UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
GPGC LIMITED,
Petitioner,
Civil Action No. 24-169 (JEB)
v.
THE GOVERNMENT OF THE
REPUBLIC OF GHANA,
Respondent.
Afflicted by an energy crisis in 2015, the Republic of Ghana entered agreements with various companies to build new generating capacity. One of those agreements was with Petitioner GPGC Limited for the transportation, installation, and maintenance of two gas-turbine power plants in Ghana. This case arises from a subsequent contractual dispute between the parties that came to a head in the winter of 2018, launching this long-running saga. In January 2021, a three-person arbitration tribunal in the United Kingdom issued a final award concluding unanimously that Ghana had wrongfully repudiated the agreement. After Ghana sought in vain to challenge the award in English courts, it made a series of partial payments to GPGC. GPGC has filed this action to enforce the remainder of the award that is still owed under Chapter 2 of the Federal Arbitration Act, 9 U.S.C. § 201, et seq., which codifies the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Although Respondent received the Petition, notice of suit, and summons on January 29, 2024, it has never
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appeared. Petitioner now seeks default judgment. As confirmation of the award is appropriate, the Court will grant the Motion.
The underlying dispute arose out of a June 3, 2015, contract between Ghana and GPGC. See ECF No. 15 (Motion for Default Judgment) at 2 (citing ECF No. 1-2 (Final Award), ¶¶ 147–48). This contract, the so-called Emergency Purchase Agreement, see ECF No. 1-11 (EPA), stipulated that GPGC would dismantle two existing gas-turbine power plants in Italy, transport them to Ghana, install them, and operate and maintain them. Id. (citing EPA, §§ 6, 8; Final Award, ¶ 148). In return, GPGC expected to receive payments for a guaranteed term of four years. Id. (citing EPA, §§ 2(a), 11; Final Award, ¶ 147).
In the event of a breach by Ghana or a termination of the agreement contrary to its terms, the country was required to pay GPGC an “Early Termination Payment,” which would cover anticipated tolling charges for the first two years and would include “mobilization, and/or demobilization costs . . . and any other reasonably incurred cost by GPGC as a result of an Early Termination.” Id. at 3 (citing EPA, § 25(b)(i) and at 5). The contract also specified that any disputes would be settled by UNCITRAL arbitration in London under English law. Id. (citing EPA, §§ 28(f), (g)).
On July 23, 2015, Ghana’s Parliament ratified the contract, id. (citing Final Award, ¶ 160), one of the conditions precedent. See EPA § 3(a). But Ghana wavered over identifying a viable site for the power plants, another of the conditions precedent. See MDJ at 2–3. GPGC had, in the meantime, dismantled the two power plants in Italy and shipped them to Ghana. Id. at 3 (citations omitted). In the face of Ghana’s neglecting to designate a site, GPGC identified a location on its own and began installing the plants there instead. Id. (citations omitted). In
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December 2016, after Ghana’s general election, the new government, “believ[ing] that its predecessor had purchased too much power, . . . formed a ‘PPA Committee’ to review the various purchase agreements.” Id. at 4 (citing Final Award, ¶¶ 150–51). The PPA Committee recommended negotiating a termination of the EPA. Id. (citations omitted).
Thereafter, on February 18, 2018, the country terminated the EPA, claiming that GPGC had failed to meet certain contractual conditions. Id. (citation omitted). In response, GPGC served its own notice of termination on August 13, 2018. Id. (citation omitted). That same day, GPGC served a notice of arbitration. Id. (citation omitted). An arbitration panel in London, including a Ghanaian national whom Ghana chose as its party-appointed arbitrator, was assembled for lengthy pre-hearing proceedings and a five-day merits hearing from October 5 through 9, 2020. Id. (citations omitted). Ultimately, on January 26, 2021, the tribunal issued a Final Award finding that Ghana had not complied with its contractual obligations. The tribunal unanimously “concluded that Ghana had decided to terminate the EPA in an effort to save costs.” Id. at 5 (citing Final Award, ¶ 492).
It thus applied the Early Termination Payment formula in the EPA and awarded GPGC a total of $134,348,661 with an interest rate at the contractually specified rate of six-month USD LIBOR plus 6%, compounded monthly. Id. (citing Final Award, ¶¶ 535, 545). It also ordered Ghana to reimburse GPGC’s fees and expenses for arbitration, totaling $3,309,877.74 with an interest rate of three-month USD LIBOR, compounded quarterly. Id. (citing Final Award, ¶¶ 551–54, 556).
