Ghana has lost control of one of its prime commercial properties in London, the Regina House, due to a $134 million judgment debt owed to Trafigura’s Ghana Power Generation Company (GPGC). This property seizure is the result of Ghana’s failure to settle a long-standing debt, which arose from the termination of a power purchase agreement between the Ghanaian government and Trafigura.
The roots of this issue stretch back four years when Trafigura sought to recover the $134 million judgment awarded by a UK tribunal after Ghana abruptly canceled its power purchase agreement with GPGC in 2018. The tribunal found that Ghana had breached its contractual obligations and ruled in favor of GPGC, awarding the energy firm damages calculated based on an Early Termination Payment formula. Despite this ruling, Ghana only made partial payments, leaving a significant balance outstanding.
Faced with Ghana’s failure to fulfill the tribunal’s judgment, Trafigura escalated the matter by seeking enforcement through the U.S. legal system. The U.S. District Court subsequently awarded GPGC a mandatory interest on the default, bringing the total amount owed to $111.4 million. This escalating financial burden prompted Trafigura to take decisive action, leading to the seizure of Regina House.
The seizure of Regina House, a key commercial property owned by the Ghanaian government, has been a closely guarded secret. However, recent investigations by Joy News have confirmed that the building is now under the control of Trafigura. Ghana’s High Commission to the United Kingdom, Papa Owusu-Ankomah, confirmed the situation in an exclusive interview. He disclosed that until Ghana settles its debt or negotiates an arrangement with Trafigura, the company will maintain full control over the revenues generated by Regina House.
Owusu-Ankomah emphasized the urgent need for negotiations to prevent further financial complications, as the compounding interest on the debt continues to mount. He acknowledged that Ghana is currently facing significant financial challenges, which have complicated efforts to resolve the debt. “Until we pay in full or come into an arrangement to pay them,” he stated, Trafigura will retain control of the property.
The original dispute stems from Ghana’s termination of its power purchase agreement with GPGC on February 18, 2018. The Ghanaian government argued that GPGC had failed to meet certain contractual conditions, justifying the termination. However, the UK tribunal disagreed, concluding that Ghana had breached its obligations and awarding GPGC $134,348,661 in damages. This amount included an interest rate of six-month USD LIBOR plus 6%, as well as reimbursement of GPGC’s arbitration fees and expenses totaling $3,309,877.74.
Following the tribunal’s ruling, Ghana made only partial payments, amounting to $1,897,692.40, which left a substantial balance unpaid. In response, GPGC took the matter to the U.S. District Court in January 2024, seeking to recover the outstanding debt under the New York Convention and Chapter 2 of the Federal Arbitration Act. This move was a strategic effort by Trafigura to leverage international legal mechanisms to enforce the UK tribunal’s award.
Court documents reveal that Ghana was formally served with the U.S. court petition on January 23, 2024. The documents were delivered to Shirley Ayorkor Botchwey, Ghana’s Minister for Foreign Affairs and Regional Integration, and were confirmed as received in Ghana on January 29, 2024. Despite this, Ghana did not respond by the March 29, 2024 deadline and failed to appear in court to contest the case.
Chief Judge James E. Boasberg, who presided over the case, determined that the U.S. court had jurisdiction under the New York Convention, which mandates the recognition and enforcement of international arbitral awards. The judge noted that Ghana had waived its sovereign immunity and committed to international arbitration under the terms of the power purchase agreement with GPGC. This waiver was crucial in allowing the U.S. court to proceed with the case and ultimately enforce the judgment.
In his August 6, 2024 memorandum opinion, Judge Boasberg emphasized that the arbitral award between the non-U.S. parties arose from a commercial relationship governed by the New York Convention. The Convention requires member states to recognize and enforce such awards, regardless of the citizenship or location of the parties involved. While the judge did not grant pre-judgment interest to GPGC, he did award post-judgment interest at the rate specified in U.S. codes, further adding to Ghana’s financial burden.
