A District of Columbia Court in the United States has granted a Motion for Default Judgment in favour of the Ghana Power Generation Company (GPGC), ordering the Ghana government to pay $111,493,828.92, plus mandatory post-judgment interest.

This 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, finding that Ghana breached its contractual obligations by terminating a power purchase agreement with GPGC on February 18, 2018.

Ghana had argued that the foreign power company failed to meet certain contractual conditions, leading to the contract’s termination.

However, the tribunal disagreed, awarding GPGC $134,348,661 in damages, calculated based on an Early Termination Payment formula in the purchase agreement.

The award included an interest rate of six-month USD LIBOR plus 6%, and reimbursement of GPGC’s arbitration fees and expenses totaling $3,309,877.74, with interest at three-month USD LIBOR, compounded quarterly.

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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.

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.