UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
_________________________________________ ) BALKAN ENERGY LIMITED, et al., ) ) Petitioners, ) ) v. ) Case No. 17-cv-00584 (APM) ) REPUBLIC OF GHANA, ) ) Respondent. ) _________________________________________ )
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
Petitioners 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”).
For the 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.
II. BACKGROUND
A. Factual Background
Faced 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.
Article 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,”
2 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.
After 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.
3 An arbitral tribunal was constituted on April 1, 2010. Pet., Ex. B, ECF No. 1-3 [hereinafter Interim
Award], ¶ 7.
On June 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.
Meanwhile, 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.”
4 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.
The 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
5 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
No. 1-11.
On 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. 1 See Pet., Ex. I,
ECF No. 1-10 [hereinafter Deed of Assignment].
B. Procedural Background
On 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
1 Prior to this assignment, on January 1, 2010, Balkan Ghana and Balkan UK agreed to an interest in claim assignment by which Balkan UK acquired the right to 95% of any recovery from the arbitration in return for an agreement to pay the costs and expenses of arbitration. See Pet., Ex. H, ECF No. 1-9.
6 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.
The dubiousness of Ghana’s procedural maneuvering aside, 2 the 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.
The issues raised in the Petition, the Motion to Dismiss, and the Preliminary Response to
the Petition are therefore ripe for consideration.
III. LEGAL STANDARD
The New 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. Cir. 2016).
As the 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
2 “[M]otions to enforce arbitral awards should proceed under motions practice.” TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 940 (D.C. Cir. 2007); see 9 U.S.C. § 6 (providing that an application to confirm an arbitral award “shall be made and heard in the manner provided by law for the making and hearing of motions”). Accordingly, in this court’s view, Ghana should have included all arguments and supporting affidavits for denial of the Petition in its response to the Petition, rather than submitting them in piecemeal fashion.
7 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).
IV. DISCUSSION
Ghana 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 in turn.
A. Subject Matter Jurisdiction under the Foreign Sovereign Immunities Act
The FSIA is “the sole basis for obtaining jurisdiction over a foreign state in the courts of
the [United States].” Belize Soc. Dev. Ltd. v. Gov’t of Belize (“Belize Soc. Dev. II”), 794 F.3d 99,
101 (D.C. Cir. 2015) (quoting Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428,
8 443 (1989)). Pursuant to the FSIA, “a foreign state is presumptively immune from the jurisdiction
of the United States courts[,] unless a specified exception applies.” Saudi Arabia v. Nelson, 507
U.S. 349, 355 (1993). Because “subject matter jurisdiction in any such action depends on the
existence of one of the specified exceptions to foreign sovereign immunity” laid out in the FSIA,
as a “threshold” matter in every action against a foreign state, a district court “must satisfy itself
that one of the exceptions applies.” Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 493–
94 (1983); see 28 U.S.C. § 1605(a). Under the FSIA, “the defendant bears the burden of proving
that the plaintiff’s allegations do not bring its case within a statutory exception to immunity.”
Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000).
As relevant here, under what is commonly known as the “arbitration exception,” the FSIA
provides an exception to foreign sovereign immunity in suits:
in which the action is brought[ ] either to enforce an agreement made by the foreign state with or for the benefit of a private party to submit to arbitration all or any differences which have arisen or which may arise between the parties with respect to a defined legal relationship . . . or to confirm an award made pursuant to such an agreement to arbitrate, if . . . (B) the agreement or award is or may be governed by a treaty or other international agreement in force for the United States calling for the recognition and enforcement of arbitral awards.
28 U.S.C. § 1605(a)(6). 3 This arbitration exception “by its terms” applies to actions to confirm
arbitration awards under the New York Convention. Creighton Ltd. v. Gov’t of the State of Qatar,
181 F.3d 118, 123 (D.C. Cir. 1999). In this case, because the Award was made in The Hague,
Netherlands, and enforcement is sought in the United States—both signatories to the New York
Convention—the Award on the Merits is governed by the Convention. See Chevron Corp. v.
Republic of Ecuador (“Chevron Corp. I”), 949 F. Supp. 2d 57, 62 (D.D.C. 2013) (“Because the
3 Petitioners also assert that the FSIA’s waiver exception, 28 U.S.C. § 1605(a)(1), confers subject-matter jurisdiction over this matter, but the court need not reach that question in light of its decision that the arbitration exception applies.
