GPGC judgement debt: It is important to fairly study the events – Former Deputy Energy Minister

• Mr Kofi Buah is calling for a retrospective reflection on the events leading to the £170 million judgement debt awarded against the government of Ghana

• He believes this will help Ghana learn lessons from the development as well as cast blames in the right direction

• His comment comes after UK arbitration court awarded a judgement debt of £170 million against Ghana for cancelling a power contract with GPGC

A former Deputy Minister for Energy, Mr Emmanuel Armah-Kofi Buah, has expressed sadness over the awarding of £170 million against the Government of Ghana.

According to Mr Kofi Buah, the judgement debt awarded against the Government of Ghana following the cancellation of a power agreement with GPGC has marred the hard work the previous NDC government placed into addressing the nations power challenges.

“As a former Deputy Energy Minister and former Energy and Petroleum Minister, I am completely heartbroken that all our hard work and singular focus to address our power challenges and ensure a stable electricity supply is being marred by a decision for a US$170 million judgement debt, which was imposed by a London commercial tribunal on behalf of Ghana Power Generation Company (GPGC) for wrongful termination of the contract,” the Ellembele MP shared in a Facebook post sighted by GhanaWeb.

Following the UK arbitration court’s ruling, blames have been cast between the current government which cancelled the contract and the previous government which entered into a contract with GPGC for the provision of a fast-track power generation solution.

Among other developments, the current Attorney General and Minister for Justice, Godfred Yeboah Dame has threatened that signatories of the terminated contract which has landed the country in a $170 million judgment debt will face consequences.

But reacting to the threats by the Attorney General, Mr Kofi Buah in his Facebook post called for a rather retrospective approach which includes a study of events leading to the termination of the contract and how the Government of Ghana defended the same in court.

According to the former Minister, such action will afford the state, the merit of putting blames where they belong as well as learn clear lessons going forward.

“How did this come about? The GPGC emergency power agreement was signed in July 2015, it had a cabinet and parliamentary approval. The termination of the agreement leading to the tribunal award took place in 2018 under the current government. This was after Ghana’s failure to properly defend the case in court.

“I have heard the Attorney General’s hasty threats of investigation and prosecution. It is important to fairly study the events leading to the termination and how as a country we defended this case in court. This will allow us as a country to lay the responsibility where it belongs and learn clear lessons from this,” he wrote on his Facebook page.

Background

The Government of Ghana (GoG) was ordered by a London-based United Nations Commission on International Trade Law tribunal to pay a contractually defined “early termination payment” of more than US$134.3 million plus interest and costs.

The agreement between the government and GPGC, an independent power producer, was terminated in 2018.

According to the London Court, the Government of Ghana failed to apply and set aside a January 26, 2021 decision of the London-based United Nations Commission on International Trade Law (UNCITRAL) Tribunal.

Mr Justice Butcher, in a ruling on Wednesday, June 8, refused to grant the Government of Ghana an extension to apply to set aside the award – adding that the state’s grounds for challenging it were “intrinsically weak”.

The government through its lawyer, Godfred Dame, had attempted to hide behind the 2020 general election and the COVID-19 pandemic as excuses for the delay, but their excuses were dismissed by the London court.

GPGC was represented before the court by Charles Kimmins QC and Mark Tushingham, where Ghana is said to have been too late to challenge the decision against it.

Ghana had used Khawar Qureshi QC of Serle Court and Volterra Fietta, having initially retained Omnia Strategy LLP. In the arbitration, GPGC used Three Crowns and Ghanaian firm, Kimathi & Partners, along with damages experts from FTI Consulting.

Ghana also had representation from the attorney general’s office and Amofa & Partners in Accra.

The three-member arbitration tribunal chaired by John Beechey, a former President of the International Criminal Court’s Court of Arbitration, and co-chaired by Prof Albert Fiadjoe, a Ghanaian academic, sided with the power producer and awarded almost US$170 million, including interest.

Out of the total, U$134.35 million represents the early termination payment claim, which itself is made up of US $69.36 million as an early termination fee, US$58.49 million for mobilisation costs, US$6.46 million as demobilisation cost and US$32,448 as preservation and maintenance cost.

The tribunal also awarded US$614,353.86 against the country as the cost of the tribunal, and a cost of US$3 million against Ghana, being the legal fees expended by the GPGC during the arbitration.

Major highlights of the tribunal’s decision included the fact that the Ahenkora Committee which recommended the termination of the contract did not have sufficient ground in concluding that the GPGC was entitled to only $US 18 million in early termination fees.

The tribunal, in dismissing Ghana’s case, delved into the basis for terminating the contract, stating that the evidence before it indicated that “GPGC did have a building permit for the Blue Ocean Site issued by the Kpone-Katamanso District Assembly on August 15, 2017.”

“GoG [The government] has not been able to adduce any statute or regulation, including the Energy Commission Act, which addresses the requirement for any such additional construction permit,” the Tribunal ruled.

“On the basis of the record as it now stands, it is apparent that even as Dr. Ahenkorah [Energy Commission Executive Secretary at the time] was putting up further hurdles over which he required GPGC to jump in pursuit of its provisional generation licence in November 2017, the Minister of Energy was about to seek the approval of the Ghanaian Parliament of a decision to terminate the EPA along with a number of other PPAs, based upon the Report of the PPA Committee chaired by Dr. Ahenkorah,” it said.

Under British law, the government had 28 days to challenge the tribunal’s decision. However, it went to sleep only to appear in court three days to the expiry of the deadline to ask for an extension.

Omnia Strategy LLP, a British law firm, made the case for an extension and asked for 56 days—twice the allowed grace period.

However, the court set March 8, 2021, for the Government to file processes to challenge the Tribunal’s decision in January. But again, the government took a long nap until April 1, 2021, before filing. This time, another British law firm, Volterra Fietta, had instructions from the government to begin the process.

The law firm, which tagged itself as the only dedicated public international law firm in the world, explained that the new Attorney General, Godfred Yeboah Dame, had only been sworn in on March 5, and the firm received the directive to represent Ghana 10 days later.

But ruling on the matter on June 8, 2021, the court had no sympathies. It said the excuses were unreasonable and “intrinsically weak”.

The presiding judge, Justice Butcher did not hold back.

The judge said the government’s delay was “significant and substantial” as its request for a second extension had come 38 days after the statutory deadline and 27 days after the first extension expired, the Global Arbitration Review (GAR) reported.

He noted that the large sum of money involved in the arbitration was not enough grounds for the appeal to take as long as it did.

“The fact that the Attorney General had not been sworn in until March 5 did not mean the government was unable to act in the meantime, the judge said.