US court reveals Ghana's mistakes in $134m Trafigura judgement debt appeal
A U.S. District Court document has shown a sequence of errors made by Ghana's legal staff, culminating in the inability to oppose a significant $134 million judgement handed to British energy corporation, Trafigura.
The decision, originally issued by English courts, derives from a complex and highly important legal struggle centered on a power purchase deal between Trafigura's subsidiary, the Ghana Power Generation Company (GPGC), and the Ghanaian government.
This legal battle fight began on January 26, 2021, when a UK tribunal issued a decisive final award concluding that the Ghanaian government violated its contractual responsibilities under the power purchase agreement with GPGC.
This breach happened when Ghana unilaterally terminated the agreement on February 18, 2018.
The tribunal's conclusions were damning, ruling that Ghana was required to pay GPGC a staggering $134,348,661 as an early termination payment.
This momentous decision not only required an early termination payment, but also imposed an additional financial strain on Ghana.
The tribunal ordered the Ghanaian government to reimburse GPGC for its arbitration fees and expenses, which totaled $3,309,877.74.
The interest on this money was fixed at a three-month USD LIBOR rate, compounded quarterly.
Despite the tribunal's unambiguous and enforceable decision, Ghana's response was inadequate.
Instead of paying the loan in full, the Ghanaian government made only piecemeal payments totaling $1,897,692.40.
This left a significant deficit of $111,493,828.92 in arrears, with interest accruing on the outstanding amount.
The case became more complicated when Ghana attempted to challenge the UK verdict, but failed to do so within the required 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 Ghana's attempt to move the case to American courts.
However, this decision came after the Ghanaian legal team had already missed important dates to appeal the award in the UK, a failure that would have serious ramifications.
Judge Boasberg's ruling sheds light on the succession of procedural errors that led to Ghana's current situation.
Ghana initially obtained an extension from UK courts to contest the tribunal's ruling.
Despite the delay, the Ghanaian legal team failed to meet the new deadline. The situation was exacerbated when Ghana's subsequent request for a second extension was granted by UK courts, which deemed Ghana's grounds for challenging the ruling "intrinsically weak."
Due to these errors, Judge Boasberg granted a Motion for Default Judgment in favor of the Ghana Power Generation Company.
This ruling granted GPGC $111,493,828.92, representing Ghana's unpaid debt. Furthermore, the order contained required post-judgment interest, which only added to the Ghanaian government's financial burden.
Source: Lead News Online
