Ghana to pay $70m judgment debt to West Africa Gas Limited

3D illustration of "JUDGEMENT DEBT" title on legal document
Ghana will be paying another judgment debt to the West Africa Gas Limited to the tune of $70 million.

This follows the termination by the Claimant, West Africa Gas Limited of a Gas Sales Agreement on 9 October 2015 between WAGL and the Republic of Ghana. The company terminated the contract following claims that  there were obstructions by the government of Ghana which made it difficult for them to execute the contract.

Portions of the ruling said “In accordance with Article 28.1 of the LCIA Rules the LCIA Court has determined the costs of the arbitration (other than the legal costs of the parties) in the total sum of £ which is made up as follows: – Registration fee £1,750.00, LCIA Administrative charges £27,211.67, Tribunal’s fees and expenses £249,288.18, Total costs of arbitration £278,249.85

“Towards these costs, WAGL has paid £153,108.88 which includes the Registration fee, deposits lodged, interest accrued, and GoG has paid £125,140.97, which includes deposits lodged and interest accrued. Total deposits lodged by the parties therefore amount to £278,249.85 of which £278,249.85 has been applied to the costs of the arbitration as set out above. There is therefore no surplus to be refunded to the parties by the LCIA.

“110 Letter 30 April 2019.

“Unlike the Legal and Other Costs, where the issues as to allocation of costs relate to the degree of success, it was necessary for WAGL to commence this arbitration to recover the sums awarded. Thus the Tribunal concludes that liability for the full Arbitration costs should rest with GoG and accordingly WAGL is entitled to be reimbursed the Arbitration Costs it has paid in the sum of £153,108.88.”

This comes after the London-based United Nations Commission on International Trade Law tribunal has ordered Ghana to pay $170million to the Ghana Power Generation Company (GPGC

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This follows the termination of the contract between the government of Ghana and an independent power producer, GPGC in 2018.

This has resulted in accusation and counter accusations among officials of the present administration and the previous Mahama administration.

For instance, Former Power Minister Dr Kwabena Donkor told the Attorney General Godfred Yeboah Dame that the $170million judgment debt to the Ghana Power Generation Company (GPGC), was as a result of wrongful termination and not wrongful signing of the agreement.

The Pru East lawmaker told Dzifa Bampoh on the First Take on 3FM Wednesday June 23 that the agreement went through due process before it was signed.

Mr Dame had said the decision by the signatories to sign such an agreement was uninformed.

“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,” he said.

“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 Joy News.

Reacting to his comments, Dr Kwabena Donkor 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.

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“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.”

By Laud Nartey||Ghana