[Page 1]
UNITED STATES DISTRICT COURT
DISTRICT OF COLUMBIA
GPGC LIMITED
One Airport Square Building
7th Floor
Accra, Ghana
Petitioner,
v.
THE GOVERNMENT OF THE
REPUBLIC OF GHANA
Ministry of Foreign Affairs
and Regional Integration
Flat 5 Agostinho Neto Rd.
Accra, Ghana
Respondent.
No. _______________
Petitioner GPGC Limited, by and through its attorneys MoloLamken LLP, respectfully submits this petition to enforce, recognize, and confirm a foreign arbitral award against respondent The Government of the Republic of Ghana.
1. This is an arbitral enforcement proceeding under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517 (the “New York Convention”) and Chapter 2 of the Federal Arbitration Act, 9 U.S.C. §§ 201 et seq. Petitioner GPGC Limited (“GPGC”) seeks to enforce an arbitral award in its favor against the Government of the Republic of Ghana (“Ghana”). The award was rendered in an arbitration under the 2013 Arbitration Rules of the United Nations Commission on International Trade Law
[Page 2]
administered by the Permanent Court of Arbitration, captioned GPGC Ltd. v. Government of the Republic of Ghana, PCA Case No. 2019-05.
2. The arbitral tribunal issued its Final Award on January 26, 2021 (the “Award”). A duly certified copy of the Award is attached as Exhibit A to the accompanying Declaration of Robert K. Kry. The Award ordered Ghana to pay USD $134,348,661 in damages and USD $3,309,877.74 in costs, plus interest on both amounts.
3. The arbitration arose out of an Emergency Purchase Agreement between Ghana and GPGC dated June 3, 2015 (the “EPA”). A duly certified copy of the EPA is attached as Exhibit A to the accompanying Declaration of Abdul Baasit Aziz Bamba. Section 28(f)(xv) of the EPA contains an arbitration clause by which the parties agreed to settle disputes by arbitration under the UNCITRAL Rules.
4. Ghana has made a few partial payments toward the Award, but has failed to pay the full amount due. As of January 19, 2024, the total amount owing with interest is USD $128,657,880.98. GPGC therefore brings this petition to enforce the Award pursuant to the New York Convention and the Federal Arbitration Act.
5. Petitioner GPGC Limited (“GPGC”) is a company organized under the laws of Ghana with its registered address at One Airport Square Building, 7th Floor, Accra, Ghana. GPGC is a majority-owned indirect subsidiary of Trafigura Group Pte. Ltd., a commodity supplier and supply chain manager with operations around the world.
6. Respondent The Government of the Republic of Ghana (“Ghana”) is a foreign state within the meaning of the Foreign Sovereign Immunities Act, 28 U.S.C. § 1603(a).
[Page 3]
7. This Court has subject matter jurisdiction over this petition to enforce a foreign arbitral award against a foreign sovereign pursuant to 28 U.S.C. § 1330(a) and 9 U.S.C. § 203.
8. Ghana is not entitled to sovereign immunity in this proceeding because it waived its immunity in the Emergency Purchase Agreement. Specifically, Section 26 states:
26. WAIVER OF IMMUNITY
a. To the extent that the GoG [i.e. 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, intending in particular, but without limiting the generality of the foregoing, that this waiver shall apply in any proceedings occurring in the Republic of Ghana.
b. The above waiver shall not apply to GoG's (i) defence-related aircraft, (ii) defence-related naval vessels, (iii) other defence-related assets, (iv) diplomatic assets or consular assets or (v) assets that cannot be used as collateral under the Petroleum Revenue Management Act, 2011 (Act 815) of the Republic of Ghana (the "Protected Assets").
EPA §26 (emphasis added). Accordingly, this case falls within the Foreign Sovereign Immunities Act’s exception for express waivers, 28 U.S.C. § 1605(a)(1). See Gulf Res. Am., Inc. v. Republic of Congo, 370 F.3d 65, 71-74 (D.C. Cir. 2004).
9. Ghana also is not entitled to sovereign immunity in this proceeding because this is an action to enforce a foreign arbitral award governed by the New York Convention, a treaty providing for the recognition and enforcement of arbitral awards to which the United States is a party. Accordingly, this matter falls within the Foreign Sovereign Immunities Act’s exception for arbitral enforcement, 28 U.S.C. § 1605(a)(6). See Process & Indus. Devs. Ltd. v. Federal Republic of Nigeria, 27 F.4th 771, 776 (D.C. Cir. 2022).
[Page 4]
10. This Court has personal jurisdiction over Ghana pursuant to 28 U.S.C. § 1330(b) because Ghana is a foreign sovereign, it is not entitled to immunity for the reasons above, and it will be duly served as required by the Foreign Sovereign Immunities Act, 28 U.S.C. § 1608(a).
11. Venue is proper in this district under 28 U.S.C. § 1391(f)(4) and 9 U.S.C. § 204.
12. This dispute arises out of an Emergency Purchase Agreement (“EPA”) by which GPGC agreed to relocate, install, and operate two gas turbine power plants to meet the energy needs of the Republic of Ghana.
13. By early 2015, Ghana faced an energy supply crisis, with demand outstripping domestic supply. Award ¶147. Ghana responded by entering into agreements with various companies to build new generating capacity. Award ¶148.
14. One of those companies was GPGC. In February 2015, Ghana and GPGC began negotiating to relocate two existing gas turbine power plants from Italy to Ghana that would be capable of producing up to 107 megawatts in emergency power. Award ¶147.
15. On June 3, 2015, Ghana and GPGC entered into the Emergency Purchase Agreement. Award ¶148. That agreement required GPGC to dismantle the two power plants, transport them to Ghana, install them, and operate and maintain them, all at its own expense. EPA §§ 6, 8; Award ¶148. In return, GPGC would earn revenues from the energy sales for a guaranteed term of four years. EPA §2(a); Award ¶147.