Ghana sought and obtained one extension beyond the 28-day timeframe to challenge the Award in English courts. Id. at 6. After missing that deadline, Respondent filed a second extension request, which was unsuccessful because the court concluded that this was “one of the
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relatively infrequently encountered cases in which the court can see . . . that the grounds of the proposed challenge are intrinsically weak.” Id. (citing ECF No. 1-16 (Queen’s Bench Case No. 2021-94), ¶ 30). Ghana thereafter made a series of partial payments summing up to only $1,897,692.40 — all that GPGC has received on the contract to date. Id. (citations omitted). The total amount remaining, with interest, is $111,493,828.92. Id. at 7 (citation omitted).
GPGC filed this action on January 19, 2024, to recognize and enforce the remainder of its Award under the New York Convention and Chapter 2 of the Federal Arbitration Act. Id. (citation omitted). On January 23, 2024, it served Ghana — pursuant to Section 1608(a)(3) of the Foreign Sovereign Immunities Act — by requesting that the Clerk of Court dispatch copies of the Petition, notice of suit, and summons to the Honorable Shirley Ayorkor Botchwey, Ghana’s Minister for Foreign Affairs and Regional Integration, in Accra, Ghana. Id. (citing ECF No. 8 (Kry Service Decl.), ¶ 2). The Clerk utilized DHL, which “delivered the materials in Ghana on January 29, 2024, and furnished a signed confirmation of receipt.” Id. (citing Kry Service Decl., ¶ 4); see also ECF No. 8-3 (DHL Statement). Ghana missed the March 29, 2024, deadline for its response to the Petition and has never appeared in the action. See MDJ at 7. On April 24, 2024, the Clerk entered default. See ECF No. 10 (Clerk’s Entry of Default). Petitioner now moves for default judgment. Although Respondent has filed no answer to the Petition, the Court nonetheless proceeds with a full analysis.
Default judgment may be ordinarily entered where a defendant is “totally unresponsive,” and its default is plainly willful, as reflected by its failure to respond to the summons and
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complaint, the entry of default, or the motion for default judgment. See Gutierrez v. Berg Contracting Inc., 2000 WL 331721, at *1 (D.D.C. Mar. 20, 2000) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)) (internal quotation omitted). In the “‘absence of any request to set aside the default or suggestion by the defendant that it has a meritorious defense,’ it is clear that the standard for default judgment has been satisfied.” Int’l Painters & Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531 F. Supp. 2d 56, 57 (D.D.C. 2008). Nevertheless, “[m]odern courts are . . . reluctant to enter and enforce judgments unwarranted by the facts,” Jackson, 636 F.2d at 835, and “a district court may still deny an application for default judgment where the allegations of the complaint, even if true, are legally insufficient to make out a claim.” Gutierrez, 2000 WL 331721, at *2 (citing Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980)).
Under the FSIA, moreover, there is a heightened standard for default judgment because the Act “codifies a baseline principle of immunity for foreign states.” Turkiye Halk Bankasi A.S. v. United States, 598 U.S. 264, 272 (2023); Weinstein v. Islamic Republic of Iran, 175 F. Supp. 2d 13, 19–20 (D.D.C. 2001) (“[D]efault judgments under the FSIA require additional findings than [are required] in the case of ordinary default judgments.”). Section 1608(e) requires that “the claimant establish[] his claim or right to relief by evidence satisfactory to the court.” 28 U.S.C. § 1608(e). Regardless of whether a foreign state makes an appearance, the court must determine that an exception to immunity applies and that the plaintiff has a sufficient legal and factual basis for his claims. See Jerez v. Republic of Cuba, 777 F. Supp. 2d 6, 18–19 (D.D.C. 2011). In making this determination, the court has “a duty to scrutinize plaintiff’s
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allegations” and should not “unquestioningly accept a complaint’s unsupported allegations as true.” Reed v. Islamic Republic of Iran, 845 F. Supp. 2d 204, 211 (D.D.C. 2012).
That said, judicial review of arbitral awards is “extremely limited.” Kurke v. Oscar Gruss & Son, Inc., 454 F.3d 350, 354 (D.C. Cir. 2006) (quoting Teamsters Local Union No. 61 v. United Parcel Serv., Inc., 272 F.3d 600, 604 (D.C.Cir.2001)). “Courts . . . do not sit to hear claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts.” United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38 (1987). A court is thus “not authorized to reconsider the merits of an award even though the parties may allege that the award rests on errors of fact or on misinterpretation of the contract.” Id. at 36; see United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 599 (1960) (holding award should not be rejected simply because court’s “interpretation of the contract is different from [the arbitrator’s]”).
