….Over unpaid US$134 million judgement debt
Owners of the US$134 million judgement debt occasioned by family feud between President Nana Akufo-Addo’s nuclear family, his cousins and nephew, has gotten Trafigura’s Ghana Power Generation Company (GPGC) to threaten to further embarrass Ghana by seizing state assets in South Africa, if the debt remains unpaid.
GPGC, served notice to the government of Ghana, through the Minister of Finance, Dr Mohammed Amin Adam, that it has commenced the process to implement the arbitration in its favour, following the failure of the government to pay up its US$134 million judgment debt.
In a letter to the Minister for Finance, Trafigura, also indicated that in addition to the 16 banks with ties to the government of Ghana, it plans to subpoena US-based corporations affiliated with the government.
“Further to our letter of September 20, 2024, to which we have not yet received a response, we can confirm that we have today filed the relevant papers to commence enforcement of the arbitral award in South Africa. As a courtesy, we have enclosed at Annex 1 the filings with this letter as service on the government of Ghana through diplomatic channels may take some months.
“In addition to the 16 banks based in the United States that GPGC has subpoenaed (as evidenced in the attached at Annex 2), we plan to issue further subpoenas to US-based corporations with ties to the Government of Ghana later this week, with further action to follow,” part of the letter, which was signed by the Director of GPGC, Patrick Burke, reads.
The company, however, indicated that it would prefer not to implement the arbitral award against the government of Ghana.
It asked the government to settle the judgment within a week to prevent it from implementing the judgment of the court.
“We would nevertheless like to reiterate the message of our previous correspondence, that we would prefer not to take any further enforcement action and instead to resolve the matter amicably by fully executing the settlement agreement, as soon as possible, ideally within this week, and receiving payment in accordance with the agreed schedule,” it said.
One of Ghana’s prized properties in the United Kingdom (UK), the Regina House in London, was reportedly taken over by Trafigura after the government of Ghana failed to pay the $134 million judgment awarded against it for cancelling a power agreement by a UK court.
After Ghana terminated a power purchase deal with Ghana Power Generation Company (GPGC) on February 18, 2018, a UK tribunal found on January 26, 2021, in its final award that, Ghana, had broken its contractual duties.
According to Ghana, the contract was terminated, because the foreign power company did not fulfill certain contractual obligations.
The tribunal, however, disapproved and granted GPGC US$134,348,661 in damages, which were computed using the purchase agreement’s Early Termination Payment formula.
The award, includes compensation of GPGC’s arbitration fees and expenses in the amount of $3,309,877.74, with interest at three-month USD LIBOR, compounded quarterly, and an interest rate of six-month USD LIBOR + 6%.
Following fruitless attempts to obtain the outstanding payment from Ghana, GPGC filed a lawsuit on January 19, 2024, in the U.S. District Court, claiming recovery of the mounting debt under the Federal Arbitration Act’s Chapter 2 and the New York Convention.
In October last year, the High Commissioner of Ghana to the United Kingdom (UK), was reduced to tears over the attachment of the properties of the Government of Ghana in the country (UK) to be sold due to a failure to pay a US$140 million judgement debt owed GPGC, a subsidiary of international commodities company, Trafigura.
Papa Owusu-Ankomah, who served as Attorney General and Minister of Justice in the Kufuor administration, indicated that, so far, only one property of the Government of Ghana, has been attached, with the remaining being covered by diplomatic immunity.
The government is under intense pressure to cough up a US$140 million arbitral award, as Ghana’s assets in the UK, are targeted to defray a judgement debt owed Damian Duncan, a nephew of President Nana Akufo-Addo.
Also in the loop for causing the judgment debt, is the President’s powerful younger brother, Edward ”Bumpty” Akufo-Addo, who has been very active in the energy sector with Glencore Ghana and a couple of Russian multinational energy companies, including Lukoil, Gazprom and Rosneft Oil Company.
Speaking in an interview on JoyNews on October 23, 2023, Papa Owusu-Ankomah, added that he is ashamed that the situation has gotten to this point, because the Government of Ghana is cash-strapped at the moment and is unable to pay its debt.
“As far as I am aware, it’s only Regina House which is used for commercial purposes because it’s been rented by the Ghana International Bank, two other banks, and another commercial entity. That is the one that has been attached. All other properties are diplomatic properties and covered by immunity. I heard you talk about the High Commissioner’s residence, but that’s being used for diplomatic purposes; likewise, the other building you’re talking about, that’s the chancery, has not been attached. But I am sure the government is taking steps to liquidate that debt.
