![U.S court slaps Ghana with $111m judgment debt over GPGC contract termination](https://ocdn.eu/pulscms/MDA_/e9bb7e579c77b23def795ecb3cb68e91.png)
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A District Court in the United States has awarded over $111 million in judgment debt against Ghana in favour of Ghana Power Generation Company (GPGC).
The ruling follows Ghana's failure to fully comply with an earlier tribunal decision from the United Kingdom.
On January 26, 2021, a UK tribunal issued a Final Award, concluding that Ghana had breached its contractual obligations by terminating a power purchase agreement with GPGC on 18 February 2018.
Ghana had argued that the foreign power company had failed to meet certain contractual conditions, leading to the termination of the contract.
However, the court disagreed and awarded the judgment debt.
It is worth recalling that after a court in the United Kingdom awarded $140 million in costs against Ghana in 2021 for the termination of the power deal with GPGC, Ghana was ordered to pay the full amount of the Early Termination Payment, valued at $134,348,661, along with the costs associated with mobilisation, demobilisation, and preservation and maintenance.
The court also ordered Ghana to pay all accrued interest. Additionally, the government was required to cover the arbitration costs and GPGC’s legal fees, which amounted to over $3 million. Trafigura, an oil trader, was positioned to sell Ghana's assets in the UK to raise the amount the government owed.
On June 23, 2003, Ghana filed an application to set aside the order, but the court dismissed it.u
Deputy Attorney-General Alfred Tuah Yeboah stated that although a partial payment was made, the state was unable to adhere to the instalment payment plan. Despite the ruling, Ghana only made partial payments amounting to $1,897,692.40, leaving a significant outstanding balance.
After unsuccessful attempts to secure the remaining payment from Ghana, GPGC filed a case in the U.S. District Court on 19 January this year under the New York Convention and Chapter 2 of the Federal Arbitration Act, seeking to recover the compounding debt.
Court documents reveal that the U.S. court served Ghana with the petition on January 23, this year, through Ghana’s Minister for Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey, who confirmed receipt.
However, Ghana failed to respond by March 29, deadline and did not appear in court proceedings.
The court determined that it had jurisdiction over the case, citing the New York Convention, which the U.S. has ratified, recognising UK arbitral awards.
The court also noted that Ghana had explicitly waived its sovereign immunity and committed to international arbitration under the power purchase agreement.
Earlier this month, Chief Judge James E. Boasberg emphasised that the arbitral award between the non-U.S. parties arose out of a commercial relationship, which falls under the New York Convention.
The Convention requires member states to recognise and enforce such awards, regardless of the parties’ citizenship or domicile.
While the judge did not grant pre-judgment interest to GPGC, the court will award post-judgment interest at the rate specified in U.S. codes, adding to Ghana's financial burden.
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