A federal court must instead confirm an award even if it “is convinced [the arbitrator] committed serious error.” Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001) (quoting Eastern Associated Coal Corp. v. Mine Workers, 531 U.S. 57, 62 (2000)). An award, in other words, is legitimate so long as the “arbitrator is even arguably construing or applying the contract and acting within the scope of his authority.” Id. (quoting Mine Workers, 531 U.S. at 62). “It is only when the arbitrator strays from interpretation and application of the agreement and effectively dispense[s] his own brand of industrial justice that his decision may be unenforceable.” Id. (quoting Enter. Wheel, 363 U.S. at 597) (quotation marks omitted).
The Court first considers its jurisdiction to entertain the Petition. It next addresses grounds for non-enforcement and the proper calculation of the Award.
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There are two prerequisites for the Court’s subject-matter jurisdiction here. “First, there must be a basis upon which a court in the United States may enforce a foreign arbitral award; and second, [Respondent] must not enjoy sovereign immunity from such an enforcement action.” Diag Human, S.E. v. Czech Republic—Ministry of Health, 824 F.3d 131, 134 (D.C. Cir. 2016) (quoting Creighton Ltd. v. Gov’t of the State of Qatar, 181 F.3d 118, 121 (D.C. Cir. 1999)).
As to the first, the Federal Arbitration Act codifies the New York Convention into U.S. law. See 9 U.S.C. §§ 201–08. It provides that “[a]n action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts . . . shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.” Id. § 203.
An arbitral award between two non-U.S. parties, like the one at issue here, “falls under the Convention” if it “arise[s] out of a legal relationship, whether contractual or not, which is considered as commercial.” Id. § 202. There is no doubt that the Award here arises out of such a relationship — Ghana contracted for the installation and operation of power-generation plants. And under the Convention, “the critical element is the place of the award: if that place is in the territory of a party to the Convention, all other Convention states are required to recognize and enforce the award, regardless of the citizenship or domicile of the parties to the arbitration.” Creighton Ltd., 181 F.3d at 121 (quoting Restatement (Third) of Foreign Relations Law § 387 cmt. b (1987)). The United Kingdom acceded to the New York Convention in 1975. See Contracting States, New York Convention, https://perma.cc/F65D-957J. As another Convention state, the United States is required to recognize this Award. See, e.g., Archirodon Construction
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(Overseas) Company Ltd. v. General Company for Ports of Iraq, 2024 WL 341066, at *6 (D.D.C. Jan. 30, 2024) (reaching same conclusion based on similar facts).
As to the second, the FSIA grants jurisdiction over “any nonjury civil action against a foreign state . . . as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity.” 28 U.S.C. § 1330(a). Petitioner correctly contends that two exceptions to Ghana’s immunity clearly apply.
First, Respondent expressly waived its sovereign immunity in the EPA. See 28 U.S.C. § 1605(a)(1) (excepting from FSIA protection any “foreign state [that] has waived its immunity either explicitly or by implication”). As Petitioner identifies, see MDJ at 8, Section 26(a) of the EPA reads:
To the extent that the GoG [Government of Ghana] may, in any jurisdiction, claim for itself or its assets immunity from suit, execution (whether in aid of execution, before judgment or otherwise) or other legal process, the GoG agrees not to claim, and hereby waives, such immunity to the fullest extent permitted by the laws of that jurisdiction
(emphasis added). The D.C. Circuit has previously enforced contractual waivers of immunity when a foreign sovereign has “clearly and unambiguously done so,” World Wide Mins., Ltd. v. Republic of Kazakhstan, 296 F.3d 1154, 1162 (D.C. Cir. 2002), which is unquestionably the case here.
In addition, the Court has subject-matter jurisdiction given that this matter falls within the FSIA’s exception for arbitral enforcement. Under 28 U.S.C. § 1605(a)(6), there is no sovereign immunity in cases to confirm arbitral awards where (1) “a foreign state has agreed to arbitrate,” (2) “there is an award based on that agreement,” and (2) “the award is governed by a treaty signed by the United States calling for the recognition and enforcement of arbitral awards.” Chevron Corp. v. Ecuador, 795 F.3d 200, 204 (D.C. Cir. 2015).