16. Section 3 of the EPA required each party to satisfy certain conditions precedent. Ghana, for its part, was required to obtain parliamentary ratification for the agreement, to obtain parliamentary approval for certain tax exemptions, to inspect and approve the power plants, and to provide “Unimpeded Access to a Site” where the power plants would be installed. EPA
[Page 5]
§3(a). GPGC, meanwhile, was required to test natural gas samples, approve the suitability of the site that Ghana designated, and provide maintenance records. Id. Each party was required to satisfy its conditions precedent within 30 days of execution, but if a party failed to do so, the other party could choose to extend that deadline. EPA §3(c).
17. Section 4 required each party to satisfy certain conditions subsequent. Ghana was required to provide fuel samples, to provide evidence of the tax exemptions, and to provide evidence of parliamentary approval. EPA §4(c). GPGC was required, among other things, to acquire a power generation license from Ghana's Energy Commission and to enter into a connection agreement with Ghana's electric grid operator and a water agreement with Ghana's water utility. EPA § 4(a). The contract imposed a broad duty of cooperation: “Each Party, upon the request of the other Party, shall use best endeavours to assist the other Party in satisfying each Condition Subsequent for which the other Party is primarily responsible under Clause 4.” EPA §4(d). Either party could terminate the agreement for the other party's failure to achieve a condition subsequent within 30 days of satisfaction of all conditions precedent, but only if the failure was “wholly attributable to the action or inaction” of the other party. EPA §4(f)-(g).
18. Section 25(b) states that, if Ghana purported to terminate the agreement contrary to its terms, or if GPGC terminated the agreement due to Ghana's breach, Ghana would pay GPGC an “Early Termination Payment” in an amount equal to “[a] Capital Recovery Charge multiplied with the amount of energy the GPGC Equipment would have produced . . . for the remaining Term . . . up to a maximum of twenty-four (24) months.” EPA §25(b)(i). The Early Termination Payment would also include “mobilization, and/or demobilization costs . . . and any other reasonably incurred cost by GPGC as a result of an Early Termination.” EPA at 5.
19. Section 28(e) contains a general Ghanaian choice of law clause. EPA §28(e).
[Page 6]
20. Section 28(f) contains an arbitration clause that provides for UNCITRAL arbitration in London pursuant to English law:
xv. Where any dispute or disagreement, not being an Invoice Dispute, arising out [of] or in connection with this Agreement cannot be settled [] by negotiation, then the dispute shall be settled finally by ad-hoc arbitration to be conducted in accordance with the UNCITRAL Rules in effect on the date of the institution of arbitration by either Party.
xvi. The matter shall be heard and decided, and awards rendered by a panel of three arbitrators (the “Arbitration Panel”). GPGC and the GoG shall each select one arbitrator and those two arbitrators shall select a third arbitrator; provided, however, that in the event the two arbitrators cannot agree on a third arbitrator, the Secretary-General of the Permanent Court of Arbitration shall select the third member being an individual with substantial experience in the power industry. The venue and seat for the Arbitration shall be London, England and the law of the arbitration shall be the English law.
xvii. In arriving at their decision, the arbitrators shall consider the pertinent facts and circumstances and be guided by the terms and conditions of this Agreement; and, if a solution is not found in the terms of this Agreement, the arbitrators shall apply the governing law of this Agreement. Both Parties shall have the right to present documentary evidence, witnesses and to cross-examine witnesses. The decision of the arbitrators shall be final and binding upon both parties, and neither Party shall seek recourse to a law court or other authorities to appeal for revisions of such decision. . . .
EPA § 28(f)(xv)-(xvii).
21. Section 28(g) contains a cost-shifting provision that requires the non-prevailing party to pay “all reasonable fees and expenses of counsel” to the prevailing party. EPA §28(g).
22. Ghana and GPGC executed the EPA on June 3, 2015. EPA at 2. Ghana's Parliament then ratified the agreement on July 23, 2015. Award ¶ 160.
23. In June 2015, a Ghana Ministry of Power team inspected the power plants in Italy and approved their use for the project. Award ¶149.
24. Ghana initially directed that the power plants be installed at a location known as Aboadze. Award ¶160. That site, however, contained an oxidation pond that had to be moved.
[Page 7]
Id. Throughout 2015, Ghana's representatives repeatedly told GPGC that the government would relocate the pond. Id.
25. On March 6, 2016, however, Ghana's power agency, the Volta River Authority (“VRA”), complained that relocating the oxidation pond would be “uneconomical” and proposed an alternative site at Kpone. Award ¶160. Ghana's Ministry of Power formally revoked the Aboadze site and directed GPGC to install the plants at Kpone instead. Id.
26. In August 2016, the VRA's public union employees began protesting the use of VRA property by private investors such as GPGC. Award ¶160. As a result, the VRA instructed GPGC to cease all activities at Kpone. Id. On January 24, 2017, the VRA informed GPGC that it would not lease the Kpone site. Id.
27. In the meantime, GPGC had dismantled the two power plants in Italy and shipped them to Ghana. Award ¶¶149, 160. Given Ghana's repeated failure to identify a site for the power plants, GPGC identified a third site known as the Blue Ocean site. Award ¶160. GPGC entered into a five-year lease for that site. Id.
28. In December 2016, Ghana held a general election. Award ¶150. A new government assumed power. Id. The new government believed that its predecessor had purchased too much power and that there would be an excess of supply. Id.
29. Ghana's Ministry of Power formed a secret “PPA Committee” to review the various power purchase agreements that Ghana's prior government had entered into. Award ¶151. That committee submitted its report in April 2017. Id. Ghana's Attorney General also prepared and submitted her own memorandum. Id. According to a heavily redacted version of the PPA Committee report, the committee estimated the legal costs of terminating GPGC's Emergency Purchase Agreement as $18 million, as compared to excess capacity charges of $24.9
[Page 8]
million per year for four years if the government proceeded with the project. Award ¶160. The report recommended that the government try to determine how much GPGC had actually spent on the project and then use that amount as the basis for negotiating a termination. Id.