9 arbitration in this matter was conducted at The Hague and the Netherlands is a party to the New
York Convention, the Final Award here is governed by the Convention.”), aff’d, 795 F.3d 200
(D.C. Cir. 2015). The court thus finds that the FSIA’s arbitration exception applies in this case.
Each of Ghana’s arguments against exercising subject-matter jurisdiction under
Section 1605(a)(6) is unavailing. Ghana asserts that the FSIA’s arbitration exception cannot apply
for two primary reasons: (1) the arbitration agreement is itself invalid under Ghanaian law, and
(2) a threshold question to award confirmation is determining the validity of the assignment of the
Award to Balkan UK, but the arbitration exception does not confer subject-matter jurisdiction to
make that predicate assessment. The court addresses those assertions in turn.
1. Validity of the Arbitration Clause
Relying on Ghanaian law, Ghana argues that Section 1605(a)(6) does not apply here
because the arbitration agreement is itself invalid. In Ghana’s view, the arbitration clause is not
severable from the PPA, and because the PPA was never approved by the Ghanaian Parliament,
the government official who entered into the PPA—and the arbitration agreement contained
therein—lacked the authority to do so. According to Ghana, the arbitration clause therefore was
not “made by the foreign state” for purposes of the arbitration exception. Resp’t’s Reply at 4;
Ampaw Decl. ¶ 2.
Ghana’s position, however, is squarely foreclosed by authority from this Circuit. In Belize
Social Development II, the D.C. Circuit faced a similar argument concerning the purported
invalidity of an arbitration clause as a threshold subject-matter jurisdiction issue. See 794 F.3d 99,
102 (D.C. Cir. 2015). There, the Government of Belize argued that its former Prime Minister
lacked actual authority to enter into the agreement that contained the arbitration clause and, as a
result, “the agreement, including the arbitration provision, [wa]s void.” Id. The D.C. Circuit
10 rejected that argument based on a plain reading of the FSIA itself: “The language of the FSIA
arbitration exception makes clear that the agreement to arbitrate is severable from the underlying
contract.” Id.; see also id. at 103 (“More briefly put, this case turns on the proposition that Belize
entered two agreements: the Accommodation Agreement and the Agreement to Submit to
Arbitration, albeit the two were entered simultaneously.”). Thus, to avoid jurisdiction under the
arbitration exception, the court observed, Belize could not prevail by showing that the underlying
agreement was invalid. Rather, it would have to establish that the Prime Minister lacked the
authority to enter into the arbitration agreement itself. Id. at 102–03.
As did the Government of Belize, Ghana seeks to avoid subject-matter jurisdiction under
the arbitration exception solely by attacking the validity of the PPA. This it cannot do. Under
Belize Social Development II, the critical question is not whether the underlying agreement is valid,
but whether the arbitration agreement itself is invalid. Thus, Ghana’s contention that the
government official who signed the PPA lacked contracting authority because he did not first
secure parliamentary authorization does not allow it to evade jurisdiction under the arbitration
exception of the FSIA.
Ghana asserts that Belize Social Development II is distinguishable because, unlike the
Government of Belize, Ghana has provided an expert opinion establishing that the arbitration
clause itself is invalid under Ghanaian law. But, upon closer inspection, the expert opinion—
which relies chiefly on the Ghana Supreme Court’s decision in The Attorney General v. Balkan
Energy Ghana Ltd.—solely challenges the validity of the PPA, and not the agreement to arbitrate.
According to Ghana’s expert, “an arbitration clause found in an international agreement governed
by Article 181 is not severable from the international agreement and is invalid if the international
agreement was not approved by Parliament.” Ampaw Decl. ¶ 8. In his view, because the Ghana
11 Supreme Court held that the PPA was an “international business or economic transaction” that
required parliamentary approval, and because the arbitration clause is not severable from the PPA,
the clause is therefore invalid. Stated differently, Ghana’s expert challenges the validity of the
arbitration clause solely by reference to the invalidity of the PPA. See generally Ampaw Decl.
