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General News of Friday, 4 April 2014

Source: tv3network.com

Balkan Energy had claimed $3b in damages – AG

US firm Balkan Energy (Ghana) Limited had claimed damages totaling $3 billion.

That amount was being claimed as a result of a tolling fee provision in the long-term agreement between Government of Ghana and Balkan.

These were contained in a statement issued by the Attorney General, Marietta Brew Appiah-Oppong.

The company had also claimed over $40 million compensation for “unjust enrichment," according to the statement.

However, a ruling by the Permanent Court of Arbitration in The Hague awarded Balkan $12 million “for work performed”.

The government of Ghana and Balkan Energy went into an agreement in 2007 for the latter to refurbish the power barge. However, following government of Ghana’s abrogation of the contract, the US company expressed its grievance over the issue by taking the matter up to the Permanent Court of Arbitration.

But according to Ms. Appiah-Oppong’s statement, Balkan appeared to have failed in performing its obligations.

Below is the full statement:

MINISTRY OF JUSTICE & ATTORNEY GENERAL PRESS RELEASE

For Immediate Release

TRIBUNAL REJECTS CLAIMS FOR $3 BILLION US AGAINST GHANA


In a substantial decision issued on Tuesday, April 1st, the Permanent Court of Arbitration in The Hague rejected claims against the Government of Ghana, brought by project developer Balkan Energy (Ghana) Limited, an affiliate of Texas-based Balkan Energy Company.

Balkan had claimed damages totaling more than $3 billion US based on a tolling fees provision in a long-term Power Purchase Agreement entered into in 2007 between Balkan and the Government’s Ministry of Energy (PPA).

While upholding the validity of the PPA, the Tribunal found that Balkan had failed to perform its obligations under the PPA, which required Balkan to refurbish and commission the Osagyefo Power Barge, a 125 MW dual fired power barge and associated facilities in Effasu in the Western Region.

The Tribunal also rejected Balkan’s claim for over $40 million US in damages for unjust enrichment. The Tribunal concluded that the evidence did not demonstrate that Balkan had conferred any demonstrable benefit on the Government.

Instead, the Tribunal awarded Balkan limited damages of $12 million US for work performed and rejected the bulk of Balkan’s claim of alleged expenditures.

Finally, the Tribunal held that the PPA was terminated and returned control of the Barge to the Government. The Government was further awarded $300,000 US in damages, the maximum amount of damages that it could award the Government under the PPA. The Tribunal determined that the costs of the arbitration are to be shared between the parties.

MARRIETA BREW APPIAH OPPONG

MINISTER OF JUSTICE & ATTORNEY GENERAL

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