30. In November 2017, Ghana's Minister of Energy reported to Parliament that the PPA Committee had recommended deferring or terminating a total of eighteen different power purchase agreements with various companies. Award ¶152. The Minister explained that “the Government stands to make significant savings from the deferment and/or termination of the reviewed PPAs.” Award ¶153. GPGC's Emergency Purchase Agreement was among the power purchase agreements selected for termination. Award ¶160.
31. On February 18, 2018, Ghana purported to terminate the EPA. Award ¶154. Ghana claimed that it was entitled to terminate the agreement because, among other things, GPGC had failed to satisfy certain contractual conditions. Award ¶155.
32. GPGC protested Ghana's purported termination. Award ¶157. GPGC initially continued work based on assurances that the termination would be withdrawn. Id. But on August 13, 2018, having received no confirmation, GPGC served its own notice of termination based on Ghana's repudiation of the contract. Id.
33. On August 13, 2018, GPGC served a notice of arbitration, invoking the dispute resolution provision of the EPA. Award ¶10.
34. GPGC appointed William Rowley QC, a Canadian and United Kingdom national, as its party-appointed arbitrator, and Ghana appointed Professor Albert K. Fiadjoe, a Ghanaian national, as its party-appointed arbitrator. Award ¶¶6-7. Those two arbitrators then appointed John Beechey CBE, a United Kingdom national, as presiding arbitrator. Award ¶8.
[Page 9]
35. On June 11, 2019, the parties signed terms of appointment confirming that all three arbitrators were duly appointed, and appointing the Permanent Court of Arbitration to administer the proceedings. Award ¶9.
36. GPGC claimed that Ghana had wrongfully terminated the EPA. Award ¶167. GPGC urged that it had satisfied all its conditions precedent and taken all available steps to satisfy its conditions subsequent, but that Ghana had failed in its own duties. Award ¶168.
37. In particular, Ghana failed to provide unimpeded access to a site for the power plants. Award ¶¶168, 170-171. Almost ten months after executing the contract, Ghana revoked the original site due to alleged “unexpected challenges” relocating an oxidation pond. Id. After further delays, Ghana's power agency refused to lease a second site to GPGC because its public union employees began protesting the use of the property by a private company. Id.
38. Ghana also violated its duty to provide tax exemptions. Ghana never obtained approval for the exemptions, forcing GPGC to pay the taxes. Award ¶¶168, 172-177.
39. Finally, Ghana violated its obligation to cooperate with GPGC to obtain necessary licenses. GPGC applied for a power generation license, but Ghana's Energy Commission refused to issue one, and Ghana took no steps to advance that process. Award ¶¶168, 188-190. Ghana's electric grid operator delayed negotiating a connection agreement because GPGC had neither a power generation license nor a site for the plants. Award ¶¶185-187.
40. Ghana defended on the ground that, because the conditions precedent were not fulfilled, the EPA never came into effect. Award ¶¶202-203. Ghana also argued that GPGC did not meet its conditions subsequent and never asked for Ghana's assistance. Award ¶¶204-208.
41. Two years of pre-hearing proceedings followed. Among other things, GPGC repeatedly demanded that Ghana produce unredacted copies of the PPA Committee report and
[Page 10]
Attorney General memorandum showing Ghana's true reasons for terminating the EPA. Award ¶¶54(a), 56, 73, 79, 83. The tribunal repeatedly ordered Ghana to produce those documents. Award ¶¶55, 57, 74. But Ghana refused. It claimed that “the enormity of potential legal suits” made it “exceptionally difficult to disclose” the documents. Award ¶84.
42. On September 25, 2020, both parties filed summary briefing notes setting out their positions. Award ¶¶107, 128-129.
43. The case then proceeded to a five-day merits hearing from October 5 to October 9, 2020. Award ¶134. GPGC presented two fact witnesses and one expert witness, while Ghana presented three fact witnesses and one expert witness. Id.
44. On January 26, 2021, the tribunal issued its Final Award. Kry Decl. Ex. A. The Award spans 1,436 paragraphs across 192 pages and sets forth a detailed and comprehensive analysis of the parties' claims.
45. The tribunal found that Ghana failed to comply with most of its conditions precedent. Ghana never provided unimpeded access to a site for the power plants. Award ¶¶369-371. It never obtained parliamentary approval for the tax exemptions. Id. And it was late obtaining parliamentary approval for the EPA itself. Id.
46. By contrast, GPGC complied with its conditions precedent to conduct natural gas testing and provide maintenance records. Award ¶¶369-371. And GPGC's obligation to approve the site never arose: “[T]here could be no question of any confirmation by GPGC as to the suitability of a Site until GoG had allocated one. It never did.” Award ¶371.
47. The tribunal rejected Ghana's argument that the failure to meet conditions precedent meant that the EPA never entered into effect. Award ¶¶373-380. Under the plain
[Page 11]
terms of the contract, a party's failure to achieve a condition precedent merely gave the other party the option to terminate the contract. It did not prevent the EPA from coming into existence in the first place. Award ¶¶377-378 (citing EPA § 3(d)).
48. As for the conditions subsequent, the tribunal noted that, even if some of GPGC's conditions remained unfulfilled, those conditions could not be grounds for termination unless the failure was “wholly attributable to the action or inaction of GPGC.” Award ¶386 (citing EPA §4(g)). “[T]he record demonstrates that any delay in satisfying the Conditions Subsequent to be met by GPGC was not attributable to GPGC but to GoG.” Award ¶387.
