A District Court in the United States of America has turned down a request to compel the University of Ghana (UG) to pay ACE American Insurance Company an amount of $165,000,000.
This
is judgement debt the school was to pay the company for allegedly breaching its
obligation under a construction project.
The
project is a public-private partnership agreement UG entered into with CPA
Ghana in 2015.
The
University was required to lease land and grant a concession to CPA to finance,
construct, operate and maintain various new infrastructure projects on its
campus.
In
2016, CPA alleged UG had not procured the necessary letters of credit as
required under the agreement. It, therefore, exercised its right to terminate
the agreement and further exercised the option of having an independent expert
determine the Termination Value of the contract.
The
Expert in 2018 pegged the value at $165million. UG had prior to the
announcement of this value, indicated its preference for an arbitration process
to resolve the dispute.
CPA
however opted not to permit this arbitration insisting UG had not met the
necessary requirements. CPA in 2019 tasked the ACE American Insurance Company
to recover the $165million from UG.
The
insurance company then initiated this action against the University at the US
District Court, Southern District of New York. UG however filed processes urging
the Court to dismiss the case. It contended that the court lacked jurisdiction
to hear the matter. The Court presided over by Naomi Reice Buchwald on August
15, 2022 upheld UG’s arguments and dismissed the case.
The
Court noted that the construction agreement had stated in clear terms that “the
place of arbitration shall be in London, UK”.
This,
it explained, meant any such arbitration in the US was only permissible if it
was impossible to conduct the arbitration in the UK.
It
also upheld UG’s view that such an action cannot be initiated against it
because the school is not “alter ego of the Republic of Ghana”.
This
was UG’s response to the Insurance company insisting it can take action against
the University because the Foreign Sovereign Immunities Act permits it to do
so.
It
was for these reasons that the court dismissed the case against UG.
Source: myjoyonline.com