Statement: Information Minister confirms and explains $12 million awarded Balkan Energy

• Posted on April 4, 2014
• by Nana Kwesi Coomson
• Comment

Minister of Information and Media Relations, Mahama Ayariga has explained that the $12 million awarded Balkan Energy Ghana Limited is for work done by the company and not a judgement debt.

According to him the amount awarded by the Permanent Court of Arbitration in The Hague is the amount paid for the actual work Balkan did in relation to the Osagyefo Power Barge, a 125 MW dual fired power barge and associated facilities in Effasu in the Western Region.

‘’Our rejection of the publication was the impression that Balkan had actually won the case and then government had led this country into a judgement debt; no this one is actual work that the company did, which was accessed and for which naturally we would have paid whether we had gone to arbitration or not,’’ he said.

Government in a statement signed by the Minister for Justice and Attorney General, Marrieta Brew AppiahOppong on Thursday said “Tribunal also rejected Balkan’s claim for over $40 million US in damages for unjust enrichment. The Tribunal concluded that the evidence did not demonstrate that Balkan had conferred any demonstrable benefit on the government.’’

”Instead, the Tribunal awarded Balkan limited damages of $12 million US for work performed and rejected the bulk of Balkan’s claim of alleged expenditures,’’ the statement added.

Meanwhile a former Attorney General, Nii Ayikoi Otoo said per the statement by the AG’s department the amount Ghana is paying in law can be referred to as Quantum Meruit [reasonable value of service].

”If the Attorney General is telling us that the International arbitration has awarded $12 million for work done on the barge, then I do not think there is anything wrong with it,” he stated.

Below is the full statement signed by the Attorney General

MINISTRY OF JUSTICE & ATTORNEY GENERAL
PRESS RELEASE

For Immediate Release

TRIBUNAL REJECTS CLAIMS FOR $3 BILLION US AGAINST GHANA

In a substantial decision issued on Tuesday, April 1st, the Permanent Court of Arbitration in The Hague rejected claims against the Government of Ghana, brought by project developer Balkan Energy (Ghana) Limited, an affiliate of Texas-based Balkan Energy Company.

Balkan had claimed damages totaling more than $3 billion US based on a tolling fees provision in a long-term Power Purchase Agreement entered into in 2007 between Balkan and the Government’s Ministry of Energy (PPA).

While upholding the validity of the PPA, the Tribunal found that Balkan had failed to perform its obligations under the PPA, which required Balkan to refurbish and commission the Osagyefo Power Barge, a 125 MW dual fired power barge and associated facilities in Effasu in the Western Region.

The Tribunal also rejected Balkan’s claim for over $40 million US in damages for unjust enrichment. The Tribunal concluded that the evidence did not demonstrate that Balkan had conferred any demonstrable benefit on the Government.

Instead, the Tribunal awarded Balkan limited damages of $12 million US for work performed and rejected the bulk of Balkan’s claim of alleged expenditures.

Finally, the Tribunal held that the PPA was terminated and returned control of the Barge to the Government. The Government was further awarded $300,000 US in damages, the maximum amount of damages that it could award the Government under the PPA. The Tribunal determined that the costs of the arbitration are to be shared between the parties.

MARRIETA BREW APPIAH OPPONG

MINISTER OF JUSTICE & ATTORNEY GENERAL
(3^rd April 2014)

By: Evans Effah