Ghana has been ordered to pay a staggering $111,493,828.92, along with mandatory post-judgment interest, after a U.S. Court in Washington, D.C., ruled in favor of the Ghana Power Generation Company (GPGC). The court’s decision came after Ghana failed to respond to a petition by the set deadline, leading to a Motion for Default Judgment.
This ruling is the latest chapter in an ongoing legal dispute that began when Ghana terminated a power purchase agreement with GPGC on February 18, 2018. GPGC sought arbitration, and in January 2021, a UK tribunal ruled that Ghana had violated its contractual obligations, awarding GPGC $134,348,661 in damages. This sum was calculated using the Early Termination Payment formula outlined in the power purchase deal.
Ghana defended its actions, claiming that GPGC had failed to meet certain contract terms. However, the tribunal disagreed and held Ghana accountable. The award also included $3.3 million in arbitration fees and expenses, plus interest calculated at three-month USD LIBOR, compounded quarterly, along with a rate of six-month USD LIBOR + 6%.
After failing to receive payment from Ghana, GPGC took legal action in the U.S., filing a lawsuit in January 2024 to recover the mounting debt. The Federal Arbitration Act’s Chapter 2 and the New York Convention, both of which recognize arbitral awards from foreign countries, supported GPGC’s case.
Despite receiving formal notice of the proceedings, Ghana did not appear in court or respond by the deadline, March 29, 2024. This misstep allowed GPGC to pursue a default judgment, which Chief Judge James E. Boasberg granted on August 6, 2024.
Judge Boasberg emphasized that the arbitration award was a result of a commercial dispute, well within the framework of the New York Convention, which both the U.S. and Ghana recognize. He also noted that Ghana had waived its sovereign immunity by agreeing to the terms of international arbitration within the power purchase agreement.
While the court did not grant pre-judgment interest, the ruling still leaves Ghana with a significant financial burden, including post-judgment interest, which continues to accumulate. This interest only adds to the growing pressure on the Ghanaian government, which now faces the hefty task of paying the judgment.
In the end, Ghana’s failure to respond and resolve the issue in time has left the country with a multimillion-dollar debt, adding another layer of complexity to an already challenging financial situation.
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