The long-running international arbitration between Power Distribution Services Ghana Limited (PDS) and the Electricity Company of Ghana (ECG) has ended with a decisive victory for ECG, following a ruling by a London-based Tribunal that dismissed all claims brought by PDS.
The verdict, delivered after nearly three years of legal proceedings, marks a major turning point in one of Ghana’s most controversial power sector disputes — the fallout of the failed concession agreement under the Millennium Challenge Compact. The Tribunal’s ruling affirms ECG’s decision to terminate the PDS concession in 2019 and clears the state-owned utility of all allegations of wrongful conduct.
The arbitration revolved around two key contracts — the Lease and Assignment Agreement (LAA) and the Bulk Supply Agreement (BSA) — both signed on July 3, 2018, between PDS and ECG. These agreements were central to Ghana’s electricity sector reform, which aimed to bring in private sector participation to improve distribution efficiency and service delivery.
Under the deal, PDS was to take over ECG’s operations, distribution assets, and management for 20 years, subject to the fulfillment of certain Conditions Precedent (CPs).
The transfer of operations was formally confirmed through a Transfer Date Confirmation Letter (TDCL), after which PDS began operations in March 2019.
However, within months, the transaction unraveled after questions emerged about the validity of the Payment Guarantees submitted by PDS as part of the financial security requirements of the concession. ECG suspended the agreement, citing fraud concerns, and later terminated it altogether — a decision that led to this high-stakes arbitration in London.
In its statement of claim before the Tribunal, PDS contended that the termination of the concession was unlawful. It maintained that all the required CPs had been satisfied prior to the operational transfer and that ECG’s decision to revoke the agreement violated Section 3.4 of the LAA, which laid out the post-transfer termination procedures, including the payment of a Buy-Out Price to the concessionaire.
PDS demanded compensation for alleged wrongful termination, seeking direct costs of approximately US$39.4 million and lost profits totaling US$351.5 million, plus interest and other reliefs the Tribunal deemed appropriate.
ECG, represented by Cherie Blair KC, Chair of Omnia Strategy LLP, and a team of Ghanaian lawyers led by Godwin Kudzo Tameklo, mounted a strong defence, insisting that the termination was lawful and justified.
ECG argued that PDS had misrepresented the authenticity of the Payment Guarantees that underpinned the concession.
According to ECG, the so-called guarantees — issued by Al Koot Insurance and Reinsurance Company in Qatar — were later discovered to be unauthorised and forged.
Investigations revealed that they were signed by a company official who lacked authority under Qatari law.
The matter was subsequently confirmed by a ruling from the Qatari Court of Cassation, which found the guarantees invalid.
ECG maintained that PDS’s failure to verify the legitimacy of these financial instruments constituted a serious breach of contract and due diligence obligations.
The Ghanaian utility also highlighted that the fraudulent guarantees placed the entire Millennium Challenge Compact at risk, prompting swift government intervention to protect Ghana’s interests.
In its counterclaim, ECG presented two reconciliation scenarios:
If the agreements were found valid, PDS owed ECG US$551 million;
If the agreements were void, PDS still owed ECG US$315.5 million.
ECG’s arguments were bolstered by expert opinions from Ghanaian and Qatari legal authorities and by witness testimonies that detailed the rush to meet compact deadlines and the subsequent discovery of the invalid guarantees.
After reviewing voluminous documentary evidence and hearing testimony over several sessions, the arbitral panel unanimously dismissed all of PDS’s claims. The Tribunal held that ECG’s termination of the concession was justified and found no basis for PDS’s allegations of wrongful conduct or financial loss.
The decision, legal analysts say, vindicates ECG’s long-held position that PDS was entirely responsible for the fraudulent guarantees that led to the collapse of the concession. By dismissing PDS’s claims in their entirety, the Tribunal also paved the way for ECG to proceed with its own counterclaim for sums owed.
“This ruling validates ECG’s actions and confirms that the termination was lawful under the terms of the concession,” a legal expert familiar with the case told this paper. “It also sends a clear message about the importance of transparency and due diligence in high-value public-private transactions.”
ECG’s legal team comprised a blend of international and local expertise. Omnia Strategy LLP, led by Cherie Blair KC, handled international advocacy, while a Ghanaian team coordinated domestic legal strategy and evidence. The combined effort, sources say, ensured that Ghana’s position was effectively represented before the arbitral panel.
The ruling brings closure to one of Ghana’s most significant commercial disputes in recent history — a case that drew public attention for its implications on foreign investment, governance, and power sector reform. The decision is expected to strengthen ECG’s standing as a credible national utility and may open the door for the company to recover substantial sums under its counterclaim.
Beyond Ghana, the outcome of the case is likely to serve as a reference point for future public-private partnerships, especially in Africa’s utility sectors where financial guarantees, due diligence, and risk allocation remain contentious issues.
For Ghana, the Tribunal’s ruling not only absolves ECG of wrongdoing but also underscores the importance of accountability and integrity in managing strategic national assets.
As ECG now turns to the next phase — pursuing its counterclaims and recovering any sums due — the chapter on the PDS concession saga appears finally closed, with the company emerging legally and reputationally vindicated.
