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General News of Friday, 4 April 2014

Source: myjoyonline.com

Ghana can go for a review in Balkan Energy case if... - Ayikoi Otoo

A former Attorney General under the erstwhile Kufuor administration has partly supported a $12 million judgement debt handed US firm Balkan Energy against the Government of Ghana, but says Ghana has the option of a review if the country is not satisfied with the ruling.

Ayikoi Otoo says under the "quantum merit principle," Balkan Energy is entitled to be paid for the work they have done.

"They are working on a principle called quantum merit. If the people have worked for you to a certain extent, but they did not conclude it, but there is evidence that they have worked then they are entitled to be paid how much they have worked," Ayikoi Otoo explained in an interview on Joy FM's Top Story.

Balkan was awarded a $12 million judgement debt by the International Court of Arbitration in a case they brought against the Government of Ghana.

He was quick to add that Ghana still has the Osagyefo Barge which should be of interest to Ghana.

In July 2007, the Government of Ghana entered a 20-year lease agreement with the company, Balkan Energy Ghana, to refurbish and operate the power barge, initially using diesel fuel and later using gas to be delivered by the West African Gas Pipeline.

Balkan Energy promised to begin operations within 90 days after the lease agreement had been signed.

They were also expected to increase the barge's generating capacity by 60 MW, bringing it from its current capacity of 125 MW up to 185 MW.

The company failed to honour its obligations, forcing the Government of Ghana to proceed to court to annul the contract.

Ghana's Supreme Court ruled that the contract entered into by Balkan was null and void because it was not approved by Parliament.

Per Ghana's laws, all international agreements had to be approved by the country's lawmaking body.

Not impressed with the decision by the Supreme Court, Balkan Energy went to the Court of Arbitration with a suit of $3 billion compensation and $40 million of the contract value against Ghana for a wrongful abrogation of a contract it entered into with the Government of Ghana to manage the 125 MW Osagyefo Badge.

The Court of Arbitration awarded damages of $12 million against the government of Ghana.

A copy of the ruling intercepted by Joy News indicates that indeed Balkan was awarded 12 million dollars. However, the Government of Ghana was also awarded an amount of $300,000.

The Court of Arbitration has, meanwhile, terminated the contract between the Government of Ghana and Balkan Energy for the administration of the Osagyefo Badge.

Explaining the rationale for such international arbitrations, Ayikoi Otoo said individuals or international organisations have the right to go for international arbitrations especially when they believe they will not receive a fair hearing in the courts of the country against whom a case is being brought.

He said Ghana is bound by international arbitration decisions because once "we have submitted ourselves and decided to go before the court, we are bound by the decision that the court will take."

He stated that if Ghana is not impressed with the decision by the international arbitration, they still have the option of a review.

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