Such “invalid agreement ergo invalid arbitration clause” logic has already been rejected by the
D.C. Circuit. Belize Soc. Dev. II, 794 F.3d at 102–03. The court cannot depart from that precedent.
The court could stop its analysis here, but in the interest of completeness addresses the
argument that Ghana does not expressly make—that the agreement to arbitrate is itself invalid. 4
“[I]f a contract contains a general choice of law clause and provides in the arbitral clause that
arbitration is to be held in a country with a different law, the latter indication must be deemed to
prevail over the former.” Albert Jan van den Berg, The New York Arbitration Convention of 1958:
Towards a Uniform Judicial Interpretation 293 (1981). In this case, because the parties designated
in the arbitral clause that The Hague, Netherlands was to serve as the seat of arbitration, Dutch law
supplied the law applicable to the arbitration agreement. See Jay E. Genig, International
Commercial Arbitration § 7.2 (January 2018 update) (“In the absence of any express choice
[regarding the law applicable to the arbitration agreement], the applicable law is generally the law
of the seat of arbitration.”); cf. Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara, 364 F.3d 274, 291 (5th Cir. 2004) (“Under the New York Convention, an
agreement specifying the place of the arbitration creates a presumption that the procedural law of
that place applies to the arbitration.”). That is precisely what the arbitral tribunal held. See Interim
Award ¶¶ 152, 154. Ghana offers no argument as to why the arbitration agreement is invalid under
4 The court addresses this issue because portions of Ghana’s pleadings, liberally construed, could be understood to make the argument that the arbitration agreement is invalid, irrespective of the validity of the PPA.
12 Dutch law. Its failure to address the law that governs the arbitration agreement therefore defeats
any assertion that the agreement is invalid. See Belize Soc. Dev. II, 794 F.3d at 102–03.
Ghana’s challenge to the arbitration agreement proceeds from the assumption that, because
the parties chose Ghanaian law to govern the PPA, Ghanaian law also governs the arbitration
clause. As already discussed, that view of the law is wrong. But even if the court were to consider
Ghanaian law in assessing the validity of the arbitration clause, Respondent’s arguments would
still fail because they are based on a misreading of the Supreme Court of Ghana’s decision in The
Attorney General v. Balkan Energy Ghana Ltd. Contrary to Respondent’s reading, the Supreme
Court of Ghana held that the arbitration provision was not an “international business or economic
transaction” that required Parliament’s approval under Article 181(5) of the Constitution. Ghana
Sup. Ct. Decision at 40–41. Notwithstanding the significance of this legal holding, Ghana’s expert
makes much of the language following it—wherein the court noted its “difficulty in conceiving of
[the arbitration clause] as a transaction separate and independent from the transaction that has
generated the dispute it is required to resolve.” Id. at 41. Based on that passage, Ghana’s expert
concludes that the arbitration clause is not severable from the PPA, and therefore, invalid because
the PPA was not approved by the Parliament.
This court is unpersuaded by Ampaw’s skewed reading of the Ghanaian Supreme Court’s
decision. 5 In interpreting the decision, Ampaw conveniently excludes from his block quotation of
the Supreme Court’s opinion the very first line of the paragraph announcing the pertinent holding:
5 Pursuant to Federal Rule of Civil Procedure 44.1, when determining the law of a foreign jurisdiction, this court may “consider any relevant material or source.” Fed. R. Civ. P. 44.1. “Most often, foreign law is established through written or oral expert testimony accompanied by extracts from foreign legal material.” Estate of Botvin ex rel. Ellis v. Islamic Republic of Iran, 772 F. Supp. 2d 218, 228 (D.D.C. 2011). Though such expert testimony aids the court in determining the content of the law, the court “need not uncritically accept such expert testimony and may ‘engage in its own research or reexamine and amplify material that has been presented by counsel in partisan fashion.’” Id. (quoting Fed. R. Civ. P. 44.1 advisory committee’s note). Consistent with this authority, the court conducts its own review of the Ghanaian Supreme Court decision.
