The University of Ghana Legon has issued a statement claiming it is not liable for any judgment debt of a staggering US$165 million to be coughed up for US-based insurance company, Chubb Ltd.
In a statement released on its official website on Friday, August 6, 2021, the embattled premier university claims the case has been misrepresented.
“Contrary to certain reports seen in the media, the University can categorically confirm that no court judgment has been issued against the University in relation to the Project. The New York Petition does not in any way comprise a judgment. Rather, the New York Petition simply represents an initial step directed at commencing proceedings before the New York courts. Such courts will allow the University full opportunity to respond to and contest the contents of the Petition. The New York Petition presents an inaccurate and one-sided account of the Project. Further, the Petition is ill-founded and fundamentally flawed,” the Registrar of the university, Emelia Agyei-Mensah wrote in the statement.
It is unclear how the University will defend itself in the ongoing arbitration in New York.
Last week global insurer Chubb Ltd confirmed it has asked a New York federal judge to confirm a $165 million arbitration award against the University of Ghana-Legon.
This is because Legon has reportedly defaulted on a flagship development partnership backed by the U.S. government to construct some infrastructure, including hostels on the school’s campus.
According to the petition filed in the Southern District of New York, W.P Carey Investment Trust which Chubb Limited represents won the judgment debt in 2018 after the University of Ghana terminated a US$ 64 million contract agreement to construct and maintain four new facilities.
And now, the judgment debt sought by Chubb Limited reflects the value of rental income that the new campus facilities would have generated, Chubb told the court.
Reports show that the $64 million contract was signed in 2016 during the erstwhile John Maham administration, with a mortgage financing agreement from the U.S. State Department’s Overseas Private Investment Corp. (now Development Finance Corp.) of up to $41 million.
The project was insured with a Chubb corporate country risk policy, the project was proposed to help meet demand for higher education in Africa.
Whatsup News gathered that the project would have helped attract and accommodate Ph.D. students from across the continent and would have transformed Legon into a first-class research institution.
But the University of Ghana was unable to procure a contractually required letter of credit, according to the Chubb petition, and moved to terminate the contract, triggering arbitration in 2018.
According to Law360, a subsidiary of Portfolio Media Inc based in the US which reported the new judgment debt, while Chubb’s petition stated that the agreement was terminated because of the university’s failure to procure a letter of credit, the deal appeared to go sour earlier, when the recently retired Vice-Chancellor of the University, Prof. Ebenezer Oduro Owusu took office and openly voiced his opposition to the contract in a series of inflammatory letters and statements to the press.
According to W.P Carey’s partner Africa Integras, the companies had already poured tens of millions of dollars into the expansion, and the project was only a year away from construction completion.
Andrea Pizziconi, founder and managing principal, told Law360 that new chancellor Ebenezer Owusu was “actually offered several options to obtain the letter of credit. However, against the strong advice of his own advisers, Owusu refused to proceed with any of the options presented to him.” Pizziconi noted that his actions seemed “personally motivated as even the Ghanaian government, at times, attempted to intervene to avoid the disastrous termination of the project that ensued.”
In a 2019 press release, the university denied being subject to any arbitration award. Meanwhile, Owusu personally attacked his predecessor and Pizziconi in the press, reports Law360.
It is believed that due to the actions of the disgruntled Vice-Chancellor, some 20,000 additional Ghanaian students were prevented from enrolling at UG or getting housing facilities because those facilities were not finished.
This latest judgment debt will rack up the tally under the Akufo Addo administration to over US$800 million between September 2020 and June 2o21.
Recently, the government was slapped a US$170 million judgment debt by the London-based United Nations Commission on International Trade Law (UNCITRAL) Tribunal which had awarded the amount to the energy company, Ghana Power Generation Company (GPGC) for the arbitrary cancellation of its power contract by the Akufo Addo administration.
In February 2021, Ghana became a candidate for some US$ 55 million brewing judgment debt to be paid to Chinese company, Beijing Everyday whose US$ 100 million “intelligent street light” reportedly cancelled arbitrarily.
Again, in late 2020, the Portuguese construction giant Mota-Engil and French engineering company Egis decided they will be dragging Ghana to court for arbitrarily cancelling a US$ 250 million Accra-Tema Highways contract won by the consortium.
Ghana would be paying all these avoidable judgment debts amidst the government’s lamentation of bad finances supposedly caused by the COVID-19 outbreak. The government had also asked for austerity measures before it can find its footings, but the wasteful expenditure of the Akufo Addo administration tells an entirely different story.