District of Columbia Court in the United States has ordered the Ghanaian government to pay $111,493,828.92, along with mandatory post-judgment interest, after granting a Motion for Default Judgment in favor of PGC.
This ruling follows Ghana’s disregard for a previous tribunal decision from the United Kingdom. The dispute originated after Ghana terminated a power purchase agreement with GPGC on February 18, 2018.
A UK tribunal, in its Final Award on January 26, 2021, ruled that Ghana had breached its contractual obligations.
Ghana had argued that the contract was terminated because the foreign power company failed to meet specific contractual requirements.
However, the tribunal disagreed, awarding GPGC $134,348,661 in damages, calculated using the Early Termination Payment formula from the purchase agreement.
The damages included compensation for GPGC’s arbitration fees and expenses totaling $3,309,877.74, with interest at three-month USD LIBOR, compounded quarterly, and an interest rate of six-month USD LIBOR + 6%.
After unsuccessful efforts to collect the outstanding payment from Ghana, GPGC filed a lawsuit in the U.S. District Court on January 19, 2024, seeking recovery of the growing debt under Chapter 2 of the Federal Arbitration Act and the New York Convention.
Court documents reveal that Ghana’s Minister of Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey, received the petition from the US court on January 23, 2024, with the documents being officially delivered to Ghana on January 29, 2024.
However, Ghana failed to appear in court or respond by the deadline of March 29, 2024.
The court, citing the New York Convention—which the United States has adopted and which recognizes arbitral awards made in the United Kingdom—affirmed its jurisdiction over the case.
The court also noted that Ghana had consented to international arbitration in the power purchase agreement and had explicitly waived its sovereign immunity, as reported by adomonline.com.
In his memo 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 falls under 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 still faces significant financial strain due to the court’s award of post-judgment interest at the rate specified in US regulations.