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All three conditions are easily ticked off here. Ghana expressly agreed to arbitrate, first in the EPA itself, see EPA §28(f)(xv) (“[A]ny dispute or disagreement . . . shall be settled finally by ad-hoc arbitration to be conducted in accordance with the UNCITRAL Rules.”), and again by participating in the 2018–20 arbitration. The arbitration was conducted in accordance with the EPA’s prescription and an award was issued. Finally, the D.C. Circuit has “recognized that ‘the New York Convention is exactly the sort of treaty Congress intended to include in the arbitration exception.’” Process and Industrial Developments Ltd. v. Federal Republic of Nigeria, 27 F.4th 771, 776 (D.C. Cir. 2022) (some internal quotation marks omitted) (quoting Creighton Ltd., 181 F.3d at 123–24).
The FSIA authorizes the exercise of personal jurisdiction over a respondent whenever subject-matter jurisdiction exists under 28 U.S.C. § 1330(a) and service of process has been made in accordance with Section 1608. See 28 U.S.C. § 1330(b); Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1548 n.11 (D.C. Cir. 1987) (explaining that under FSIA “subject matter jurisdiction plus service of process equals personal jurisdiction”) (quoting Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300, 308 (2d Cir. 1981)). To facilitate service of process, the FSIA sets forth various ways service may be effected on different types of foreign entities.
Section 1608(a) lists four methods, in ranked order, specific to serving “a foreign state or political subdivision of a foreign state.” GPGC notes that “the first two methods are not available here,” given that there is no “special arrangement for service” between GPGC and Ghana in this context and that Ghana is not a party to the Hague Service Convention or any other “applicable international convention on service of judicial documents,” so it therefore properly
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served Ghana under 1608(a)(3). See MDJ at 11 (citing 28 U.S.C. §§ 1608(a)(1)–(2); ECF No. 15-5 (Service Status Table)). That provision requires service “by sending a copy of the summons and complaint and a notice of suit, together with a translation of each into the official language of the foreign state, by any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the head of the ministry of foreign affairs of the foreign state concerned.” 28 U.S.C. § 1608(a)(3). GPGC arranged for the Clerk of Court to send copies of the Petition, summons, and notice of suit to Ghana’s Minister for Foreign Affairs and Regional Integration in Accra — in English, the nation’s official language. See MDJ at 11 (citing ECF No. 15-6 (Ghana: CIA World Factbook)). It also obtained a signed confirmation of receipt. Id. (citations omitted). Other courts have previously found such method of DHL service sufficient. See, e.g., Doe v. Democratic People’s Republic of Korea Ministry of Foreign Affairs Jungsong-Dong, 414 F. Supp. 3d 109, 125 (D.D.C. 2019) (finding that “deliver[y] using DHL International . . . satisfies § 1608(a)(3)”); Karcher v. Islamic Republic of Iran, 249 F. Supp. 3d 557, 560 (D.D.C. 2017) (holding that Plaintiffs “have complied with the dictates of [§] 1608(a)(3) as they . . . dispatch[ed] . . . the summons, complaint, and a notice of suit . . . by DHL, which is a form of mail requiring a signed receipt”); see also MDJ at 11-12 n.2.
Because this Court has subject-matter jurisdiction and proper service was executed, personal jurisdiction is thus appropriate, and we may move to the merits of Award enforcement.
As discussed above, see pp. 7–8, supra, the New York Convention applies to the Award, which was granted following United Kingdom-based arbitration proceedings arising out of a commercial legal dispute. Article III of the Convention thus requires this Court to “recognize
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[the] arbitral award[] as binding and enforce [it] . . . under the conditions laid down in the following articles.” New York Convention Art. III. The minimal procedural requirements for enforcement are articulated in Article IV, see id., and each has been met: GPGC has submitted to this Court certified copies of the original Award and the original agreement. See Final Award; EPA.
Where those threshold requirements are satisfied, a court “may refuse to enforce the award only on the grounds explicitly set forth in Article V of the Convention.” TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 935 (D.C. Cir. 2007) (citation omitted). The Article provides that recognition and enforcement may be refused either at Ghana’s request and upon proof of one of five specific deficiencies under Art. V.1 or sua sponte under Art. V.2. See New York Convention Art. V; 9 U.S.C. § 207. As Respondent — having failed to appear in this matter — offers no grounds for nonenforcement under Article V.1, the Court agrees with Petitioner that it poses no obstacle here. See TMR Energy Ltd. V State Property Fund of Ukraine, 411 F.3d 296, 304 (D.C. Cir. 2005) (stating that Article V of New York Convention “assigns the burden of persuasion to the party opposing enforcement”); Archirodon Construction (Overseas) Company Ltd., 2024 WL 341066, at *6 (finding no Article V grounds for refusal when Respondents never appeared).