49. First, Ghana failed to provide access to a site for the power plants. With respect to the first site at Aboadze, while Ghana claimed that the cost of relocating the oxidation pond was a “supervening circumstance[],” the tribunal found that excuse “simply unsustainable in the face of the factual record.” Award ¶¶390-391. The parties were well aware of the oxidation pond months before executing the EPA. Award ¶392. Correspondence showed that Ghana believed that relocating the pond was eminently feasible, even if costly. Award ¶¶393-396. With respect to the second site at Kpone, Ghana made no effort to obtain the VRA's confirmation that it would lease the site. Award ¶402. And Ghana made no effort to locate a third site once the Kpone site fell through. Award ¶403.
50. Ghana's Energy Commission would not issue a generating license while the site remained unknown. Award ¶405. And Ghana's electric grid operator would not offer a connection agreement. Id. “The principal obstacle between GPGC and the fulfilment of these Conditions Subsequent was a lack of assistance from GoG, contrary to its contractual obligations ....” Award ¶406. “Such assistance was requested between September and
[Page 12]
November 2017,” but “[i]t was not forthcoming.” Id. “[B]y then, as the factual chronology makes clear, GoG had already decided to terminate the EPA.” Id.
51. The tribunal rejected Ghana's argument that GPGC acted improperly by selecting the Blue Ocean site. Award ¶426. GPGC selected that site only after Ghana had withdrawn two others. Award ¶428. And GPGC kept Ghana apprised about its work. Award ¶¶430-431.
52. The tribunal found that Ghana had already secretly decided to terminate the EPA and was trying to manufacture grounds to do so. At a November 13, 2017 meeting, for example, an Energy Commission official, Dr. Alfred Ofosu Ahenkorah, identified requirements GPGC would have to meet to obtain a license. Award ¶¶453-454. “What Dr Ahenkorah did not tell GPGC at that meeting (or at any time) was that the Committee responsible for the PPA Committee Report, which he had chaired, had recommended to the Ministry of Energy that the EPA be terminated — a recommendation that he professed not to recall when asked about it at the Hearing.” Award ¶455. The tribunal found it “apparent that even as Dr Ahenkorah was putting up further hurdles over which he required GPGC to jump in pursuit of its provisional generation licence in November 2017, the Minister of Energy was about to seek the approval of the Ghanaian Parliament of a decision to terminate the EPA along with a number of other PPAs, based upon the Report of the PPA Committee chaired by Dr Ahenkorah.” Award ¶460.
53. The tribunal took a similar view of the Ghana Attorney General's memorandum. “[T]o the extent that an overall impression of that advice can be obtained from the heavily redacted text produced in the arbitration, it is apparent that the premise upon which the advice was founded was that the EPA was to be terminated; the issue was to identify a legal basis upon which that might be achieved.” Award ¶473. The memorandum was rife with both legal and factual errors. Award ¶¶475, 479-480.
[Page 13]
54. The tribunal found that “the die was cast for the EPA once the PPA Committee Report had reached the conclusion that the projected capacity additions from the PPAs . . . ‘were far in excess of the required additions.”’ Award ¶488. The tribunal identified “the true reason for the purported termination of the EPA”: “[T]he [PPA] Committee suggested that [Ghana] should negotiate a settlement under which it would only compensate GPGC for its actual development costs rather than what GPGC was entitled to under the contract. The Committee calculated what it estimated that actual development cost to be and thus the hoped-for price of a negotiated termination might be: USD 18 Million.” Award ¶492. “[Ghana's] sole reason for terminating the GPGC contract was that its faithful performance would be expensive, that all of the electricity generated would be excess and that [Ghana] thought [it] could negotiate a settlement based on termination against a payment of USD 18 million. So this was a cost/benefit analysis pure and simple . . . [given] a coating of legal veneer [by the A-G's Advice].” Id.
55. The tribunal turned to damages. It began by evaluating the parties' experts. With respect to GPGC's expert, the tribunal found that “[h]er standing as an independent expert was not questioned and she was, in the opinion of the Tribunal, an impressive and credible witness.” Award ¶498. By contrast, with respect to Ghana's expert, “his independence and his expertise are open to question.” Award ¶499. “[H]e had retired as a Director of VRA in November 2019, within two or three months of submitting his Report in this arbitration.” Id.
56. Under Section 25(b) of the EPA, GPGC was entitled to an “Early Termination Payment” for wrongful termination that included a Capital Recovery Charge for 24 months of operation. Award ¶508 (citing EPA §25(b)(i)). GPGC calculated that amount as USD $69,361,680. Award ¶509. Ghana sought only an 8% reduction to account for “shut-downs for preventative maintenance.” Award ¶515. The tribunal rejected that argument. Award ¶517.
[Page 14]
57. GPGC also sought USD $40,223,260 in mobilization costs and USD $18,268,745 in debt financing costs. Award ¶¶521, 523. Ghana responded that GPGC should not have incurred mobilization costs while the site remained uncertain. Award ¶522. The tribunal rejected that argument too. Award ¶¶463-475, 522.
58. The tribunal awarded another USD $6,462,528 for demobilization costs. Award ¶¶527, 530. And it awarded USD $32,448 in preservation and maintenance costs. Award ¶531.
59. The tribunal thus awarded a total Early Termination Payment of USD $134,348,661 for Ghana's wrongful termination of the EPA. Award ¶532.
60. Under the EPA, any amounts due from Ghana to GPGC bore interest at an “Applicable Rate,” compounded monthly. EPA §11(o). The Applicable Rate was the six-month USD LIBOR rate plus a 6% premium. EPA at 3-4.
61. The tribunal ordered both pre-award and post-award interest on the Early Termination Payment at the Applicable Rate, compounded monthly, starting on November 12, 2018, the date the Early Termination Payment was due. Award ¶¶535-536, 545.