“It’s embarrassing; I am embarrassed as High Commissioner for this thing to appear on the internet and everything and be a subject matter of discussion in Ghana and in the Ghanaian media here. It’s serious, but even for those in private business, it gets to a stage where you have to prioritize payments when you don’t have access to credit and the monies being generated do not meet your obligations, you prioritise,” he said.
The high commission, however, clarified that the Regina House would not be sold soon because it is currently on lease, and the creditor made the move to put pressure on the government of Ghana.
He assured that the Ministry of Finance is working tirelessly to ensure that an agreement is reached with the creditor so that no property of Ghana is sold.
But behind the US$140 million judgement debt are the names of New Patriotic Party (NPP) stalwart, Fred Oware and Bumpty’s wife, with reports that the two had attempted to sell a parcel of land at East Legon to Damian Duncan, but the deal went bad, leading to a protracted police case in which Bumpty’s wife was arrested.
With Akufo-Addo winning power, the ruling family decided to teach Damian Duncan and Trafigura a bitter lesson by terminating the GPGC contract, which has added thermal power to Ghana’s national grid with the claims Ibrahim Mahama and Inusah Mahama alias “Energy”, two younger brothers of ex-President John Mahama, who are friends to Damian Duncan, were behind GPGC.
Damian Duncan’s mother, Mrs. Adelaide Duncan Olagbaju, is the President’s direct cousin. She is the Queen-mother of the Bekai Stool in Akwamufie with Nana Asaa Safoa II, as her stool name.
After the judgement debt award, the Ministry of Finance is reported to have reneged on its role to pay the award, a development that has culminated in the judgment creditor attaching the government’s assets in the UK.
Oil Trader, Trafigura, won a $140 million arbitral award against Ghana for the termination of a power deal by the state in 2021.
On January 26, 2021, GPGC (a majority-owned Trafigura entity) obtained a final award in its favour against the Government of Ghana in arbitral proceedings in England.
The award arose out of a written agreement for the installation and operation of two power plants, which Ghana (as the tribunal found) had unlawfully terminated prior to the expiry of the contractual term.
On November 4, 2021, the court granted GPGC leave, pursuant to section 66(1) of the Arbitration Act 1996, to enforce the award.
Service was effected on May 10, 2022. The deadline for challenging the Cockerill order was two months and 22 days after service – the two months having been added to the normal deadline. The deadline date was August 1, 2022. No challenge was made, however.
On March 17, 2022, GPGC issued applications for charging orders in relation to five London properties in which Ghana has a freehold or leasehold interest. On the same day, GPGC also issued an application for an alternative service.
On April 28, 2023, an order was made permitting alternative service upon Ghana by (i) posting to its London High Commission addresses; and (ii) emailing to a series of addresses listed in the order and its appendix.
GPGC served the ICOs, the order, and other related documents on May 5, 2023 by post and by email. In response to one of those emails, Stephenson Harwood (GPGC’s solicitors) received responses from Grace Mbrokoh-Ewoal, a legal counsel in the Ministry of Finance (whose email address was one of those listed in the appendix to the order).
In particular, Ms Mbrokoh-Ewoal, sent an email on May 5, 2023, specifically acknowledging receipt of the documents.
On May 24, 2023, Stephenson Harwood, received an email from White & Case law firm which runs gigs with Gabby Asare-Otchere Darko’s law firm; Africa Legal Associates, stating that it expected to receive instructions to act for Ghana and seeking to agree on a revised timetable in relation to GPGC’s applications.
On May 30, 2023 the hearing was subsequently vacated by consent. On June 23, 2023, Ghana issued an application to set aside the Knowles order.
The substantial basis for the application was that GPGC, had been obliged to serve not only the Cockerill order, but also the applications for the charging orders and the ICOs themselves by the diplomatic procedure.
On July 21, 2023, Ghana filed the objections it wished to raise in relation to making the ICOs final, and on August 2, 2023, GPGC, made an application for a receivership order in relation to Ghana’s leasehold interest in one of the London properties, Regina House.
The deal was signed according to this paper’s findings under Dr Kwabena Donkor, a former Minister for Power under President John Mahama, who doubles as the Member of Parliament (MP) for the Pru East constituency, in the Bono East Region.
GCGP Limited in a ruling secured in its favour from the International Court of Arbitration is to get $134 million and US$30 million in interest from the government of Ghana over the cancellation of the contract.
Boakye Agyarko, who was removed from his position in 2018, said on Oman FM on Tuesday [February 16, 2021] that he was in no way involved in the cancellation of the agreement and therefore cannot be held responsible for the judgement debt.