13 “On the other hand, the answer to the second issue referred is that 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) of the Constitution.” Compare Ampaw Decl. ¶ 4, with Ghana
Sup. Ct. Decision at 41. The Supreme Court’s reference to the “second issue referred” is to the
question: “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. And, the court’s use of the phrase “on the
other hand” signals a clear pivot from its earlier holding that the PPA itself was subject to Article
181(5) approval. Thus, read in context, the Supreme Court of Ghana reached the unmistakable
conclusion that, under Ghanaian law, the arbitration agreement did not require parliamentary
approval and thus was valid. 6
In sum, Ghana has not offered any evidence that the arbitration agreement itself is invalid
under the law of the Netherlands, or even under the law of Ghana. Its effort to avoid subject-
matter jurisdiction based on the invalidity of the arbitration agreement therefore fails.
2. Effect of the Assignment on Subject-Matter Jurisdiction
Ghana’s next argument hinges on the assignment of the Award by Balkan Ghana to Balkan
UK. Ghana’s argument is specific as to each Petitioner. As to Balkan Ghana, Respondent insists
that the Ghanaian company cannot invoke the FSIA’s arbitration exception because, by virtue of
the assignment and its filings in this court, it has “judicially admitted” that it has no rights in the
6 The court also rejects Ampaw’s reading for other reasons. For one, the Supreme Court of Ghana was not engaging in a contractual legal analysis of the severability of the arbitration clause from the PPA that contained it. Rather, the court was elaborating on the legal conclusion it did reach—that the arbitration clause did not need parliamentary approval—by explaining that such a clause cannot be “by itself an autonomous transaction commercial in nature which pertains to or impacts on the wealth and resources of the country.” Id. at 41. The court’s reading of the decision is further bolstered by the fact that the 2010 Alternative Dispute Resolution Act of Ghana considers arbitration agreements to be severable from the agreements that contain them. See Pet’rs’ Notice of Foreign Law Auth., ECF No. 29, Ex. B, § 3(1). It is doubtful that the Supreme Court of Ghana purported to reach the conclusion advanced by Respondent without addressing this statutory authority or even mentioning it.
14 Award. As to Balkan UK, Respondent asserts that its capacity to enforce the Award is dependent
on the predicate question of the assignment’s validity and, as to that threshold question, the FSIA’s
arbitration exception does not confer subject-matter jurisdiction. Resp’t’s Mem. at 4–7, 8–10. The
court does not address Respondent’s argument as to Balkan Ghana, because it concludes that
Balkan UK’s claim to enforce the Award is sufficient to secure jurisdiction under the arbitration
exception.
Nothing in Section 1605(a)(6) requires a court to resolve whether an arbitration award was
validly assigned as a necessary precondition to recognizing subject-matter jurisdiction under the
arbitration exception. The Government of Belize made the same argument that Ghana does now
to the district court in Belize Social Development, and the district court rejected it. Belize Soc.
Dev. Ltd. v. Gov’t of Belize (“Belize Soc. Dev. I”), 5 F. Supp. 3d 25, 34 n.8 (D.D.C. 2013), aff’d,
Belize Soc. Dev. II, 749 F.3d 99 (D.C. Cir. 2015). As was true there, Respondent in this case “cites
no case . . . in which a foreign state’s amenability to suit under the FSIA turns on the validity of
an assignment to the plaintiff.” Id.; see Blue Ridge Invs., LLC v. Republic of Argentina, 902
F. Supp. 2d 367, 375 n.7 (S.D.N.Y. 2012) (“Nothing in the plain language of [Section 1605(a)(6)]
suggests that an action ‘to confirm an award made pursuant to . . . an agreement to arbitrate’ must
be brought by the party that entered into the arbitration agreement with the foreign state.” (quoting
28 U.S.C. § 1605(a)(6)), aff’d, 735 F.3d 72 (2d Cir. 2013). Thus, the question of the assignment’s
validity presents no jurisdictional impediment.
Accordingly, the court is satisfied that the FSIA’s arbitration exception applies in this case;
Ghana therefore does not enjoy sovereign immunity from this enforcement action.
