ECG Wins International Arbitration Against PDS as Tribunal Dismisses $390m Claims
The Electricity Company of Ghana (ECG) has secured a significant legal victory in London after an international arbitration tribunal dismissed all claims brought against it by Power Distribution Services Ghana Limited (PDS).
The tribunal’s ruling, which concludes nearly three years of proceedings, puts to rest the long-standing dispute over the termination of the PDS concession agreement—once hailed as a transformative deal for Ghana’s electricity distribution sector.
In 2019, PDS assumed operational control of ECG under a 20-year concession arrangement as part of the Millennium Challenge Compact (MCC) between the Government of Ghana and the Millennium Challenge Corporation (MCC) of the United States.
The concession aimed to inject private-sector efficiency into ECG’s operations and enhance power distribution nationwide. However, the government, through ECG, suspended and later terminated the agreement months after its commencement following revelations that payment guarantees submitted by PDS—issued by Al Koot Insurance and Reinsurance Company of Qatar—were fraudulent.
Despite PDS’s insistence that all contractual obligations were met, investigations confirmed that Al Koot had not authorised the guarantees. The Qatari Court of Cassation subsequently ruled that the documents were forged.
The Arbitration
PDS initiated arbitration proceedings in London, alleging wrongful termination of the concession and claiming direct costs of approximately US$39.4 million, along with alleged lost profits totalling US$351.5 million.
ECG, represented by Omnia Strategy LLP, led by Cherie Blair KC, defended the state utility, arguing that the termination was justified and aligned with Ghana’s national interest. ECG maintained that PDS had failed to conduct due diligence in authenticating the guarantees—a failure that struck at the core of the concession agreement.
Tribunal’s Ruling
After extensive legal arguments and hearings, the tribunal dismissed all claims filed by PDS. It upheld ECG’s position that the fraudulent guarantees fundamentally invalidated the concession and warranted its termination.
The ruling absolves ECG and the Government of Ghana of any liability and affirms the legitimacy of their decision to safeguard public assets in the face of contractual impropriety.
Broader Implications
The decision represents a major legal and financial victory for Ghana, averting potential liabilities exceeding US$390 million. It also marks a pivotal moment in the country’s energy sector, bringing final closure to a controversy that had drawn significant domestic and international scrutiny.
With the dispute now resolved, ECG is expected to refocus on enhancing operational efficiency and improving electricity distribution nationwide.
The outcome, analysts say, reinforces Ghana’s commitment to transparency, due diligence, and accountability in major public-private partnership arrangements.