As Petitioner observes, “Article V.2 permits a court to refuse enforcement sua sponte even if the respondent does not appear.” MDJ at 15; see Gebre LLC v. Kyrgyz Republic, 2022 WL 2132481, at *8 (D.D.C. June 14, 2022) (“Section 2 of Article V provides two additional grounds for denying recognition of an arbitral award, regardless of whether respondent asserts them or not.”). These two grounds are as follows:
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(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to the public policy of that country.
New York Convention Art. V, sec. 2. But neither is of concern. A commercial contract dispute is arbitrable under United States law, and there are no public-policy concerns here in recognizing and enforcing the Award.
Finally, Petitioner requests that “[w]hen entering judgment, the Court should include interest through the date of judgment.” MDJ at 16. “[W]hether to award prejudgment interest falls within the district court’s discretion.” Cont’l Transfert Technique Ltd. v. Fed. Gov’t of Nigeria, 932 F. Supp. 2d 153, 163 (D.D.C. 2013) (citation omitted). Considering “the widely accepted, remedial purpose of prejudgment interest — which is to compensate the injured party for the loss of the use of money he would otherwise have had” — courts have recognized that “a presumption exists in favor of such interest.” Id. (cleaned up). Therefore, “absent any reason to the contrary, prejudgment interest should normally be awarded when damages have been liquidated by an international arbitral award.” Id. at 163–64 (cleaned up).
In keeping with the logic that “a decision to award prejudgment interest ‘must be exercised in a manner consistent with the underlying arbitration award,’” LLC SPC Stileks v. Republic of Moldova, 985 F.3d 871, 881 (D.C. Cir. 2021) (citation omitted), the D.C. Circuit has previously granted prejudgment interest at the same rate as pre-award interest when no contrary reason exists. Id. In this case, the arbitration tribunal awarded interest on the Early Termination Payment at the contractually specified six-month LIBOR plus 6% interest rate, compounded monthly, starting on November 12, 2018, as well as interest on attorney fees at the three-month USD LIBOR rate, compounded quarterly. See MDJ at 17 (citing Final Award, ¶¶ 535–36, 545).
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Seeing no reason not to follow suit, the Court will allot prejudgment interest to Petitioner at the same rates.
In a footnote, Petitioner also notes that “[a]fter the Court enters judgment enforcing the Award, post-judgment interest will accrue at the statutory rate prescribed by 28 U.S.C. § 1961.” MDJ at 17 n.3. Post-judgment interest is the “interest that accrues following this Court’s judgment enforcing the award.” Tenaris, S.A. v. Bolivarian Republic of Venezuela, 2021 WL 1177996, at *2 (D.D.C. 2021).
Courts in this district have consistently awarded post-judgment interest in civil judgments confirming foreign arbitral awards. See, e.g., Global Distressed Alpha Fund I LP v. Red Sea Flour Mills Co. Ltd., 725 F. Supp. 2d 198, 203 (D.D.C. 2010). Congress set forth a federal rate for post-judgment interest in 28 U.S.C. § 1961(a): “[I]nterest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment.” This rate is “mandatory,” unless the parties agree to a different rate by “clear, unambiguous, and unequivocal language” or the arbitral award itself “explicitly state[s] the interest rate to be applied ‘post-judgment.’” OI European Grp. B.V. v. Bolivarian Republic of Venezuela, 2019 WL 2185040, at *6 (D.D.C. 2019); Tenaris, 2021 WL 1177996, at * 2 (citations omitted). As neither of these exceptions applies here, the Court will award Petitioner post-judgment interest at the rate set forth in 28 U.S.C. § 1961(a).
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For the foregoing reasons, the Court will issue a contemporaneous Order granting the Motion for Default Judgment and awarding $111,493,828.92. Post-judgment interest shall accrue as provided by 28 U.S.C. § 1961. A separate Order so stating will issue this day.
Date: August 6, 2024
/s/ James E. Boasberg
JAMES E. BOASBERG
Chief Judge
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