University of Ghana wins $165 million judgement debt case

A request to compel the University of Ghana (UG) to pay $165,000,000 to ACE American Insurance Company was denied by a district court in the United States of America.

This is a judgment debt that the school was supposed to pay the business for allegedly breaking a contract for construction.

With CPA Ghana, UG engaged into a public-private partnership deal for the project in 2015.

In order for CPA to fund, build, run, and maintain various new infrastructure projects on its campus, the University was forced to lease property and provide a concession to the company.

In 2016, CPA claimed that UG had failed to get the appropriate letters of credit as stipulated in the contract. It used this as justification to use both its right to terminate the contract and its option to have a third party decide its termination value.

The Expert estimated the worth at $165 million in 2018. UG had previously said that it preferred using an arbitration process to settle the conflict before the publication of this value.

However, CPA decided not to approve this arbitration, claiming that UG had not complied with the conditions. CPA gave the ACE American Insurance Company the job of getting the $165 million back from UG in 2019.

The insurance company then filed this lawsuit against the university in the Southern District of New York’s US District Court. However, UG filed paperwork requesting that the case be dismissed. It argued that the court didn’t have the authority to consider the case. On August 15, 2022, the case was dismissed by the court presided over by Naomi Reice Buchwald after UG’s claims were supported.

The Court noted that the construction agreement had stated in clear terms that “the place of arbitration shall be in London, UK”.

This meant, it was clarified, that any such arbitration could only be held in the US if it was impossible to hold it in the UK.

Additionally, it supported UG’s argument that no such action could be taken against it because the institution is not a “alter ego of the Republic of Ghana.”

This was the University’s reaction to the Insurance company’s assertion that it could sue the University because of the Foreign Sovereign Immunities Act’s provisions.

Due to these factors, the court decided to rule in favor of UG.

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