.
Although the judge did not grant pre-judgment interest to GPGC, the court will award post-judgment interest at the rate specified in U.S. law, thereby increasing the financial burden on Ghana.