62. The tribunal also ordered Ghana to pay nearly all of GPGC's costs for the arbitration. Award ¶550. The tribunal awarded USD $309,877.74 for the fees and expenses of the arbitrators, the tribunal secretary, and the Permanent Court of Arbitration that GPGC had previously incurred. Award ¶551. And it awarded USD $3,000,000 for GPGC's attorney's fees, expert fees, and expenses, bringing the total to USD $3,309,877.74. Award ¶¶552-554.
63. The tribunal ordered interest on the costs award at the three-month USD LIBOR rate, compounded quarterly. Award ¶546.
[Page 15]
64. Because London was the legal seat of the arbitration, the English courts had sole authority to annul or set aside the Award. Bailey Decl. ¶3. Under English law, any challenge had to be brought within 28 days of the Award. Id. (quoting Arbitration Act 1996 §70(3) (Bailey Decl. Ex. A)). The tribunal issued the Award on January 26, 2021. Award at 1. The deadline for any challenge was thus February 23, 2021.
65. On February 19, 2021, Ghana applied for an extension of time to challenge the Award. Bailey Decl. ¶4. On February 22, 2021, the English High Court of Justice extended the deadline to March 8, 2021. Bailey Decl. Ex. B.
66. Ghana did not challenge the Award within that extended deadline. Bailey Decl. ¶5. Instead, three weeks later, on April 1, 2021, Ghana filed a second application for an extension of time. Id. The English court dismissed that application pursuant to a judgment (opinion) of Mr. Justice Butcher dated June 8, 2021, and an order dated June 9, 2021. Bailey Decl. Exs. C, D.
67. As stated in Mr. Justice Butcher's judgment, Ghana sought to challenge the Award on two grounds. First, Ghana claimed that “the Tribunal had failed . . . to conduct the arbitration in accordance with the procedure agreed by the parties” because the EPA required the tribunal to be “guided by the terms and conditions of the [Contract]” in deciding the dispute and, in Ghana's view, the tribunal departed from those terms. Bailey Decl. Ex. C ¶10(a). Second, Ghana claimed that “the Tribunal had failed to deal with all the issues put to it” because it “failed to consider [Ghana]'s arguments as to why mobilisation costs were not payable.” Id. ¶10(b).
68. Mr. Justice Butcher explained that “the court will not normally conduct any substantial investigation of the merits of the challenge application” in ruling on an application for extension of time. Bailey Decl. Ex. C ¶29. “Nevertheless, if the court can readily see on the
[Page 16]
material before it that the challenge appears intrinsically weak, then that will be a factor . . . counting against an extension.” Id.
69. In Mr. Justice Butcher's view, this was “one of the relatively infrequently encountered cases in which the court can see on the present application that the grounds of the proposed challenge are intrinsically weak.” Bailey Decl. Ex. C ¶30. Ghana's argument that the tribunal did not follow agreed-upon procedures was “a clear case of an attempt to present alleged errors of law as errors of procedure.” Id. ¶¶31-32. And Ghana's argument that the tribunal did not consider its arguments about mobilization costs failed because the tribunal did in fact consider those arguments. Id. ¶¶33-34 (citing Award ¶¶463-464, 522).
70. Mr. Justice Butcher thus denied the application. Bailey Decl. Exs. C, D. Following that denial, Ghana took no further action to seek review of the Award in the English courts. Bailey Decl. ¶9. The time for doing so has now expired. Bailey Decl. ¶3.
71. On October 27, 2021, GPGC filed an ex parte application with the English High Court of Justice for entry of judgment on the Award. Bailey Decl. ¶10. That court granted the application by order dated November 4, 2021. Bailey Decl. Ex. E. The order was served on Ghana by diplomatic service, and Ghana did not challenge the order within the time permitted, or at all. Bailey Decl. ¶10.
72. Ghana has made a series of partial payments toward the amounts due. On September 17, 2021, Ghana made a payment of USD $34,348,661; on March 23, 2022, Ghana made a payment of USD $30,000,000; on March 15, 2023, Ghana made a payment of USD $5,000,000; on April 4, 2023, Ghana made a payment of USD $2,500,000; and on June 19, 2023, Ghana made a payment of USD $2,500,000. Burke Decl. ¶¶3-7.
[Page 17]
73. Apart from the amounts above, Ghana has made no other payments to GPGC in connection with the Award. Burke Decl. ¶8. As a result, a substantial portion remains unpaid. As of January 19, 2024, the total amount due with interest is USD $128,657,880.98. Kry Decl. ¶3 & Ex. B.
74. The New York Convention is an international treaty signed by over 150 countries that is designed to facilitate and expedite the recognition and enforcement of foreign arbitral awards. See Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517 (Kry Decl. Ex. C). To that end, the Convention requires that “[e]ach Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles.” Id. art. III, 21 U.S.T. at 2519. The United States is a party to the Convention and is bound by its terms. See New York Arbitration Convention: Contracting States, www.newyorkconvention.org/countries (Kry Decl. Ex. D). The United Kingdom (the seat of the arbitration) and Ghana (the respondent) are both parties too. Id.
75. The New York Convention's goal is “to encourage the recognition and enforcement of commercial arbitration agreements.” Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n.15 (1974). That objective is consistent with the “emphatic federal policy in favor of arbitral dispute resolution” — a policy that “applies with special force in the field of international commerce.” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631 (1985). In light of that strong pro-arbitration policy, confirmation proceedings are a “summary procedure.” TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 940 (D.C. Cir. 2007). “[T]he showing required to avoid summary confirmation is high” and “rests with the party
[Page 18]
resisting confirmation.” Int’l Trading & Indus. Inv. Co. v. DynCorp Aerospace Tech., 763 F. Supp. 2d 12, 20 (D.D.C. 2011).
