The government of Ghana has been ordered by a U.S. district court to pay $111.5 million, along with accruing interest, to energy firm Trafigura’s Ghana Power Generation Company (GPGC).
The ruling follows Ghana’s failure to challenge a $134 million judgment awarded by English courts, stemming from a terminated power purchase agreement.
According to myjoyonline.com report, the origins of the dispute trace back to February 18, 2018, when Ghana prematurely ended its contract with GPGC, a subsidiary of Trafigura. This led to a UK tribunal’s Final Award on January 26, 2021, which found Ghana in breach of its contractual obligations.
The report explained that the tribunal ordered Ghana to pay GPGC $134.3 million as an Early Termination Payment, with interest at six months USD LIBOR plus 6%.
Additionally, Ghana was instructed to cover GPGC’s arbitration fees and expenses, totaling $3.3 million, with interest at three-month USD LIBOR, compounded quarterly.
Despite the ruling, Ghana made only partial payments, leaving $111.5 million in outstanding debt. In a memorandum opinion dated August 6, 2024, Chief Judge James E. Boasberg of the District of Columbia Court highlighted Ghana’s repeated failures to challenge the UK judgment.
Ghana had initially secured an extension to appeal the tribunal’s decision in English courts but missed the deadline. A subsequent request for a second extension was denied, with UK courts labelling Ghana’s arguments as “intrinsically weak.”
As a result of Ghana’s inaction, Judge Boasberg granted a Motion for Default Judgment in favour of GPGC, effectively reinforcing the financial obligations imposed by the original UK tribunal ruling.
AM/OGB
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