The Attorney General and Minister of Justice, Godfred Yeboah Dame, has addressed recent reports concerning Ghana’s legal challenges related to a $134 million judgment awarded to the British energy firm Trafigura.
He emphasized that no new judgment or fresh award has been issued by any court against Ghana.
This clarification follows reports that a U.S. District Court document highlighted errors made by Ghana’s legal team, which ultimately led to the failure to challenge a significant $134 million judgment in favour of Trafigura.
The judgment, originally issued by English courts, arose from a complex legal dispute involving a power purchase agreement between Trafigura’s subsidiary, the Ghana Power Generation Company (GPGC), and the government of Ghana.
Speaking on Eyewitness News on Wednesday, August 21, Godfred Dame clarified that the arbitration award was handed down before his tenure as Attorney General.
He further noted that the government’s delay in fulfilling the terms of the arbitration is what has brought about the current enforcement efforts by Trafigura.
“It is important to point out that this was given way back in 2021 and the government since then has had the obligation to pay. Indeed they have been making efforts to pay. It is the failure to exhaust payment that has led to the company seeking enforcement in another jurisdiction. It is not a case where there has been a new judgement or a fresh award given by any court or tribunal anywhere at all,” he stated.
Background
The judgment, originally handed down by English courts, stems from a complex and highly consequential legal battle rooted in a power purchase agreement between Trafigura’s subsidiary, the Ghana Power Generation Company (GPGC), and the government of Ghana.
The origins of this legal dispute trace back to a decision made on January 26, 2021, by a UK tribunal. The tribunal issued a decisive final award, concluding that the Ghanaian government had breached its contractual obligations under the power purchase agreement with GPGC.
This breach occurred when Ghana unilaterally terminated the agreement on February 18, 2018. The tribunal’s findings were damning, ruling that Ghana was liable to pay GPGC a staggering $134,348,661 as an early termination payment.
This significant judgment not only involved the early termination payment but also included an additional financial burden on Ghana. The tribunal ordered that the Ghanaian government reimburse GPGC’s arbitration fees and expenses, which totalled $3,309,877.74. The interest on this sum was set at a three-month USD LIBOR rate, compounded quarterly, adding another layer of financial strain on the country.
Despite the clear and binding nature of the tribunal’s ruling, Ghana’s response was inadequate. Rather than settling the debt in full, the Ghanaian government made only partial payments, totalling $1,897,692.40. This left a considerable balance of $111,493,828.92 in arrears, with interest continuing to accumulate on the unpaid amount.
The situation took a more complex turn when Ghana sought to challenge the UK judgment, but only after failing to do so within the appropriate legal timelines in the UK courts.
In a memorandum dated August 6, 2024, Chief Judge James E. Boasberg of the District of Columbia court detailed how Ghana attempted to bring the case to American courts. However, this move came after the Ghanaian legal team had already missed critical deadlines to contest the award in the UK, a failure that would prove to have severe consequences.
Judge Boasberg’s opinion sheds light on the series of procedural failures that led to Ghana’s current predicament.
Initially, Ghana had managed to secure an extension from the UK courts to challenge the tribunal’s award.
However, despite this extension, the Ghanaian legal team failed to meet the new deadline. The situation was further compounded when Ghana’s subsequent request for a second extension was denied by the UK courts, which judged Ghana’s grounds for challenging the award as “intrinsically weak.”
This sequence of events left Ghana in a vulnerable position. As a result of these missteps, Judge Boasberg granted a Motion for Default Judgment in favour of the Ghana Power Generation Company. This judgment awarded GPGC the sum of $111,493,828.92, representing the outstanding balance owed by Ghana.
Additionally, the ruling included mandatory post-judgment interest, which only exacerbates the financial burden now resting on the shoulders of the Ghanaian government.