76. The United States implemented the New York Convention through Chapter 2 of the Federal Arbitration Act. That statute provides that “[t]he Convention . . . shall be enforced in United States courts in accordance with this chapter.” 9 U.S.C. §201. Section 207 specifies:
Within three years after an arbitral award falling under the Convention is made, any party to the arbitration may apply to any court having jurisdiction under this chapter for an order confirming the award as against any other party to the arbitration. The court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.
9 U.S.C. § 207 (emphasis added). Confirmation is thus mandatory unless one of the Convention's narrow grounds for non-enforcement applies: “[W]hen an action for enforcement is brought in a foreign state, the state may refuse to enforce the award only on the grounds explicitly set forth in Article V of the Convention.” TermoRio, 487 F.3d at 935.
77. The Federal Arbitration Act “seeks to streamline the procedures for confirming arbitral awards.” Process & Indus. Devs. Ltd. v. Federal Republic of Nigeria, 962 F.3d 576, 585 (D.C. Cir. 2020). Consistent with that goal, the Act directs that petitions to confirm awards “shall be made and heard in the manner provided by law for the making and hearing of motions,” rather than the pleading procedures applicable to traditional civil actions. 9 U.S.C. §§ 6, 208. Where, as here, no sovereign immunity is at issue because the respondent expressly waived its immunity, courts may address confirmation “in a single round of briefing on the petition to confirm.” Process & Indus. Devs., 962 F.3d at 585.
78. The Award in this case falls within the scope of the Convention. Under the Federal Arbitration Act, “[a]n arbitration agreement or arbitral award arising out of a legal relationship, whether contractual or not, which is considered as commercial, including a
[Page 19]
transaction, contract, or agreement described in section 2 of this title, falls under the Convention” unless it arises out of a “relationship which is entirely between citizens of the United States.” 9 U.S.C. § 202. Those requirements are met. The Award arises out of a commercial Emergency Purchase Agreement for the relocation, installation, and operation of two gas turbine power plants, and no party is a citizen of the United States.
79. Article IV of the Convention requires a party seeking recognition and enforcement to submit “[t]he duly authenticated original award or a duly certified copy thereof” as well as “[t]he original [arbitration] agreement . . . or a duly certified copy thereof.” 21 U.S.T. at 2519-20. Petitioners have submitted those materials. Kry Decl. Ex. A; Bamba Decl. Ex. A.
80. Article V of the Convention provides grounds for denying recognition and enforcement. “[T]he Convention is ‘clear’ that a court ‘may refuse to enforce the award only on the grounds explicitly set forth in Article V.”’ Belize Soc. Dev. Ltd. v. Gov't of Belize, 668 F.3d 724, 727 (D.C. Cir. 2012). None of those grounds applies here.
81. Article V.1(a) permits non-enforcement where one of the parties to the arbitration agreement was “under some incapacity” or where the agreement was “not valid under the law to which the parties have subjected it” — in this case, English law. 21 U.S.T. at 2520; EPA §28(f)(xvi). That provision does not apply here.
82. Ghana has never claimed that it lacked capacity to enter into the EPA. Ghana's Minister of Power executed the agreement on behalf of Ghana, and Parliament subsequently ratified the agreement. EPA at 53 (signature page); Award ¶3. Ghana has never asserted that those individuals or entities lacked capacity to bind Ghana to the EPA.
[Page 20]
83. Nor has Ghana claimed that the EPA's arbitration clause is not valid under the law to which the parties subjected it. Ghana never argued during the arbitration that the EPA's arbitration clause was invalid or that the tribunal otherwise lacked jurisdiction. That failure to preserve any jurisdictional objection during the arbitration forfeits the objection for this enforcement proceeding too. See Howard Univ. v. Metro. Campus Police Officer's Union, 512 F.3d 716, 720 (D.C. Cir. 2008) (“[A] party that does not object to the arbitrator's jurisdiction during the arbitration may not later do so in court.”); Sistem Mühendislik Inşaat Sanayi Ve Ticaret, A.Ş. v. Kyrgyz Republic, 741 F. App’x 832, 834 (2d Cir. 2018) (sovereign “waived its jurisdictional argument by failing to raise that challenge during the arbitration”).
84. Ghana did argue that the EPA never came into effect because certain conditions precedent were not satisfied. Award ¶¶304-308. But under well-established severability principles, that challenge to the effectiveness of the EPA as a whole does not cast doubt on the arbitration clause specifically. “[A]s a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract.” Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445 (2006); see also Belize Soc. Dev. Ltd. v. Gov't of Belize, 794 F.3d 99, 102-03 (D.C. Cir. 2015) (similar). That is equally true if the Court analyzes severability as a question of English or Ghanaian law. See Arbitration Act 1996 §7 (Eng.) (Bailey Decl. Ex. A) (“[A]n arbitration agreement which forms or was intended to form part of another agreement . . . shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, or did not come into existence . . . .”); Alternative Dispute Resolution Act, 2010, §3(1) (Ghana) (Kry Decl. Ex. E) (“[A]n arbitration agreement which forms or is intended to form part of another agreement, shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid or did not come into existence . . . .”); Balkan Energy Ltd. v. Republic
[Page 21]
of Ghana, 302 F. Supp. 3d 144, 151-55, 157 (D.D.C. 2018) (enforcing arbitration clause despite Ghana's challenge to broader contract). In any case, Ghana's argument that the EPA never came into effect is meritless for reasons the tribunal explained. Award ¶¶373-380.
85. Article V.1(b) of the Convention permits non-enforcement where the party “was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case.” 21 U.S.T. at 2520. That provision does not apply. Ghana received notice of the arbitrator appointments and participated in the selection process. Award ¶7. Ghana then participated in two years of pre-hearing proceedings. Award ¶¶10-134. Ghana submitted a pre-hearing brief in the format to which it consented. Award ¶¶107, 129. And Ghana participated in a five-day merits hearing at which it presented three fact witnesses and one expert witness. Award ¶134. Ghana thus had ample opportunity to present its case.
