Following a default in payment of a $165 million arbitration award against the University of Ghana, Global insurer, Chubb Ltd. has asked a federal judge in New York to confirm the arbitration award which was made in 2018.
The petition filed by Chubb Ltd., indicates that the University wrongfully terminated its contract with Africa Integras LLC, a partner of W.P. Carey Investment trust in 2018, in a flagship development partnership which was backed by the United States government.
The case is titled: Ace American Insurance Company v. University of Ghana, with case number 1:21-cv-06472, in the U.S. District Court for the Southern District of New York.
Ghana’s premier University signed an agreement with Africa Integras LLC to construct and maintain four new facilities and a dormitory on its campus.
The award of the contract reflected the value of rent income that the new campus facilities would have generated.
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.
According to press releases by the university, the above facility expansion would help attract and accommodate Ph.D. students, transforming the school into a first-class research institution.
The University of Ghana however was unable to procure a contractually required letter of credit. Thus moved to terminate the contract, triggering arbitration in 2018.
The W.P. Carey trust settled with Chubb, the Global insurer for $45.6 million later the same year, which is $10 million more than what it spent on the project. Thus transferring its right to collect tenant default damages, according to company financial records.
Although the agreement is said to have been terminated due to the university’s failure to procure a letter of credit, the deal appeared to go sour earlier, when a new vice chancellor took office and openly voiced his opposition to the contract in a series of inflammatory letters and statements to the press.
According to Africa Integras, its outfit had already poured tens of millions of dollars into the project expansion, which was only a year away from completion.
The Founder and Managing Principal of Africa Integras LLC, Andrea Pizziconi indicated that the vice chancellor of the university at the time; Prof. Ebenezer Owusu was “actually offered several options to obtain the letter of credit.
However, he refused against the strong advice of his own advisers.
Pizziconi further noted that the VC’s actions seemed personally motivated as even the Ghanaian government, at the time, attempted to intervene to avoid the disastrous termination of the project that ensued.
In a 2019 press release, the university denied being subject to any arbitration award.
The project was expected to have expanded the university’s facilities by 60% and admission to at least 20,000 additional Ghanaian students.
The University of Ghana did not immediately respond to requests for comment as well as counsel for Chubb.
Chubb, a global insurer indicated on Thursday in its petition that, the court has no basis to refuse confirmation of the award, which falls under the New York Convention.