Trafigura’s Ghana Power Generation Company (GPGC) has served notice to the government of Ghana that it has commenced the process to implement the arbitration in its favour following the failure of the government to pay up its $134 million judgment debt.
In a letter to the Minister for Finance, Dr. Mohammed Amin Adam, which has been sighted by GhanaWeb, Trafigura also indicated that in addition to the 16 banks with ties to the government of Ghana, it plans to subpoena US-based corporations affiliated with the government.
“Further to our letter of September 20, 2024, to which we have not yet received a response, we can confirm that we have today filed the relevant papers to commence enforcement of the arbitral award in South Africa. As a courtesy, we have enclosed at Annex 1 the filings with this letter as service on the government of Ghana through diplomatic channels may take some months.
“In addition to the 16 banks based in the United States that GPGC has subpoenaed (as evidenced in the attached at Annex 2), we plan to issue further subpoenas to US-based corporations with ties to the Government of Ghana later this week, with further action to follow,” part of the letter, which was signed by the Director of GPGC, Patrick Burke, reads.
The company, however, indicated that it would prefer not to implement the arbitral award against the government of Ghana.
It asked the government to settle the judgment within a week to prevent it from implementing the judgment of the court.
“We would nevertheless like to reiterate the message of our previous correspondence, that we would prefer not to take any further enforcement action and instead to resolve the matter amicably by fully executing the settlement agreement, as soon as possible, ideally within this week, and receiving payment in accordance with the agreed schedule,” it said.
One of Ghana’s prized properties in the United Kingdom (UK), the Regina House in London, was reportedly taken over by Trafigura after the government of Ghana failed to pay the $134 million judgment awarded against it for cancelling a power agreement by a UK court.
After Ghana terminated a power purchase deal with Ghana Power Generation Company (GPGC) on February 18, 2018, a UK tribunal found on January 26, 2021, in its final award, that Ghana had broken its contractual duties.
According to Ghana, the contract was terminated because the foreign power company did not fulfil certain contractual obligations.
The tribunal, however, disapproved and granted GPGC $134,348,661 in damages, which were computed using the purchase agreement’s Early Termination Payment formula.
The award includes compensation of GPGC’s arbitration fees and expenses in the amount of $3,309,877.74, with interest at three-month USD LIBOR, compounded quarterly, and an interest rate of six-month USD LIBOR + 6%.
Following fruitless attempts to obtain the outstanding payment from Ghana, GPGC filed a lawsuit on January 19, 2024, in the U.S. District Court, claiming recovery of the mounting debt under the Federal Arbitration Act’s Chapter 2 and the New York Convention.
BAI/BB
