The government of Ghana (GoG) has been hit by yet another judgment debt in the energy sector as a result of the cancelation of the Emergency Purchase Agreement (EPA) between the government of Ghana and Ghana Power General Company Ltd (GPGC).
According to a final judgment delivered on January 26, 2021, Mr. John Beechey, CBE, Presiding Arbitrator of the International Court of Arbitration in the United Kingdom, the government of Ghana is ordered to pay the GPGC about US$137.6million constituting a judgment debt for the cancelation of the EPA signed between the two parties on June 3, 2015, rectified by the Parliament of Ghana on July 23, 2015.
The Tribunal finds and also declared that “ORDERS GoG to pay to GPGC the full value of the Early Termination Payment, together with Mobilization, Demobilization, and preservation and maintenance costs in the amount of US$ 134,348,661, together also with interest thereon from 12 November 2018 until the date of payment, accruing daily and compounded monthly, at the rate of LIBOR for six-month US dollar deposits plus six per cent (6%).”
Summary of the judgment debt secured by the GPGC against the government of Ghana
“DISPOSITIF
- On the basis of the submissions, facts and matters in the record before it, the Tribunal finds and hereby AWARDS as follows:
- DECLARES that the EPA has been validly terminated by GPGC on account of GoG’s repudiatory conduct;
- ORDERS GoG to pay to GPGC the full value of the Early Termination Payment, together with Mobilization, Demobilization and preservation and maintenance costs in the amount of US$ 134,348,661, together also with interest thereon from 12 November 2018 until the date of payment, accruing daily and compounded monthly, at the rate of LIBOR for six-month US dollar deposits plus six per cent (6%).
- ORDERS GoG to pay US$ 309,877.74 in respect of the Costs of the Arbitration, together with US$ 3,000,000 in respect of GPGC’s legal representation and the fees and expenses of its expert witness, together with interest on the aggregate amount of US$ 3,309,877.74 at the rate of LIBOR for three-month US dollar deposits, compounded quarterly.
- DISMISSES GoG’s counterclaim for an Early Termination Payment in its entirety.
- All and any other claims and counterclaims of whatsoever nature are hereby dismissed.”
Background:
In 2015 the former President John Mahama administration in their bid of permanently solving the energy crises known in the local parlance as dumsor entered into an Emergency Purchase Agreement (EPA) with Ghana Power General Company Ltd (GPGC) on June 3, 2015. The agreement was then rectified by the Parliament of Ghana on July 23, 2015.
The agreement was however terminated in 2018 by President Akufo-Addo’s sacked Energy Minister, Boakye Agyarko on the basis that GPGC:
“a. the absence of any mutual extension by the Parties of the period within which the Conditions Precedent of the EPA were to be fulfilled;
- GPGC’s failure to reach financial close or to achieve Full Commercial Operation Date “primarily because some of the … (Conditions Subsequent) … ha[d] not been fulfilled … thirty … days after the Effective Date”;
- its failure to obtain a licence from the Energy Commission to engage in business or commercial activity for the sale of electricity such that it had no capacity to enter into the EPA, with the result that the EPA was “null and void for want of capacity”;
- GPGC’s commencement of construction activities on site without siting and construction permits such that its construction activities were “illegal”,
Read the full judgment:
[embeddoc url=”https://awakenewsroom.com/wp-content/uploads/2021/02/2019-05-20210126-Final-Award.pdf” download=”all”]
By: Efo Korsi Senyo / awakenewsroom.com