The University of Ghana has denied media reports that a US court has awarded a judgment debt of $165 million against the school in connection with an erroneously abrogated contract with Africa Integras LLC in 2018.

The school, in a statement, described the reports as “misrepresentations and falsehoods”, adding: “The circumstances of the project and its termination are being falsely represented”.

“Further, the nature of the New York petition has similarly wrongly been described”, the school added.

The statement, signed by the Registrar, Ms Emelia Agyei-Mensah, said, “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, the school insisted.

“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 school noted.

Further, it said: “The New York petition now represents an attempt to avoid setting out and substantiating a proper claim against the university, and avoid the contractually-required arbitration process, by proceeding in an inappropriate forum – the New York courts,” it said.

“The university is confident that it will prevail and that the New York petition will be dismissed,” it noted.

Background

It was widely reported on Thursday that a US court awarded the judgment debt against the school after Global Insurer Chubb Ltd. asked a New York federal judge to confirm the $165 million arbitration award against the university after it defaulted on a US-backed flagship agreement to construct and maintain four new facilities and a dormitory on the campus of the Ghanaian state-run university.

According to a petition filed in the Southern District of New York, W.P Carey investment trust won the award in 2018 after the University of Ghana terminated the deal.

The award reflects the value of rent income that the new campus facilities would have generated, Chubb told the court.

“SEC reports show that the $64 million partnership was signed in 2016, 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”, a Law360 report said.

“The project was insured with a Chubb corporate country risk policy. According to a public information summary filed with OPIC, the project would help meet a demand for higher education in Africa”, it added.

“University press releases said the expansion would help attract and accommodate Ph.D. students, transforming the school into a first-class research institution,” the report noted.

University of Ghana, the initial report said, 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.

The W.P. Carey trust settled with Chubb for $45.6 million later the same year — $10 million more than what it spent on the project — transferring its right to collect tenant default damages, according to company financial records.

The report said 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 a new vice-chancellor 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, Prof 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.

The project would have expanded the university’s facilities by 60%, Pizziconi said.

“As it stands today, I estimate that at least 20,000 additional Ghanaian students were prevented from enrolling at UG because those facilities were not finished,” she said.

The financial default also cast a chill over development projects across the region, “since UG was a flagship project for education public-private partnerships in Africa generally,” Pizziconi added. “This impact exacerbated the losses felt across the continent with so many universities keen to access private finance to address their own infrastructure constraints.”

“Now, to make matters worse, if this claim is not paid, the entire insurance industry will become more reticent to insure key infrastructure projects in Ghana, which will impact the country’s entire development agenda,” she continued. “Also, with an unpaid insurance claim, the U.S. government’s Development Finance Corp. will struggle to proceed in financing other projects in Ghana that require government commitments, which could cost Ghana billions in development financing.”

The University of Ghana did not immediately respond to requests for comment.

Counsel for Chubb declined to comment.

According to Chubb’s petition Thursday, the court has no basis to refuse confirmation of the award, which falls under the New York Convention.

Chubb is represented by Kurt W. Hansson, Joshua M. Bennett and Jonathon C. Drimmer of Paul Hastings LLC.

Counsel information for the University of Ghana was not immediately available.