15 B. Forum Non Conveniens
Ghana next argues that the Petition should be dismissed on forum non conveniens grounds,
because “Ghana is an adequate alternative forum and the private and public factors favor the
Ghanaian judicial forum.” Resp’t’s Mot., Mem. in Support of Mot. to Dismiss, ECF No. 17-1
[hereinafter Resp’t’s Mem.], at 2. Under the doctrine of forum non conveniens, “a court must
decide (1) whether an adequate alternative forum for the dispute is available and, if so, (2) whether
a balancing of private and public interest factors strongly favors dismissal.” Agudas Chaisdei
Chabad of U.S. v. Russian Fed’n, 528 F.3d 934, 950 (D.C. Cir. 2008) (citing Paper Aircraft Co.
v. Reyno, 4534 U.S. 235, 255 n.22 (1981)). The court need not apply this test, however, because
Ghana’s argument is squarely foreclosed by TMR Energy Ltd. v. State Prop. Fund of Ukraine, 411
F.3d 293, 303 (D.C. Cir. 2005).
In TMR, the D.C. Circuit held that “the doctrine of forum non conveniens does not apply
to actions in the United States to enforce arbitral awards against foreign nations.” BCB Holdings
Ltd. v. Gov’t of Belize, 650 F. App’x 17, 19 (D.C. Cir. 2016) (citing TMR, 411 F.3d at 303–04).
This is because “only a court of the United States (or of one of them) may attach the commercial
property of a foreign nation located in the United States,” rendering alternative forums inadequate.
TMR, 411 F.3d at 303. Notwithstanding this authority, Ghana invites this court to depart from
binding precedent because it interprets the Supreme Court’s decision in Sinochem International
Co. v. Malaysia International Shipping Corp., 549 U.S. 422 (2007), to overrule TMR. The court
declines the invitation. Counsel for Ghana have pressed this exact argument to the D.C. Circuit
on other occasions, e.g., Pet’rs’ Opp’n at 13–14 (citing counsel’s briefing in other cases before the
D.C. Circuit urging departure from TMR in light of Sinochem), but to no avail. The D.C. Circuit
continues to apply TMR, and so too must this court. See Belize Soc. Dev. II, 794 F.3d at 105
16 (rejecting respondent’s request to revisit the forum non conveniens issue, where the “argument[ ]
w[as] adequately discussed and rejected by the district court, and [did not] warrant further
exposition by this Court”); BCB Holdings, 650 F. App’x at 19 (holding that Belize’s argument that
the action should have been dismissed on forum non conveniens grounds “is squarely foreclosed
by our precedent” (citing TMR Energy, 411 F.3d at 296)); see also BCB Holdings Ltd. v. Gov’t of
Belize, 232 F. Supp. 3d 28, 45 (D.D.C. 2017) (holding that TMR and Sinochem are “not in
conflict”). The court therefore rejects Ghana’s forum non conveniens argument.
C. Standing
Ghana takes the puzzling position that neither Petitioner has standing to enforce the Award.
According to Ghana, Balkan UK lacks standing to enforce the Award because the assignment
agreement is invalid. Ghana challenges the assignment both under Ghanaian law and under the
terms of the PPA. Moreover, Ghana maintains that Balkan Ghana also lacks standing because, by
assigning its rights to Balkan UK, Balkan Ghana “relinquished any rights to confirm the award.”
Resp’t’s Mem. at 10. The court is unpersuaded by these arguments and concludes that Balkan UK
has standing to seek confirmation and enforcement of the Award.
To begin with, the assignment agreement between Balkan UK and Balkan Ghana contains
a clear choice-of-law clause, providing that “[t]his Deed [of Assignment] and any dispute or claim
(including non-contractual disputes or claims) arising out of or in connection with it or its subject
matter or formation shall be governed by and construed in accordance with the law of England and
Wales.” Deed of Assignment ¶ 6. Ghana offers little to sway the court from honoring the parties’
choice of law, beyond assertions of its Ghanaian legal expert that because the PPA is governed by
Ghanaian law and because the Award “affects the contractual obligations of the Republic of Ghana
under the PPA, any assignment would be governed by Ghanaian law.” Ampaw Decl. ¶¶ 17–18.
17 Ghana’s expert, however, offers no explanation for how Ghanaian law could possibly operate to
overcome the chosen law of the parties to a separate assignment agreement. The expert’s
conclusory assertion does not warrant deviation from the general principle that courts “favor[]
application of the law that the parties to a contract agreed would apply.” Belize Soc. Dev. I,
5 F. Supp. 3d at 36 n.4 (reviewing cases and applying English law to determine the validity of an
assignment that “[b]y its own terms” was to be governed by English law). The court therefore
applies English law to assess the validity of the assignment.7
To that end, Petitioners provide the expert legal opinion of an English solicitor, James
Samuel George Hargrove. See Pet’rs’ Opp’n, Decl. of James Samuel George Hargrove, ECF No.
