DC Court rejects enforcement of $44 Million award against Liberia

GSS applied for the recognition of the London award in DC courts in 2009 and 2012. The court dismissed both applications, GSS appealed the decisions.The court dismissed the application for reasons including GSS’s failure to prove that the Liberian government was in fact responsible for the Port Authority’s cancelation of the contract and that the Port Authority was a government entity and not a private company.

In 2005, the Port Authority of the Republic of Liberia awarded GSS a multi-million-dollar contract to build a container park at the Port.However, the Port Authority did not award the contract through open and competitive method and petitioned the commission for a single source exception. This was granted in August of 2005. The parties then renegotiated the contract.

After it was announced, international experts expressed concern in the validity and some of the monetary clauses of the contract. In January 2006, the Port Authority informed GSS in a letter that it has single handedly canceled the contract. In March 2006, GSS invoked the arbitration clause of the contract which outlined that arbitration should be in London in accordance with English Law.

Meanwhile, a separate Liberian governmental organization—the Liberian Public Procurement and Concession Commission —sought a Liberian-court declaration that the contract, including the arbitration provision, was invalid. Because of the Liberian judicial proceedings, the Port Authority declined to participate in the London arbitration and GSS appointed the sole arbitrator. In February 2008, the Liberian court found the relevant portions of the contract unenforceable. Notwithstanding the Liberian court’s decision, one month later, the arbitrator determined that he had jurisdiction of the dispute; in June 2008, he concluded that the Port Authority was liable for the cancellation and in May 2009, he found that GSS suffered damages in the amount of $44,347,260.00.

GSS Group Ltd. is represented by DLA Piper.

The Republic of Liberia is represented Hogan Lovells.

The full decision can be accessed here.

Source: iarbafrica

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