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US court overturns $165 million judgement debt against University of Ghana

UG wins court case in US

The Southern District Court of New York has refused a request by an insurance company to cause the University of Ghana to pay an amount of $165,000,000 in judgement debt, reports.

The payment, according to ACE American Insurance Company, is for a breach of the University’s obligations under a public-private partnership agreement construction project signed in 2015.

The university, as part of the agreement with CPA, was expected to lease land and grant a concession to CPA to finance, construct, operate, and maintain various new infrastructure projects on its campus.

However, according to the CPA, UG in 2016 failed to procure the necessary letters of credit as required under the agreement.

The company, the report added, therefore, went ahead to exercise 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, after analysing the agreement, pegged the value at $165million. The university, prior to the evaluation, announced a preference for an arbitration process to resolve the dispute.

The insurance company, however, opted against the arbitration process, insisting that the University of Ghana had failed to meet the necessary agreement.

The construction company, therefore, procured the services of ACE American Insurance Company in 2019 to recover the $165 million from UG.

The insurance company, in pursuance of the task, initiated a court action against the University of Ghana in the US District Court.

The University of Ghana, in response, filed processes urging the court to dismiss the case.

UG contended that the court lacked jurisdiction to hear the matter.

The court, presided over by Naomi Reice Buchwald, in a ruling on August 15, 2022, upheld UG’s arguments and dismissed the case.

The court ruled that the construction agreement had stated in clear terms that “the place of arbitration shall be in London, UK” adding that any such arbitration in the US is permissible if it were impossible to conduct the arbitration in the UK.



The court also upheld UG’s view that such an action could not be initiated against it because the school is not an “alter ego of the Republic of Ghana”.


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