West Africa Gas Limited v The Government of the Republic of Ghana (Acting Through the Ministry of Energy) (Formerly the Ministry of Power) - London Court of International Arbitration - LCIA Arbitration No 194422 - Final Award - 15 January 2021
IN THE MATTER OF AN ARBITRATION
UNDER THE RULES OF THE LONDON COURT OF INTERNATIONAL ARBITRATION
(LCIA) ARBITRATION NO: 194422
The Parties and their Representatives
The Arbitration Agreement
The Relevant Terms of the GSA
The Factual Background
Prior to the GSA
After the GSA
The Parties' submissions on the construction of the GSA
GOG's Arguments on Construction
The Tribunal's Analysis and Conclusion on Construction
Principles of Construction
The Issues of Construction
The Recovery Fee
The Legal Issues
The Reference to Buyer's termination in Article 17.4
The Recovery Fee had not Accrued
The Costs Incurred prior to the Execution of the GSA
Recovery for Costs paid by Sahara Companies
Breach of the Reasonable Endeavours Clause
The Quantum of the Costs
The Various Categories of Costs
(7) The Provisional Licence
(8) The FSRU Time Charter
(9) Legal Fees
(10) Financial Advisory Costs
(11) Travel and Accommodation
Costs of Terminating the LNG Supply Agreement
Legal and Arbitration Costs
Legal and Other Costs
1. The dispute arises out of the termination by the Claimant, West Africa Gas Limited (BVI), ("WAGL" or "Claimant") of a Gas Sales Agreement dated 9 October 2015 ("GSA") made between WAGL and the Republic of Ghana ("GoG").
26.1 Resolution of Disputes
26.1.1 Any dispute arising between or among the Parties relating to this Agreement which is not a dispute which shall be determined by an Expert in accordance with Article 27 (a "Dispute") shall (unless the Parties otherwise agree in writing) be finally resolved by arbitration conducted in accordance with the applicable rules of the London Court of International Arbitration.
26.1.2 Pending the resolution of a Dispute in accordance with this Article 26 the Parties shall to the greatest extent possible continue to perform their covenants and obligations in accordance with this Agreement.
26.1.3 Any disputes or disagreement arising out of or in connection with this Agreement shall be settled, if possible, by negotiation between the Parties.
26.2 Commencement of Arbitration
Notwithstanding Article 26.1.3, a Party may at any time give notice to the other Party of the existence of a Dispute (an "Arbitration Notice") and such Arbitration Notice shall set out in reasonable detail the grounds for the Dispute in the opinion of the Party giving the Arbitration Notice.
26.3 Appointment of Arbitrator
The procedure for the appointment of arbitrator shall be as follows:
26.3.1 where the dispute involves two of the Parties to this Agreement (for avoidance of doubt, Buyer and Seller shall be considered one Party each for the purposes of this Article 26.3), each Party shall appoint an arbitrator within fourteen (14) Days after the date of receipt of an Arbitration Notice by the Party to which the Arbitration Notice was given and those arbitrators shall then jointly appoint a third arbitrator within fourteen (14) Days after the date of appointment of the second arbitrator to act as chairman of the arbitral panel;
26.3.2 If either Party fails to appoint an arbitrator or the two arbitrators appointed by the Parties fail to agree on the choice of the third arbitrator, the appointing authority, in accordance with the Rules, shall be the London Court of International Arbitration. The language of the arbitration shall be English.;
26.3.3 The place of arbitration shall be London, United Kingdom.
26.3.4 The cost of the venue of arbitration under this Article 26 and the fees of the arbitration tribunal shall be borne equally by the Parties, unless otherwise specified by the arbitrators in a final award.
26.4 The arbitration award
26.4.1 Any arbitration award rendered in consequence of an arbitration commenced in accordance with this Article 26:
(i) shall be in writing and shall set out in reasonable detail the facts of the Dispute and the reasons for the decisions of the arbitral panel;
(ii) (to the greatest extent possible under applicable law) shall be final and binding on both Parties; and
(iii) shall forthwith be implemented by the Parties.
26.4.2 Any award shall be final, conclusive and binding upon the Parties (such that, to the extent permitted by the law of the seat of arbitration, the Parties shall be taken to have waived any right of appeal or review in respect of the award), and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction (as per the New York Convention of 1958 on Recognition and Enforcement of foreign arbitral awards)."
7. On 21 October 2019, Professor Fidelis Oditah QC SAN and Dorothy Ufot SAN, were appointed by the LCIA as co-arbitrators and Anthony Idigbe SAN as Presiding Arbitrator.
8. On 27 November 2019, the Respondent raised an objection to nationality of both the chair and one of the co-arbitrators. The Claimant provided its comments on 27 November 2019 and the Respondent provided further comments on 3 December 2019.
9. On 5 December 2019, the chair resigned and on 9 December 2019, the LCIA Court decided to maintain the appointment of Ms Ufot and granted the co-arbitrators 14 days to select a replacement arbitrator.
10. On 30 January 2020, pursuant to Article 10.1 of the LCIA Rules, the LCIA Court revoked the appointment of Anthony Idigbe SAN as Presiding Arbitrator and pursuant to Articles 5 and 11 of the LCIA Rules appointed Hilary Heilbron on the joint nomination of the co-arbitrators.
324. In accordance with Article 28.1 of the LCIA Rules the LCIA Court has determined the costs of the arbitration (other than the legal costs of the parties) in the total sum of £ which is made up as follows: -
Registration fee £1,750.00
LCIA Administrative charges £27,211.67
Tribunal's fees and expenses £249,288.18
Total costs of arbitration £278,249.85
325. Towards these costs, WAGL has paid £153,108.88 which includes the Registration fee, deposits lodged, interest accrued, and GoG has paid £125,140.97, which includes deposits lodged and interest accrued. Total deposits lodged by the parties therefore amount to £278,249.85 of which £278,249.85 has been applied to the costs of the arbitration as set out above. There is therefore no surplus to be refunded to the parties by the LCIA.
326. Unlike the Legal and Other Costs, where the issues as to allocation of costs relate to the degree of success, it was necessary for WAGL to commence this arbitration to recover the sums awarded. Thus the Tribunal concludes that liability for the full Arbitration costs should rest with GoG and accordingly WAGL is entitled to be reimbursed the Arbitration Costs it has paid in the sum of £153,108.88.
Accordingly, the Tribunal AWARDS and DECLARES as follows;
i. The Respondent do pay to the Claimant the sum of US$ 68,584,623.37 as the Recovery Fee under the GSA.
ii. The Respondent do pay the Claimant simple interest on the sum awarded in (i) above from 22 April 2019 at the annual rate of 6.5% until payment.
iv. The Respondent do pay the Claimant's Legal and Other Costs in the sum of £200,000.
v. The Respondent do pay the Claimant the Arbitration Costs in the sum of £153,108.88.
v. The Counterclaim is dismissed.
vi. All other claims, including the claim for a declaration and counterclaims are rejected.
Place of Arbitration, London, United Kingdom
Dated: 15 January 2021
Hilary Heilbron QC
Professor Dr Fidelis Oditah QC, SAN
Dorothy Ufot SAN