86. Article V.1(c) permits non-enforcement where an award “deals with a difference not contemplated by or not falling within the terms of the submission to arbitration” or “contains decisions on matters beyond the scope of the submission to arbitration.” 21 U.S.T. at 2520. That provision does not apply. The EPA's arbitration clause covers “any dispute or disagreement . . . arising out [of] or in connection with this Agreement” other than an invoice dispute, and thus encompasses this dispute over Ghana's wrongful termination of the agreement. EPA §28(f)(xv). GPGC's notice of arbitration and statement of claim alleged the same wrongful conduct that the tribunal addressed in the Award. Award ¶¶167-168 & nn.120-122.
87. Ghana claimed in the English proceedings that “the Tribunal had failed to deal with all the issues put to it” — namely, its “arguments as to why mobilisation costs were not payable.” Bailey Decl. Ex. C ¶10. Article V.1(c), however, applies only where a tribunal addresses matters beyond the parties' submissions — not where it allegedly fails to address a
[Page 22]
party's argument. “Nothing in the language of article V(1)(c) grants enforcing authorities the discretion to refuse or otherwise limit the recognition or enforcement of an award which has failed to address all issues submitted by the parties . . . .” UNCITRAL Secretariat, Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 177 ¶14 (2016 ed.) (Kry Decl. Ex. F); see also Albert Jan van den Berg, The New York Arbitration Convention of 1958, at 320-22 (1981) (Kry Decl. Ex. G) (“An incomplete award . . . does not constitute a cause for refusal of enforcement under Article V(1)(c), nor under any other ground of Article V.” (citation omitted)). A court “may refuse to enforce the award only on the grounds explicitly set forth in Article V.” Belize Soc. Dev. Ltd. v. Gov't of Belize, 668 F.3d 724, 727 (D.C. Cir. 2012). A tribunal's alleged failure to address a party's argument is not one of those grounds.
88. In any event, Ghana's claim fails on the facts. As the English court observed, the tribunal did consider Ghana's arguments about mobilization costs. Bailey Decl. Ex. C ¶¶33-34 (citing Award ¶¶463-464, 522). The tribunal found that Ghana was well aware that GPGC was relocating the power plants from Italy even though the site had not been finalized, and Ghana raised no objection. Award ¶¶463-475. Ghana simply disagrees with the tribunal's ruling.
89. Article V.1(d) permits non-enforcement where “[t]he composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties.” 21 U.S.T. at 2520. Nothing like that occurred here. The parties each appointed an arbitrator, and those two arbitrators then appointed a chair, just as the EPA provided. Award ¶¶6-8; EPA §28(f)(xvi). Ghana signed terms of appointment “confirm[ing] that the members of the Tribunal were validly appointed in accordance with the Agreement.” Award ¶9. The tribunal conducted the arbitration under UNCITRAL's 2013 Arbitration Rules, just as the EPA specifies. Award at 1 (cover); EPA § 28(f)(xv).
[Page 23]
90. During the English proceedings, Ghana claimed that the tribunal departed from the agreed-upon procedures because the EPA required the tribunal to be “guided by the terms and conditions of this Agreement” in resolving the dispute, EPA §28(f)(xvii), while in Ghana's view, the tribunal departed from those terms, Bailey Decl. Ex. C ¶10. That argument fails for multiple reasons. For one thing, Ghana forfeited that argument by not making it in the arbitration. While Ghana may have objected to the tribunal's contract interpretations, it never suggested (so far as the Award shows) that those objections implicated the agreed-upon arbitral procedures. See AO Techsnabexport v. Globe Nuclear Servs. & Supply GNSS, Ltd., 404 F. App’x 793, 798 (4th Cir. 2010) (party “waived [Article V.1(d)] argument by failing to raise it during the arbitration”).
91. In any event, Ghana's Article V.1(d) argument is meritless. “Courts are reluctant to set aside arbitral awards under the New York Convention based on procedural violations, reflected in cases holding that the Convention embodies a pro-enforcement bias.” Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 296 (5th Cir. 2004). Article V.1(d) does not “permit reviewing courts to police every procedural ruling made by the Arbitrator and to set aside the award if any violation . . . is found.” Compagnie des Bauxites de Guinee v. Hammermills, Inc., No. Civ. A. 90-0169, 1992 WL 122712, at *5 (D.D.C. May 29, 1992). Courts reject Article V.1(d) challenges so long as “there is more than a ‘barely colorable justification’ to support a finding that the arbitrators conducted the arbitration in accordance with the parties' agreed-upon procedure.” Kondot S.A. v. Duron LLC, 586 F. Supp. 3d 246, 258 (S.D.N.Y. 2022); see also 245 Park Member LLC v. HNA Grp. (Int'l) Co. Ltd., No. 22 Civ. 5136, 2022 WL 2916577, at *3 (S.D.N.Y. July 25, 2022) (same).
92. Those principles apply with special force where a party's “procedural” challenge is simply that the arbitration clause required the tribunal to apply the contract in resolving the
[Page 24]
dispute, and the tribunal failed to apply the contract. “A party challenging an award on this basis . . . bears a substantial burden of proof. It must demonstrate that the tribunal expressly adopted and applied [non-contractual] standards without the parties having agreed to its doing so. This level of overtness will generally not be present.” Restatement (Third) of the U.S. Law of International Commercial and Investor-State Arbitration §4.13 cmt. e (rev. 2023) (Kry Decl. Ex. H) (emphasis added); see also UNCITRAL Secretariat, Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 198 ¶36 (2016 ed.) (Kry Decl. Ex. F) (“The application of the law by a tribunal . . . goes to the actual merits of a dispute and therefore falls outside the scope of [Article V.1(d)].”).