“I just realized that they had filed for arbitration on August 11, 2018. This was after I had left the ministry. I never knew they had gone for arbitration. I am told that the government presented itself at the arbitration. How would someone accuse me of cancelling the contract? I have not cancelled any contract, I don’t have the power nor the need or desire to cancel it. I am for what will help Ghana,” he said.
Meanwhile, the Institute for Energy Security (IES) has said the US$134 million judgment debt likely to hit the Government of Ghana is one that is damaging to the country’s reputation and finances.
Beatrice Annan who is a fellow at the IES told Citi Business News, “it means that the country will have to use taxpayers’ money in excess of US$134 million to pay the foreign entity, which is GPGC. It further means that, as a struggling economy as we are, the government will have to cough up another US$30 million to pay interest.”
“Beyond the financial damage that has been caused to the country, it also damages our reputation. So the international community will begin to look at Ghana with another eye and for us, we think that it is not a good brand to build as a nation,” she bemoaned.
A letter dated February 13, 2018, showed that the Attorney-General at the time, Gloria Akuffo, did not have input in the decision taken mainly between the Ministry of Energy and the Energy Commission.
A portion of Agyarko’s letter dated February 13, 2018, reads ”I refer to the emergency power agreement (Agreement) executed on June 3, 2015, between GPGC Limited (GPGC) and the Government of Ghana, represented by the erstwhile Ministry of Power, for the provision of fast-track 107 MW (ISO) installed capacity of power including the provision of operation, maintenance and technical services, the construction of a transmission line named autotransformer and the financing and insurance of the plant for a period of (4) years (Project).
Mr Agyarko’s letter entitled “re: emergency power purchase agreement between the government of Ghana and GPGC limited termination notice”, addressed to the managing director of GPGC Limited at Puma Energy, 7th Floor Airport Square Building adjacent to Holiday Inn, Accra.
He did not copy the Attorney General, but then the Deputy Ministers at the Energy Ministry, Dr. Mohammed Amin Adam and William Owuraku Aidoo. Also copied is the Chief Director of the Energy Ministry at the time. Interestingly, the letter did not mention a cabinet decision as the reason for the termination of the agreement and the day on which the decision was taken.
Mr Boakye had stated that “as you well know, this Agreement was executed during the power crisis as an Emergency Power Project. The term of the Agreement commences from the Signature Date until forty-eight (48) days after Full Commercial Operation Date”.
The then Minister of Energy noted that ”in accordance with the terms and conditions of the Agreement, the Agreement should have become effective on the 3rd August 2015 except the parties mutually extended the period for the fulfillment of the conditions Precedent to the effectiveness of the Agreement”.
He explained that ”following a review of the agreement Project, we note, the Parties have not mutually extended the period for the fulfillment of the Conditions Precedent”.
“We also note that, to date, GPGP has not reached financial close nor achieved Full Commercial Operation Date primarily because some of the pre-conditions (Conditions Subsequent) for the achievement of financial close and full commercial Operation Date have not been fulfilled, under the Agreement, Conditions Subsequent are to be fulfilled (30) days after the Effective Date”.
He cited Section 11 of the Energy Commission Act 1997, (Act 541) saying it” also provides that “Except as expressly exempted under this Act, a person shall not, unless authorized to do so by a license granted under this Act engage in the business or commercial activity for (a) the transmission, whole sole supply, distribution or sale of electricity or natural gas”.
“The Ministry has been informed by the Energy Commission that GPGC has still not obtained a licence from the Commission to engage in the business or commercial activity for the sale of electricity. GPGC therefore has no capacity to execute the EPA. Accordingly, the EPA is null and void for want of capacity”.
“Similarly, although it is a requirement to obtain Siting and Construction Permits from the Commission prior to construction and installation of a plant for the production and supply of energy, GPGC has commenced construction on the site without requisite Siting and Construction Permit. Accordingly, GPGC’s construction activities are illegal”.
“In view of the above, the Government of Ghana has taken a decision to terminate the Agreement effective the date of this letter due to GPGC’s breach of obligations under the Agreement”, he added.
It concluded that ”Kindly take note of Section 4(g) of the Agreement which provides that, “GoG may terminate this Agreement with immediate effect, by given written notice to GPGC if any Condition Subsequent has not been satisfied by GPGC or waived by GoG by the date falling thirty (30) days after the Effective Date (as such date may be extended by the mutual agreement of the Parties) provided that such non-fulfilment of the Conditions Subsequent by GPGC must be wholly attributable to the action or inaction of GPGC, and, if on the date of termination, any Condition Subsequent has not been satisfied by GPGC as a result for reasons attributable to GPGC, GPGC shall pay GoG the early termination Payment and other reasonable costs incurred by GoG within ninety (90) days of the issued, by GoG, of a termination notice”.
