United States District Court, District of Columbia
MEMORANDUM OPINION AND ORDER
P. Mehta, United States District Judge
Balkan Energy Limited (“Balkan UK”) and Balkan
Energy (Ghana) Limited (“Balkan Ghana”) bring
this action to enforce a 2014 foreign arbitral award returned
against Respondent Republic of Ghana
(“Respondent” or “Ghana”) by the
Permanent Court of Arbitration at The Hague, Netherlands.
Balkan Ghana was awarded $11.75 million plus costs and
interest. Petitioners now seek to confirm the award under the
Federal Arbitration Act (“FAA”), 9 U.S.C.
§§ 201, et seq., which codifies the
Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, June 10, 1958, 21 U.S.T. 2517 (the
“New York Convention”).
reasons that follow, the court grants the Petition to Confirm
the Arbitral Award as to Balkan UK and denies Ghana's
Motion to Dismiss the Petition.
with a severe power shortage in 2007, Ghana negotiated with
Balkan Energy LLC, a company based in Texas, for the
refurbishment and commissioning of the Osagyefo Barge, an
unused power barge located in the Western Region of Ghana.
Pet. to Confirm Arbitral Award, ECF No. 1 [hereinafter Pet.],
¶¶ 15-16. In order to carry out the project, and as
required by Ghana law, Balkan Energy LLC formed a local
subsidiary-Petitioner Balkan Ghana-on July 16, 2007.
Id. ¶ 18. Balkan Ghana is a wholly-owned
subsidiary of Petitioner Balkan UK, a company formed and
registered in the United Kingdom and Wales. Id.
¶ 15. Balkan UK, in turn, is a wholly-owned subsidiary
of Balkan Energy LLC. Id. Eleven days after its
formation, Petitioner Balkan Ghana and Respondent Republic of
Ghana entered into a Power Purchase Agreement
(“PPA”) memorializing the parties' agreement.
Id. ¶ 18; Pet., Ex. C, ECF No. 1-4 [hereinafter
PPA]. As laid out in the PPA, Balkan Ghana was to refurbish,
equip, commission, test, and operate the barge. Pet. ¶
18 (citing PPA, arts. 2.1-2.4). In turn, Ghana was to provide
electricity onsite; connect the site to the national
electrical grid; facilitate the importation of equipment and
acquisition of permits, approvals, and visas; construct and
install the transmission line required for connection to the
national grid; and pay for all electricity generated by the
barge during the contract term. Id. (citing PPA,
arts. 2.5-2.10). Under the PPA, the parties agreed to submit
any disputes to arbitration before the Permanent Court of
Arbitration in The Hague, Netherlands. See PPA, art.
22.2. The parties also agreed that the PPA “shall be
governed by and construed in accordance with the laws of the
Republic of Ghana.” PPA, art. 23.
181(5) of the 1992 Constitution of Ghana requires
parliamentary approval for any “international business
or economic transaction to which the Government is a
party.” In light of this requirement, Article 7.2 of
the PPA conditioned the effectiveness of the PPA on the
requirement that Ghana provide assurances regarding its
authority to enter into the agreement with Balkan Ghana
without parliamentary approval, in the form of “a
letter from the Government of Ghana that all the required
approvals from the relevant authorities in Ghana have been
obtained, ” as well as a “legal opinion of the
Attorney General of the Republic of Ghana as to the validity,
enforceability[, ] and binding effect of [the PPA].”
PPA, art. 7.2. Accordingly, on October 26, 2007, Ghana's
Attorney General and Minister for Justice provided Balkan
Ghana with two legal opinions. See Pet., Ex. D, ECF
No. 1-5 [hereinafter 1st AG Opinion]; Pet., Ex. E, ECF No.
1-6 [hereinafter 2d AG Opinion]. The first opinion explained
that because Balkan Ghana was a locally incorporated company,
the project “involve[d] a local company in a local
transaction with the Government, ” and thus the
“PPA does not come under the ambit of article 181(5) of
the 1992 Constitution” and “[p]arliamentary
approval would not be required for the effectiveness of the
[PPA].” 1st AG Opinion at 1. In the second opinion, the
Attorney General assured Balkan Ghana that “[Ghana] has
the power to enter into the [PPA] and to exercise its rights
and perform its obligations thereunder, and execution of the
[PPA] on behalf of [Ghana] by the person(s) who executed the
[PPA] was duly authori[z]ed.” 2d AG Opinion at 1.
some time, a dispute arose between the parties. Balkan Ghana
accused Ghana of failing to fulfill its obligations under the
PPA-specifically, the requirements that Ghana provide
adequate site electricity and connect the Barge to the
electrical grid. Pet. ¶¶ 25-26; Pet., Ex. A, ECF
No. 1-2 [hereinafter Award on the Merits], ¶¶
279-81, 285-87. For its part, Ghana denied that it had
breached the PPA. Ghana's Attorney General sent a Notice
of Breach to Balkan Ghana in September 2009, asserting that
the “dispute between the parties . . . cannot be
settled through direct discussions by the Parties.”
