An American insurance company has filed a petition in a New York court to recover a US$165 million arbitration award against the University of Ghana (UG) over the termination of a contract for CPA Integras Ghana Limited (Africa Integras) to construct new buildings.

ACE American Insurance Company was assigned all rights to recover the award by Africa Integras which terminated the construction contract after the university failed to obtain a letter of credit (L/C) as stipulated in the contractual agreement.

The university says it will vigorously defend its position and contest the petition before all appropriate forums, including arbitration in the New York courts, and is confident that it would prevail and the petition would be dismissed.

No L/C obtained

In 2015 Africa Integras was contracted by UG to construct four new academic buildings and 1,000 student hostel beds. But the company in May 2018 delivered a termination notice of the contract, saying the university had failed to obtain an L/C as stipulated in the contractual agreement.

The parties then agreed to decide a termination value which the petitioner says was based on the university defaulting on its contractual obligations and that the parties agreed to appoint independent experts to calculate the termination value which the insurer claims will be final and binding.

Claims and counter-claims

The petitioner claims three independent experts were proposed to determine the termination value and ACE says the university of Ghana accepted the proposal. The university subsequently objected to the selection of one of the experts.

An arbitration award was nevertheless issued in the UK by a duly appointed and authorised independent expert according to the petition.

The university claims that the petition is an "inaccurate and one-sided" account of the project and is "ill-founded and fundamentally flawed."

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.