A District of Columbia Court in the United States, which granted a Motion for Default Judgment in favor of Ghana Power Generation Company (GPGC), has directed government to pay $111,493,828.92 together with obligatory post-judgment interest
This ruling was necessitated by Ghana’s disregard for a previous tribunal verdict from the United Kingdom
In the aftermath of Ghana’s termination of a power purchase deal with Ghana Power Generation Company (GPGC) on February 18, 2018, a UK tribunal discovered in its Final Award, on January 26, 2021, that Ghana had breached it contractual obligations.
Ghana stated that the contract was terminated because the foreign power company failed to meet certain contractual obligations.
However, the tribunal disagreed and awarded GPGC $134,348,661 in damages, calculated using the Early Termination Payment formula outlined in the purchase agreement.
The award also includes reimbursement of GPGC’s arbitration costs and expenses totaling $3,309,877.74, with interest at the three-month USD LIBOR rate, compounded quarterly, and an additional interest rate of six-month USD LIBOR + 6%.
After unsuccessful attempts to collect the outstanding payment from Ghana, GPGC filed a lawsuit on January 19, 2024, in the U.S. District Court, seeking recovery of the growing debt under Chapter 2 of the Federal Arbitration Act and the New York Convention.
Court records show that Ghana’s Minister of Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey, was served with the petition from the U.S. court on January 23, 2024.
The signed certification of receipt indicated that the documents were delivered to Ghana on January 29, 2024.
Despite this, Ghana did not appear in court or respond by the March 29, 2024, deadline.
The court ruled that it had jurisdiction over the case, citing the New York Convention, which the United States has adopted and which recognizes arbitral awards made in the United Kingdom.
The court also noted that in the power purchase agreement, Ghana had agreed to submit to international arbitration and had explicitly waived its sovereign immunity, according to a report by adomonline.com.
In his memorandum ruling dated August 6, 2024, Chief Judge James E. Boasberg emphasized that the arbitral award between the non-U.S. parties stemmed from a commercial transaction, which is governed by the New York Convention.
The Convention requires member states to recognize and enforce such awards, regardless of the parties’ nationality or residence.
Although the judge did not grant GPGC pre-judgment interest, Ghana will still face a financial burden due to the court’s award of post-judgment interest at the rate specified by U.S. regulations.