19-1 [hereinafter Hargrove Decl.]. Hargrove explains that, under English law, “[t]he Deed of
Assignment satisfies the requirements for a legal/statutory assignment” and that, accordingly,
“Balkan [Energy] acquired the legal right to [the Award] with a legal remedy for its recovery and
the power to give a good discharge,” meaning that “Balkan [Energy] is entitled to bring
proceedings in its own name.” Hargrove Decl., Legal Op., ECF No. 19-2 [hereinafter Hargrove
Legal Op.], at 3–4. Petitioners’ expert legal opinion is effectively uncontested by Ghana, as Ghana
has not provided an expert opinion assessing the assignment under English law. The court
therefore finds that the assignment is valid under English law.
Ghana’s argument that the terms of the PPA bars the assignment is equally unconvincing.
The PPA provides that “[n]either Party may assign nor transfer all or any part of its rights, benefits,
or obligations hereunder without the written consent of the other Party.” PPA art. 19. Based on
7 The court is likewise unpersuaded by Ghana’s suggestion that “English law is irrelevant, because there was no legal nexus between English law and the arbitration.” Resp’t’s Resp. at 13. Contrary to Respondent’s reading of Belize Social Development I, the district court did not apply English law to determine the validity of the assignment “because the arbitral seat was . . . in London.” Id. Instead, as the court clearly explained, it honored the parties’ choice-of-law clause contained in the assignment agreement. 5 F. Supp. 3d at 36. The court therefore rejects Respondent’s unsupported contention that such a “nexus” is required before applying the law chosen by the parties to govern an assignment.
18 that provision, Ghana maintains that the assignment was invalid because Ghana did not consent to
it. That contention fails for two reasons. First, the arbitral tribunal terminated the PPA when it
rendered its Award on the Merits in April 2014, before Balkan Ghana assigned its rights in the
Award to Balkan UK in August 2016. See Award on the Merits ¶ 642; Deed of Assignment. Thus,
because the PPA was void on the date of the assignment, there was no right of refusal for Ghana
to exercise under the PPA. Second, the court accepts the uncontested legal opinion of Hargrove,
who concludes that, under English law, “the Award[] created new rights, superseding the causes
of action arising out [of] the breach of the PPA.” Hargrove Legal Op. at 4–5. Thus, under the law
applicable to the assignment, Balkan Ghana need not have obtained Ghana’s written consent
before assigning its rights to the Award.
Finally, in its Preliminary Response to the Petition, Ghana requests “leave to conduct
limited discovery to obtain documents from and take depositions of both Petitioners on the issue
of the validity and effect of the assignment.” Resp’t’s Prelim. Resp. at 14–15. In the interest of
ensuring that this enforcement proceeding remain “summary” in nature, TermoRio S.A., 487 F.3d
at 940, the court declines Ghana’s demand for discovery.
In sum, the court concludes that Balkan Ghana legally assigned its rights in the Award to
Balkan UK and therefore Balkan UK has standing to bring this enforcement action under the New
York Convention.
D. Ghana’s Defenses Under the New York Convention
The court turns next to the grounds raised by Ghana under Article V of the New York
Convention, which sets forth the only grounds available for setting aside an arbitral award. See
TermoRio, 487 F.3d at 933. “[T]he burden of establishing the requisite factual predicate to deny
confirmation of an arbitral award rests with the party resisting confirmation . . . and ‘[t]he showing
19 required to avoid summary confirmation is high.’” Int’l Trading & Indus. Inv. Co., 763 F. Supp.
2d at 20 (quoting Ottley v. Schwartzberg, 819 F.2d 373, 376 (2d Cir. 1987)).
Here, Ghana contends that the Award should be set aside for three reasons: (1) the
arbitration agreement is invalid under Ghanaian law; (2) the parties did not agree to submit the
question of the validity of the arbitration clause to the arbitral tribunal; and (3) recognition of the
Award would be contrary to the public policy of the United States. None of these arguments
supplies a defense to confirmation of the Award.
