University of Ghana Legon has denied being liable to judgment debt of a staggering US$165 million to be coughed up for US-based insurance company, Chubb Ltd.
In a statement released on its official website on Friday, August 6, 2021, the university claims the case has been misrepresented.
“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. Rather, the New York Petition simply represents an initial step directed at commencing proceedings before the New York courts”.
The statement continues that “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 Registrar of the university, Emelia Agyei-Mensah wrote in the statement.
Bacground
Last week global insurer Chubb Ltd confirmed it has asked a New York federal judge to confirm a $165 million arbitration award against the University of Ghana-Legon.
This is because Legon has reportedly defaulted on a flagship development partnership backed by the U.S. government to construct some infrastructure, including hostels on the school’s campus.
According to the petition filed in the Southern District of New York, W.P Carey Investment Trust which Chubb Limited represents won the judgment debt in 2018 after the University of Ghana terminated a US$ 64 million contract agreement to construct and maintain four new facilities.
And now, the judgment debt sought by Chubb Limited reflects the value of rental income that the new campus facilities would have generated, Chubb told the court.
Reports show that the $64 million contract was signed in 2016 during the erstwhile John Maham administration, 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.
The project was insured with a Chubb corporate country risk policy, the project was proposed to help meet demand for higher education in Africa.
The project according to some sources vexed with the contract said, would have helped attract and accommodate Ph.D. students from across the continent and would have transformed Legon into a first-class research institution.
But the University of Ghana 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.
