The London-seated international arbitration between Power Distribution Services Ghana Limited (PDS) and the Electricity Company of Ghana (ECG) has ended decisively in favour of ECG, with the Tribunal dismissing all of PDS’s claims.
The dispute, which has been before the arbitral panel for nearly three years, centred on PDS’s contention that ECG had wrongfully terminated the Lease and Assignment Agreement (LAA) and the Bulk Supply Agreement (BSA), both signed on 3 July 2018.
PDS argued that it had satisfied all the Conditions Precedent (CPs) required for the transfer of operations from ECG, as evidenced by ECG’s signing of the Transfer Date Confirmation Letter (TDCL). It therefore sought a declaration of wrongful termination, direct costs of about US$39.4 million, and lost profits totalling US$351.5 million, together with interest and any other relief deemed appropriate by the Tribunal.
According to PDS, ECG’s decision to terminate the concession did not comply with Section 3.4 of the LAA, which set out the post-Transfer Date process for termination, including payment of a Buy-Out Price.
ECG’s defence and counterclaim
In its defence, ECG, represented in the arbitration by Cherie Blair KC and her London-based international law firm Omnia Strategy LLP, maintained that the termination was fully justified.
ECG’s position was that PDS had misrepresented the validity of the Payment Guarantees, which underpinned the transaction. Subsequent investigations revealed that the guarantees were unauthorised and forged under Qatari law, a fact later confirmed by a ruling of the Qatari Court of Cassation.
ECG argued that PDS had failed to carry out proper due diligence before relying on the fraudulent guarantees, which were issued by an official of Al Koot Insurance and Reinsurance Company without authority.
In its counterclaim, ECG presented two reconciliation scenarios:
• If the agreements were deemed operative, PDS owed ECG US$551 million;
• If not, PDS owed ECG US$315.5 million.
ECG’s defence was reinforced by expert opinions from Ghanaian and Qatari legal authorities, and by factual witnesses who detailed the urgency of meeting Millennium Challenge Compact timelines and the subsequent discovery of the invalid guarantees.
Tribunal’s Decision
After extensive hearings and evidence spanning three years, the Tribunal dismissed all claims brought by PDS, freeing ECG to proceed with its own counterclaim.
Legal analysts say the ruling affirms ECG’s position that the concession termination was warranted and that PDS bore full responsibility for the submission of invalid financial guarantees.
Representation and Next Steps
Throughout the arbitration, ECG was represented by a team of Ghanaian lawyers, including Godwin Kudzo Tameklo, working closely with Omnia Strategy as international counsel.
The decision marks a significant milestone in one of Ghana’s most closely watched commercial disputes, effectively bringing closure to the long-running PDS-ECG concession saga and paving the way for ECG to pursue its counterclaims and recover sums due.
By Asaase News