Pet., Ex. F, ECF No. 1-7, at 1-2. The Attorney General
“invoke[d] clause 22.2 of the PPA” and
“recommended that the [dispute] be referred to the
Permanent Court of Arbitration for resolution.”
Id. The Attorney General never filed a notice of
arbitration, but Balkan Ghana did so on December 23, 2009,
pursuant to Article 22.2 of the PPA. An arbitral tribunal was
constituted on April 1, 2010. Pet., Ex. B, ECF No. 1-3
[hereinafter Interim Award], ¶ 7.
25, 2010, the Attorney General of Ghana obtained an ex parte
injunction from the Ghana High Court restraining Balkan Ghana
from proceeding with arbitration pending the court's
determination of whether the PPA and its arbitration clause
required parliamentary approval under Article 181(5) of the
Ghana Constitution. Interim Award ¶ 45. The arbitral
tribunal nonetheless issued an Interim Award addressing its
jurisdiction to hear the dispute in December 2010. See
generally Interim Award. The tribunal concluded that the
arbitration agreement in the PPA was severable from the
larger contract, id. ¶ 99, 106-08, and that
while the PPA as a whole was governed by Ghanaian law, the
arbitration agreement was governed by the law of the
Netherlands, as the designated seat of arbitration,
id. ¶¶ 151-52. Applying Dutch law, the
tribunal explained that “the validity of the
arbitration agreement is not affected by Article 181(5) of
the [Ghana] Constitution, ” id. ¶ 159,
and that it “d[id] not have any doubts as to its
jurisdiction under the arbitration agreement . . .
irrespective of the decision that may be reached in the
Ghanaian courts regarding the validity or enforceability of
the PPA, ” id. ¶ 187.
the Supreme Court of Ghana decided to “refer to
itself” the central constitutional question presented
to the Ghana High Court (Commercial Division) concerning the
PPA. Pet., Ex. G, ECF No. 1-8 [hereinafter Ghana Sup. Ct.
Decision], at 2. In a decision captioned The Attorney
General v. Balkan Energy Ghana Ltd., et al., and issued
on May 16, 2012, the court stated that it had two issues to
resolve: (1) “whether or not the [PPA] . . .
constitutes an international business transaction within the
meaning of Article 181(5) of the Constitution”; and (2)
“whether or not the arbitration provisions contained in
clause 22.2 of the [PPA] . . . constitutes an international
business transaction within the meaning of Article 181(5) of
the Constitution.” Ghana Sup. Ct. Decision at 2-3. The
Supreme Court of Ghana concluded that the PPA itself was
indeed an “international business transaction”
that should have been approved by Ghana's Parliament.
Id. at 40-41. But it also held that, “[o]n the
other hand, ” the “arbitration provisions
contained in clause 22.2 of the [PPA] . . . [do] not
constitute an international business transaction within the
meaning of Article 181(5).” Id. at 41. As to
the latter holding, the court tersely explained that
“it is clear that the international arbitration
provision cannot, in and of itself, constitute an
international business or economic transaction.”
Id. In so concluding, the Supreme Court of Ghana
also observed the following:
An international commercial arbitration is not by itself an
autonomous transaction commercial in nature which pertains to
or impacts . . . the wealth and resources of the country. An
international commercial arbitration draws its life from the
transaction whose dispute-resolution it deals with. We
therefore have difficulty in conceiving of it as a
transaction separate and independent from the transaction
that has generated the dispute it is required to resolve.
Id. The Supreme Court then returned the matter to
the High Court to apply the Supreme Court's
interpretation of Article 181(5). Id.
arbitral tribunal pressed on after the Supreme Court of Ghana
rendered its decision. After considering extensive briefing
by the parties and holding a week-long hearing in the matter,
Pet. ¶ 36, the tribunal issued its final Award on the
Merits (“Award”) on April 1, 2014, in favor of
Balkan Ghana. The tribunal found that: (1) Balkan Ghana had a
reasonable expectation that Ghana had accepted the validity
of the PPA, and was therefore entitled to rely on the PPA and
expect that Ghana would fulfill its obligations thereunder,
Award on the Merits ¶ 397; and (2) Ghana failed to
comply with its obligations under the PPA, id.
¶ 437-42, 448-52. The tribunal ordered Ghana to pay
Balkan Ghana a total of $11.75 million plus interest and
costs. Pet. ¶¶ 41-42; see Award on the
Merits ¶ 642. The tribunal also ordered that the PPA be
terminated as of the date of the Award. Award on the Merits
¶ 642. Petitioners assert that, as of the date of the
filing of the Petition, the amount owing from Ghana is
approximately $13, 348, 720. Pet. ¶ 45; Pet., Ex. J, ECF
August 22, 2016, Balkan Ghana and Balkan UK agreed to a deed
of assignment wherein Balkan Ghana assigned all of its rights
and interests in the Award to Balkan UK. See
Pet., Ex. I, ECF No. 1-10 [hereinafter Deed of Assignment].
