$111m judgement debt is not a fresh case – Godfred Dame clarifies US Court order

• Posted on August 22, 2024August 22, 2024
• by Nana Kwesi Coomson
• Comment

The $111 million judgment debt case awarded in favour of Ghana Power Generation Company by the court in the United States is not a new case, Attorney-General Godfred Dame has said.

He explained that this award was given way back in 2021 and the government since then has had the obligation to pay and indeed they have been making efforts to pay. It is the failure to exhaust payment which has led to the company seeking enforcement orders in other jurisdictions.

“This award was given way back in 2021 and the government since then has had the obligation to pay and indeed they have been making efforts to pay. It is the failure to exhaust payment which has led to the company seeking enforcement orders in other jurisdictions. It is not the case where there has been a new judgement or a fresh award given by any court or any tribunal anywhere.”

“…The impression that is sought to be created by the publication that I have seen today- another judgment debt, a new judgment debt, US Court awards, there is no US Court which is awarding judgment against the government of Ghana. It is only an enforcement order and that enforcement order is on account of a failure to pay a judgment debt which accrued way back in January 2021 as a result of an award that was given that time,” he told Accra-based Citi.

Following the failure of the Government of Ghana to fully comply with an earlier tribunal decision from the United Kingdom, a District of Columbia Court in the United States has awarded a  $111,493,828.82 judgment debt against Ghana in favour of the Ghana Power Generation Company (GPGC).

The court, in granting the Motion for Default Judgment in favour of GPGC, also ordered Ghana to pay mandatory post-judgment interest.

It is recalled that a court in the United Kingdom in 2021 awarded a $140 million arbitral against Ghana for the termination of a power deal with GPGC.

The government was accordingly ordered by the court to make full payment of the value of the Early Termination Payment of $134,348,661 together with the “Mobilisation, Demobilization and preservation and maintenance costs” of the value. The court also ordered Ghana to pay all the interest that has accrued from it.

In addition, the government was asked to pay the cost of the arbitration and the legal fees of GPGC, which amounted to over $3 million.

Trafigura, an oil trader was in the position to sell Ghana’s assets in the UK in other to raise the amount of money the government of Ghana owed it.

On 23rd June, 2003, Ghana filed an application to set aside the order but the court dismissed the application.

Deputy Attorney-General Alfred Tuah Yeboah said although part payment was made, the state was unable to meet the installment payment plan.

“Having failed to do so, the judgment creditor decided to execute the judgment. They attached property belonging to the Republic in the UK, and then they sought to serve us with that process. We then filed a motion trying to set aside the process through which we were served but the High Court in England said no, and that the service on us [state] was properly made. So now, the Ministry of Finance has been advised to once again approach the judgment creditors and make every effort to pay that money,” he is reported to have said.

Despite the ruling, Ghana only made partial payments totalling $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 January 19, 2024, 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, 2024, through Shirley Ayorkor Botchwey, Ghana’s Minister for Foreign Affairs and Regional Integration.

The documents were delivered in Ghana on January 29, 2024, with a signed confirmation of receipt.

However, Ghana failed to respond by the March 29, 2024 deadline and did not appear in the court proceedings.

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The court determined that it had jurisdiction over the case, citing the New York Convention, which the U.S. has ratified, recognizing UK arbitral awards.

The court also noted that Ghana had expressly waived its sovereign immunity and committed to international arbitration under the power purchase agreement.

In his August 6, 2024, memorandum opinion, Chief Judge James E. Boasberg emphasized 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 that member states recognize 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 the financial burden on Ghana.

-3news