Singapore-based commodity trading company, Trafigura, has threatened to seize Ghana’s assets in the Republic of South Africa if the West African nation continues to delay in paying a US$134 million judgment awarded against Ghana for terminating a power purchase agreement with the company about four years ago.
As a result, the company has taken control over one of Ghana’s key commercial properties, Regina House, in London.
In a letter addressed to Ghana’s Finance Minister Dr Mohammed Amin dated September 23, 2024, which was leaked on social media, Trafigura expressed frustration over the government’s failure to settle the debt.
“Further to our letter on September 20, 2024, to which we have not yet received a response, we can confirm that we have today filled the relevant papers to commence the enforcement of the arbitral award in South Africa.
“In addition to the 16 banks based in United States that GPGC has subpoenad (as evidence in the attached at Annex 2), we plan to issue further subpoenas to US corporations with ties to the Government of Ghana, this week with further action to follow.
“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,” Patrick Burke, Managing Director of GPGC wrote to Dr. Mohammed Amin, Ghana’s Finance Minister.
However, this letter has not enthused the Government of Ghana, with the Finance Ministry expressing surprise at the release of the letter on social media.
In a release issued on Tuesday, the Finance Ministry wrote: “It has come to our attention that a letter received today, 24th September 2024, about our engagement with Trafigura is circulating in the media, creating the impression of the government’s inaction on a yet-to-be executed Settlement Agreement.
As it may have been noticed, the said letter references ongoing engagement on pathways towards settling the claims.”
“We have made the necessary arrangements to pay off the outstanding claims agreed with Trafigura after several rounds of negotiations. We are, therefore, surprised at the circulation of this letter on social media.
“The Government of Ghana remains committed to honouring its obligation under the Settlement Agreement with Trafigura with a view to bringing this matter to closure,” the Ministry of Finance said.
Background
The debt dates back to January 26, 2021, when a UK tribunal ruled that Ghana breached its contractual obligations by terminating a power purchase agreement with GPGC, a subsidiary of Trafigura in 2018.
The tribunal awarded GPGC $134 million in damages, including interest and reimbursement of arbitration fees.
In January 2024, GPGC filed a case in the U.S. District Court, seeking to recover the remaining debt under the New York Convention.
Ghana was served with the petition but failed to respond by the deadline.
The court, citing Ghana’s waiver of sovereign immunity and commitment to international arbitration, ruled in favour of GPGC.
The court decision added post-judgment interest to the financial burden on Ghana, further complicating the country’s efforts to resolve the debt.
Source: https://energynewsafrica.com