A U.S. District Court in Washington, D.C., has ordered the Ghanaian government to pay $111,493,828.92 in a judgment debt to the Ghana Power Generation Company (GPGC).
The court’s decision comes after Ghana’s failure to comply with an earlier arbitration award issued by a tribunal in the United Kingdom.
The dispute traces back to February 18, 2018, when Ghana terminated a power purchase agreement with GPGC. This decision led GPGC to seek redress through arbitration.
On January 26, 2021, a UK tribunal ruled that Ghana had breached its contractual obligations and awarded GPGC $134,348,661 in damages.
The damages were calculated based on the contract’s Early Termination Payment formula and included compensation for arbitration fees and expenses amounting to $3,309,877.74.
The tribunal’s decision also included an interest component, calculated at the three-month USD LIBOR rate, compounded quarterly, plus an additional interest rate of six-month USD LIBOR + 6%. Despite this ruling, Ghana has not settled the awarded amount.
Unable to collect the debt from Ghana through direct negotiations, GPGC filed a lawsuit in the U.S. District Court on January 19, 2024.
The lawsuit aimed to enforce the tribunal’s award under the Federal Arbitration Act and the New York Convention, which facilitates the recognition and enforcement of foreign arbitral awards.
On January 23, 2024, the U.S. court served the petition to Ghana’s Minister of Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey.
The signed certification of receipt confirmed that the documents were delivered to Ghana on January 29, 2024. Despite this, Ghana did not respond to the court proceedings or the lawsuit by the deadline of March 29, 2024.
Chief Judge James E. Boasberg, in his memo ruling dated August 6, 2024, emphasized that the court had jurisdiction over the case based on the New York Convention, which both Ghana and the United States have adopted.
This international treaty recognizes and enforces arbitral awards made in member states, such as the UK.
Judge Boasberg highlighted that Ghana had agreed to international arbitration and had waived its sovereign immunity in the power purchase agreement. This waiver allowed the court to proceed with the enforcement of the arbitral award despite Ghana’s non-participation.
“The judgment between the non-U.S. parties resulted from a commercial transaction, covered by the New York Convention,” Chief Judge Boasberg noted. “The Convention mandates that member states acknowledge and uphold these awards regardless of the parties’ citizenship or residence.”
Although the court did not grant pre-judgment interest, Ghana will be liable for post-judgment interest at the rate established by U.S. regulations. This additional financial burden compounds the existing debt and could further strain Ghana’s finances.
GPGC, the claimant, has not yet been awarded the pre-judgment interest it sought. However, the substantial post-judgment interest and the court’s decision to enforce the full amount of the award reflect the seriousness with which the court is treating this case.