1. Article V(1)(a): Invalidity of Arbitration Agreement
Article V(1)(a) of the Convention allows a court to refuse recognition and enforcement if
the arbitration “agreement is not valid under the law to which the parties have subjected it or,
failing any indication thereon, under the law of the country where the award was made.” New
York Convention, art. V(1)(a). Ghana’s primary objection to confirmation of the Award under
Article V(1)(a) is that, under the laws of Ghana, the arbitration agreement is invalid because it is
not severable from the PPA and therefore must have been approved by the Ghanaian Parliament
in accordance with the 1992 Ghana Constitution to be effective. That is the same argument Ghana
advanced, and the court rejected, when arguing that the FSIA’s arbitration exception does not
apply in this case. Therefore, for the reasons discussed in Part IV(A), Article V(1)(a) does not
provide a ground to deny the Petition.
2. Article V(1)(c): Arbitrability
Ghana next asserts that confirmation may be denied under Article V(1)(c) of the New York
Convention because “[t]here is no evidence that the parties ‘clearly and unmistakably’ agreed to
submit the question of the validity of the arbitration clause to the arbitral tribunal.” Resp’t’s
Prelim. Resp. at 7 (quoting Crystallex Int’l Corp. v. Bolivarian Republic of Venezuela, 244
20 F. Supp. 3d 100, 111–12 (D.D.C. 2017)). According to Ghana, determining the validity of the
arbitration clause lies within the exclusive jurisdiction of the Supreme Court of Ghana, not the
arbitral tribunal. Ghana therefore asserts that confirmation of the Award should be denied because
“[t]he award deals with a difference not contemplated by or not falling within the terms of the
submission to arbitration, or it contains decisions on matters beyond the scope of the submission
to arbitration.” New York Convention, art. V(1)(c).
But Ghana’s reliance on Article V(1)(c) fails because Ghana overlooks the express terms
of its agreement to arbitrate in the PPA. Article 22.2 of the PPA clearly provides that “Arbitration
shall be governed by and conducted in accordance with UNCITRAL [United National
Commission on International Trade Law] rules.” Pursuant to UNCITRAL rules, “[t]he arbitral
tribunal shall have the power to rule on objections that it has no jurisdiction, including any
objections with respect to the existence or validity of the arbitration clause,” and “shall have the
power to determine the existence or the validity of the contract of which an arbitration clause forms
a part.” Chevron Corp. II, 795 F.3d at 207–08 (quoting UNCITRAL Arbitration Rules, G.A. Res.
31/91 art. 21 (Dec. 15, 1976)). In this Circuit, “incorporation of the UNCITRAL Rules provides
clear and unmistakable evidence that the parties intended for the arbitrator to decide questions of
arbitrability.” Chevron Corp. I, 949 F. Supp. 2d at 67 (alterations omitted) (quoting Republic of
Argentina v. BG Group PLC, 665 F.3d 1363, 1371 (D.C. Cir. 2012)). Ghana “therefore consented
to allow the arbitral tribunal to decide issues of arbitrability.” Chevron Corp. II, 795 F.3d at 207–
08. Accordingly, the court rejects Ghana’s challenge under Article V(1)(c).
3. Article V(2)(b): Public Policy
Finally, Ghana urges the court to deny the Petition because “recognition or enforcement of
the award would be contrary to the public policy” of the United States. See New York Convention
21 art. V(2)(b). According to Ghana, enforcing an arbitration award predicated on the PPA’s
arbitration clause—which, as established above, Respondent believes its Supreme Court held to
be violative of the Ghanaian Constitution—violates U.S. policy to afford international comity to
decisions of foreign courts. Resp’t’s Prelim. Resp. at 8–9.
“The public policy defense under Article V(2)(b) of the New York Convention is to be
construed narrowly and is available only where an arbitration award ‘tends clearly to undermine
the public interest, the public confidence in the administration of the law, or security for individual
rights of personal liberty or of private property.’” Enron Nigeria Power Holding, Ltd., 844 F.3d
at 289 (quoting TermoRio S.A., 487 F.3d at 938). “Although this defense is frequently raised, it
has rarely been successful.” BCB Holdings Ltd., 110 F. Supp. 3d at 249 (quoting Ministry of Def.
& Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Def. Systems, Inc., 665
F.3d 1091, 1097 (9th Cir. 2011)).
As discussed, the court disagrees with Respondent’s reading of the Supreme Court of
Ghana’s opinion, and Respondent offers little more than its expert’s unpersuasive gloss on that
holding. Moreover, Ghana cites no authority for the proposition that not affording deference to
the Ghanaian Supreme Court would “violate the [United States’] most basic notions of morality
and justice,” as required to establish a public policy defense. TermoRio S.A., 487 F.3d at 938
(citation omitted). Indeed, in light of the court’s holdings, enforcement in this case would not
“violate any ‘basic notion of morality and justice’ rooted in” the public policy of international
22 comity. BCB Holdings Ltd., 650 F. App’x at 19. Accordingly, the court rejects Ghana’s public
policy defense.
E. Garnishment Order and Judgment
One final issue merits discussion. In the last of its filings with the court, Ghana requests
that this court take notice of: (1) a garnishment order entered by the High Court of Ghana on
October 13, 2017, ordering the Republic of Ghana to pay Zenith Bank Ghana Ltd. up to $44.15
million in funds otherwise owed to Balkan Ghana, and (2) a € 75 million judgment entered by the
High Court of Ghana in favor of Ghana against Balkan Ghana on November 23, 2017. See Resp’t’s
Notice of Foreign Garnishment Order & Foreign J., ECF No. 32. According to Ghana, the
garnishment order compels Ghana to pay any amounts owing under the arbitration award to Balkan
Ghana’s creditor, Zenith Bank Ghana. Id. at 2. Ghana asserts that when the garnishment order
issued, Balkan Ghana “ceased to have title or right to payment pursuant to the arbitration award at
issue in this litigation” because its creditor was awarded, through garnishment, the funds Balkan
Ghana is entitled receive to under the Award. Id. Ghana also asserts that the € 75 million judgment
against Balkan Ghana “for the recovery of damages caused to a barge by Balkan [Ghana]” “more
than offsets the arbitration award at issue in this litigation.” Id. Finally, Respondent offers the
declaration of a Principal State Attorney of Ghana, authenticating the garnishment order and
judgment. See Decl. of Grace Mbrokoh-Ewoal, ECF No. 34.
The court has considered Ghana’s request and declines to take notice of the order and
judgment because doing so will have no effect on the court’s confirmation of the Award. A court
“may refuse to enforce the award only on the grounds explicitly set forth in Article V of the
Convention.” TermoRio S.A., 487 F.3d at 933 (emphasis added); see also 9 U.S.C. § 207. The
only defense that the Ghanaian court judgments could conceivably support arises under Article
23 V(1)(e) of the Convention. But that clause does not apply on its face because the Award “has [not]
been set aside or suspended by a competent authority of the country in which, or under the law of
which, that award was made,”—here, the Netherlands. New York Convention, art. V(1)(e).
Moreover, Ghana fails to explain how the October 2017 garnishment order and the November
2017 judgment have any retroactive effect on the 2016 assignment of the Award to Balkan UK,
which is nowhere referenced in the order and judgment. Thus, the court concludes that these
foreign proceedings provide no reason to deny confirmation of the Award in favor of Balkan UK.
V. AWARD AND ORDER
Consistent with the practice of other courts in similar confirmation proceedings, to the
extent prejudgment interest is not already reflected in Petitioners’ claim calculation, see Pet., Ex.
J, ECF No. 1-11, the Award shall include such interest from July 1, 2009, until the date of payment.
See Belize Bank Ltd. v. Gov’t of Belize, 191 F. Supp. 3d 26, 40 (D.D.C. 2016). Petitioners shall
submit to the court a proposed judgment amount with all interest calculations performed no later
than April 6, 2018, as well as a draft order of final judgment.
VI. CONCLUSION
For the foregoing reasons, the court grants the Petition to Confirm Arbitral Award against
Respondent Republic of Ghana in favor of Balkan UK and denies the Republic of Ghana’s Motion
to Dismiss Petition.
Dated: March 22, 2018 Amit P. Mehta United States District Judge