It is emerging that, Ghana is walking towards paying over US$200 million to Ghana Power Generation Company (GPGC) as the judgment debt slapped on the country by the London-based United Nations Commission on International Trade Law (UNCITRAL) Tribunal, as the Akufo-Addo government flip-flops on the matter, having failed to set aside the January 26, 2021 decision.
The Herald’s investigations into the matter, have revealed that government can compromise the judgment, asking it to pay the $170 million by getting GCPC which according to insiders has its power plant rusting away at Kpone near Tema by getting it to quickly start supplying the electricity and getting paid for it as being done with Asogli, Karpower and others.
This paper is informed that, the GCPC facility at the time of the unlawful termination of the agreement in 2018, was 90 to 95 percent complete, and rather than paying the judgment debt, the Akufo-Addo government, must quickly go into negotiation with the company which has a Ghanaian and Italian background.
According to the legal experts, offering to pay a little of the money by way of commitment, while the rest of the judgment is compromised by getting the company to start supplying the country electricity with its 107 megawatts General Electric Generators it would have supplied, had the agreement not been unlawfully terminated, is a more reasonable approach to the matter than the belligerent attitude adopted by the Attorney General, Godfred Yeboah Dame and dismissed Energy Minister, Boakye Agyarko, who terminated the contract.
Ghana’s liability as part of the judgment is growing by the day as result of a 6percent monthly interest slapped on the country as long as the payment delays.
This is because the Tribunal agreed with “GPGC that it is entitled to pre-award interest on the full value of the Early Termination Payment, accruing daily and compounded monthly, at the rate of LIBOR for six-month US dollar deposits plus six per cent (6%).572 536. As to the date due for payment – on the basis of the fact that:
Clause 25(b)(i) of the EPA provides that the Early Termination Payment claimed by GPGC was due “within ninety (90) days after issuing of the termination notice by GPGC”; 573 and the Cl. Termination Notice is dated 13 August 2018, the Early Termination Payment was due by 11 November 2018 and interest started to accrue from 12 November 2018.574 GPGC maintains that the pre-award interest on the full value of the Early Termination Payment that it claims through to the date of the Cl. Reply (i.e., 13 March 2020) stands at US$ 17,074,403.575 537″.
It also agreed with “GPGC states that, to the extent that GoG does not immediately satisfy the sum(s) payable under any Award eventually issued by this Tribunal, GPGC is also entitled to post-award interest accruing from the date of the Tribunal’s Award until payment is made in full under Article 49(4) of the English Arbitration Act 1996.
“GPGC seeks post-award interest on all amounts (including pre-award interest and costs) awarded to GPGC, accruing daily and compounded monthly, at the rate of LIBOR for six-month US dollar deposits plus six per cent (6%) from the date of the award until payment.576 538”.
“With specific reference to the costs incurred by GPGC in the arbitration, GPGC considers that these costs constitute an amount “due from GoG to GPGC under this Agreement” – specifically, under Clause 28 of the EPA. Therefore, GPGC claims post-award interest on any costs awarded by the Tribunal until full payment thereof, at the same rate as that which is to be applied to the other components of the compensation which they claim”.
Meanwhile, a private legal practitioner Bobby Banson, has explained that the government is going to pay interest on the 170 million and also the legal fees the company paid to its lawyers to handle the case.
This, he said, will shoot up the amount to over 200 million dollars.
Sharing his views on the cancellation of the contract which led to the judgment debt, Mr Banson told host Abena Tabi on the Key Points on TV3 Saturday, said “the only reason they gave is because of excess capacity and now, somebody turns around and says that beyond that, I am giving the advice that terminate the contract because they have not met conditions precedent.
“I am worried particularly because we just went to the market to borrow 200million to set up a bank.
“This judgement debt is not even $170 million, if you add the interest, you add the legal fees, it is in excess of 200 million and we will pay.
“We can use that money to set up another bank. So we go for a loan to pay a debt.”
Meanwhile, a former Minister of Power, Dr Kwabena Donkor, has said the emergency power agreement went to cabinet and parliament for approval.
He told Dzifa Bampoh on the First Take on 3FM last Wednesday June 23 that the agreement met all the constitutional requirements hence the $170million judgement awarded against the government of Ghana for the termination.
Mr Donkor was reacting to a comment by Attorney General Godfred Dame that the decision by the signatories to sign such an agreement was uninformed.
Gofred Dame had said in relation to the judgement debt that “The fundamental question that we asked is why the agreement was entered into in the first place? Why did John Jinapor and his former boss execute the signatory of this agreement and afterwards set up a committee to review those agreements?
“It is because you yourself had realised that this was going to result in excess capacity.
“Indeed, the cost was very, very monumental. As per the report of the PPA Committee, if all the agreements signed by John Jinapor and his former boss had been allowed to run, each year, the nation was going to be exposed to payment to the sum of $586 million.
“Cumulatively, between 2013 and 2018 the nation was going to pay as much as $1.76 billion,” he told reporters.
Reacting to his comments, Dr Kwabena Donkor who is lawmaker for Pru East told Dzifa that “the awards was given for wrongful termination, not for wrongful signing. I am therefore surprised that the Attorney General does not deem it fit to confirm that whoever terminated will also be referred to the CID.
“The Ghana Power Generation Company (GPGC) was sent to cabinet, it had cabinet approval. Indeed, the Secretary to Cabinet wrote to Parliament on the 3rd of July 2015, and parliament approved the agreement.
“It went through the constitutional process set out for these agreements. This agreement had the lowest tariffs of all the emergency power purchasing agreements. It had the shortest duration, four years and that agreement did not require any financial security from the state of Ghana and therefore it was one of the agreements negotiated.”
State attorneys, including Helen Akpene Awo Ziwu, Anna Pearl Akiwumi Siriboe and Grace Oppong Dolphy in Accra, were also mentioned in the case as having failed to beat a 28-day deadline.
However, the State Attorneys together with Godfred Yeboah Dame, who took over from Gloria Afua Akuffo, went sleeping on the job, leading to a delay in contesting the judgment debt.
Interestingly, Godfred Yeboah Dame has rather threatened to send the police CID after Jinapor and Dr. Kwabena Donkor.
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 $US18 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 license 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.