93. Ghana cannot make that showing. Even if Ghana may disagree with the tribunal's contract interpretations, the tribunal certainly never said that it was ignoring the contract and deciding the case on a non-contractual basis instead. Moreover, by its terms, the EPA requires only that the tribunal be “guided” by the contract. EPA §28(f)(xvii). The tribunal was clearly “guided” by the contract here, even if Ghana does not agree with every step in the tribunal's interpretive path. As the English court aptly observed, Ghana's argument is “a clear case of an attempt to present alleged errors of law as errors of procedure.” Bailey Decl. Ex. C ¶¶30-32.
94. Article V.1(e) of the Convention permits non-enforcement where “[t]he award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.” 21 U.S.T. at 2520. No such circumstances exist here. The Award by its terms is final, and English law provided only 28 days to challenge it in the English courts. Bailey Decl. ¶3 (citing Arbitration Act 1996 § 70(3) (Bailey Decl. Ex. A)). Ghana never brought such a challenge. Bailey Decl. ¶9.
[Page 25]
95. Article V.2(a) requires non-enforcement where “[t]he subject matter of the difference is not capable of settlement by arbitration under the law of th[e] country” where enforcement is sought. 21 U.S.T. at 2520. This commercial dispute clearly would have been arbitrable under United States law. See 9 U.S.C. § 2.
96. Finally, Article V.2(b) requires non-enforcement where “recognition or enforcement of the award would be contrary to . . . public policy.” 21 U.S.T. at 2520. That exception is “construed narrowly” and “applie[s] only where enforcement would violate the United States' most basic notions of morality and justice.” Belize Bank Ltd. v. Gov't of Belize, 852 F.3d 1107, 1111 (D.C. Cir. 2017) (alteration omitted). No such circumstance is present here.
97. Ghana argued in the arbitration that GPGC's acquisition of the Blue Ocean site was “undoubtedly tainted with ignominious corruption” because GPGC's majority shareholder, Trafigura, was also an indirect minority shareholder in Blue Ocean. Award ¶331. But the tribunal rejected that argument. GPGC showed that “[its] lease of the Blue Ocean Site was an arm's length transaction, undertaken only after an independent expert's valuation of the market rent for such a lease.” Award ¶269. And the tribunal found that “[t]he evidence that [Ghana] was aware of the selection and acquisition of the Blue Ocean Site and of the start of construction there and that it never raised an objection is overwhelming.” Award ¶448 (emphasis added).
98. Those circumstances foreclose any public policy defense. Even when facing far more serious allegations of actual bribery or corruption — rather than mere related-party transactions of the sort at issue here — courts refuse to find public policy violations where the respondent had the opportunity to air its claims in the arbitration. There is no U.S. public policy against confirming an award where the tribunal fully considered allegations of impropriety and found them unsupported. See Tatneft v. Ukraine, 21 F.4th 829, 838 (D.C. Cir. 2021) (rejecting
[Page 26]
public policy defense where “[t]he parties have already litigated and arbitrated their claims” and “[i]f Ukraine wanted to raise claims about the illegality of the share purchases . . . it had the opportunity to raise those claims before the arbitral panel”); BCB Holdings Ltd. v. Gov't of Belize, 650 F. App’x 17, 19 (D.C. Cir. 2016) (rejecting public policy argument because “[t]he arbitral tribunal did not find any corruption”); Belize Soc. Dev. Ltd. v. Gov't of Belize, 5 F. Supp. 3d 25, 43 (D.D.C. 2013) (similar), aff’d, 794 F.3d 99 (D.C. Cir. 2015).
99. The Court should grant prejudgment interest, both pre-award and post-award, at the rates and on the terms specified in the Award.
100. “[P]ayment of appropriate interest [is] ‘a dictate of natural justice’ necessary ‘to repair all the damages that accrue naturally’ from the breach of an obligation.” LLC SPC Stileks v. Republic of Moldova, 985 F.3d 871, 881 (D.C. Cir. 2021). Prejudgment interest is thus “an element of complete compensation” under United States law. Id. “[O]nly if such interest is awarded will a person wrongfully deprived of his money be made whole for the loss.” Waterside Ocean Nav. Co. v. Int’l Nav. Ltd., 737 F.2d 150, 153-55 (2d Cir. 1984).
101. “[A] decision to award prejudgment interest ‘must be exercised in a manner consistent with the underlying arbitration award.”’ Stileks, 985 F.3d at 881; see also Ministry of Def. of the Islamic Republic of Iran v. Cubic Def. Sys., Inc., 665 F.3d 1091, 1103 (9th Cir. 2011). Thus, where a tribunal's award specifies pre-award and post-award interest, a court should apply those same terms in awarding prejudgment interest on the judgment enforcing the award.
102. After a court enters judgment enforcing the award, by contrast, post-judgment interest accrues at the statutory rate prescribed by 28 U.S.C. § 1961.
[Page 27]
103. The tribunal ordered pre-award and post-award interest on the Early Termination Payment at the contractually specified interest rate and compounding period — namely, six-month USD LIBOR plus 6% on the applicable date, compounded monthly — starting on November 12, 2018, the date payment was due. Award ¶¶535-536, 545. The tribunal ordered interest on costs at the three-month USD LIBOR rate, compounded quarterly. Award ¶546.
104. Claim calculations showing the total amounts due with interest as of January 19, 2024, are attached as Exhibit B to the Kry Declaration. Those calculations account for Ghana's partial payments and assume (favorably to Ghana) that all partial payments apply to the Early Termination Payment rather than the costs award.
105. A proposed order and proposed form of judgment are attached. In the event the Court grants this petition, petitioner can submit an updated claim calculation.
WHEREFORE, petitioner respectfully requests an order:
[Page 28]
|
Dated: January 19, 2024 |
Respectfully submitted, /s/ Robert K. Kry Attorney for Petitioner |