The University of Ghana has been slapped by United States Federal Court with $165 million judgement debt for wrongly terminating the Africa Integras Contract in 2018.
This was after Global insurer Chubb Ltd. asked a New York federal judge to confirm a $165 million arbitration award against the University after it defaulted on a flagship development partnership backed by the U.S. government.
According to the 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 an agreement to construct and maintain four new facilities and a dormitory on its campus.
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. 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. University press releases said the expansion would help attract and accommodate Ph.D. students, transforming the school into a first-class research institution.
But UG 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.