A U.S. District Court in Washington, D.C., has ruled against the Ghanaian government, ordering it to pay $111.5 million plus additional interest to the Ghana Power Generation Company (GPGC). This decision follows Ghana’s failure to comply with an earlier London tribunal ruling that found the government had wrongfully terminated a power purchase agreement with GPGC, whose majority shareholder is Singaporean multinational Trafigura.
The dispute dates back to February 2018, when Ghana ended its contract with GPGC. The company argued that the termination was unjustified, and in January 2021, the London Court of International Arbitration, agreed, awarding GPGC $134.3 million in damages. This amount was based on an Early Termination Payment clause in the contract, along with interest. Ghana, however, only made partial payments, leaving a large portion unpaid.
“Despite the ruling, Ghana only made partial payments, amounting to $1,897,692.40, leaving $111,493,828.92 in arrears accruing interest,” a Joy News report said.
After multiple unsuccessful attempts to recover the outstanding amount, GPGC turned to the U.S. courts in January 2024, invoking the New York Convention and the Federal Arbitration Act to enforce the UK tribunal’s decision. Ghana was officially notified of the U.S. legal proceedings but missed the deadline to respond by March 29, 2024.
Chief Judge James E. Boasberg, who presided over the case, emphasized that the court had jurisdiction because of the New York Convention, which requires member countries to recognize and enforce international arbitral awards. The court also noted that Ghana had waived its sovereign immunity when it agreed to international arbitration under the power purchase agreement.
In his ruling on August 6, 2024, Judge Boasberg confirmed the enforcement of the UK tribunal’s award, granting GPGC $111.5 million plus post-judgment interest.
This judgment adds to the financial strain on Ghana, which had already been criticized for its weak attempts to challenge the tribunal’s decision in the UK. With an ongoing economic crisis, civil society actors have said the issues could have been avoided and blamed it on the attorney general’s “ill advice” to the government, leading to the hasty contract termination with the company.
“You can say it is part of our poor planning as well as the ill advice from the Attorney-General’s office. I see that this is a cost that could have been avoided,” Dennis Asare, a Senior Research Associate with think-tank Imani Africa told Joy News last year at the height of concerns that some of Ghana’s properties in London risked being sold to offset the $140 million judgment debt awarded to Trafigura.
Ghana had initially sought to contest the ruling in the UK courts but missed key deadlines, leading to this costly default judgment in the U.S.