March 31, 2017, Balkan UK and Balkan Ghana filed the instant
Petition to confirm the Award. See generally Pet.
Ghana moved to dismiss the Petition on August 24, 2017.
Resp't's Mot. to Dismiss, ECF No. 17 [hereinafter
Resp't's Mot.]. In its motion, Ghana
“reserv[ed] its rights to answer the petition, conduct
necessary discovery, and proceed onto the merits” at a
later point. Id. at 13. Petitioners opposed the
motion. Pet'rs' Mem. of Law in Opp'n to Mot. to
Dismiss and Reply in Supp. of Pet., ECF No. 19 [hereinafter
Pet'rs' Opp'n]. Ghana replied to the opposition,
Resp't's Reply, ECF No. 22, and then proceeded to
submit to the court a number of additional filings, including
a “preliminary response” to the
petition, in which it raised for the first time: (1) defenses
under Article V of the New York Convention, see
Resp't's Prelim. Resp., ECF No. 23; and (2) a
declaration of a Ghanaian attorney, opining on Ghanaian law,
Decl. of Anthony Akoto Ampaw, ECF No. 24 [hereinafter Ampaw
Decl.]. Respondent also filed a notice concerning two foreign
judgments entered against Balkan Ghana in the High Court of
Ghana. Resp't's Notice of Foreign Garnishment Order
& Foreign J., ECF No. 32. Petitioners responded to only
two of these filings and did not respond to the defenses
raised by Respondent under the New York Convention.
See Pet'rs' Resp. to Notice of Suppl. Auth.,
ECF No. 28; Pet'rs' Resp. to Ghana's Notice of
Foreign Garnishment & J., ECF No. 34.
dubiousness of Ghana's procedural maneuvering aside,
court at oral argument presented Petitioners with the option
to submit additional briefing before the court ruled on the
arguments raised in Ghana's additional filings. Hr'g
Tr., ECF No. 35, at 3-6. Counsel for Petitioners declined,
citing Petitioners' desire for a summary resolution of
the Petition as contemplated by the Federal Arbitration Act.
Id. at 5.
issues raised in the Petition, the Motion to Dismiss, and the
Preliminary Response to the Petition are therefore ripe for
York Convention, which is incorporated in the Federal
Arbitration Act (“FAA”), see 9 U.S.C.
§§ 201-208, “is a multilateral treaty that,
with exceptions, obligates participating countries to honor
international commercial arbitration agreements and to
recognize and enforce arbitral awards rendered pursuant to
such agreements.” Enron Nigeria Power Holding Ltd.
v. Fed. Republic of Nigeria, 844 F.3d 281, 283 (D.C.
D.C. Circuit has recognized, “[c]onsistent with the
‘emphatic federal policy in favor of arbitral dispute
resolution' recognized by the Supreme Court[, ] . . . the
FAA affords the district court little discretion in refusing
or deferring enforcement of foreign arbitral awards.”
Belize Soc. Dev. Ltd. v. Gov't of Belize, 668
F.3d 724, 727 (D.C. Cir. 2012) (quoting Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614,
631 (1985)). Courts “may refuse to enforce the award
[under the New York Convention] only on the grounds
explicitly set forth in Article V of the Convention.”
TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d
928, 935 (D.C. Cir. 2007) (quoting Yusuf Ahmed Alghanim
& Sons v. Toys “R” Us, Inc., 126 F.3d
15, 23 (2d Cir. 1997)); see 9 U.S.C. § 207
(providing that the reviewing court “shall
confirm the award unless it finds one of the grounds for
refusal or deferral of recognition or enforcement of the
award specified in the . . . Convention” (emphasis
added)). Because “the New York Convention provides only
several narrow circumstances when a court may deny
confirmation of an arbitral award, confirmation proceedings
are generally summary in nature.” Int'l Trading
& Indus. Inv. Co. v. DynCorp Aerospace Tech., 763
F.Supp.2d 12, 20 (D.D.C. 2011).
advances four arguments in support of dismissing and/or
denying the Petition. First, it asserts that this court lacks
subject-matter jurisdiction because Ghana is entitled to
immunity under the Foreign Sovereign Immunities Act
(“FSIA”). Second, Ghana contends that, even if
this court has jurisdiction over this action, dismissal is
appropriate under the doctrine of forum non
conveniens because Ghana is the better forum in which to
resolve the dispute. Third, Ghana maintains that neither
Petitioner has standing to bring the Petition because the
assignment of the Award from Balkan Ghana to Balkan UK was
invalid. And finally, Ghana asserts that confirmation of the
petition should be denied because various defenses under the
New York Convention apply. The court addresses each argument
Subject Matter Jurisdiction under the Foreign ...