Two United States of America-based companies are reported to be at each other’s throat over a contract signed with the Volta River Authority in 2002 to supply 85 MW of power to supplement supplies from the Akosombo Dam and the Aboadze Thermal Plant.
The High Court in Accra will on Friday begin hearing of the case in which Lushann International Energy Incorporated is seeking a declaration that the conduct of G.E. Energy Rentals amounted to a breach of contract.
According to a news publication in the Thursday, January 25 issue of the Daily Graphic, the management of the VRA, under the Dr. Charles Wereko Brobby on January 10, 2002 entered into an agreement with Lushann for the lease of the 85 MW power plant for a three year period to supplement energy supply in the country.
And in order to ensure efficiency, Lushann entered into an agreement with G.E. Energy Rentals to jointly execute the project.
The newspaper reports however that Lushann accused G.E. Energy Rentals of using Lushann’s trade secrets and strategic information regarding its Power Purchase Agreement (PPA) with the VRA without its consent.
Lushann (Plaintiff) further contended that the defendant (G.E. Energy Rentals) interfered with Lushann’s contractual relationship with the VRA which resulted in the termination of the PPA and misappropriated its trade secret.
The story said on February 8, 2002, the plaintiff executed a PPA with the VRA for the emergency supply of power to Ghana.
According to a statement of claim, after the execution of the PPA, the plaintiff, mindful of time constraints, aggressively expended effort, time and resources towards its implementation including negotiating and executing several agreement, making trips within the US, to Europe and Africa.
It said because of the estimated time of four to six months required to pour concrete for the installation of a permanent plant, the VRA and Lushann decided to resort to the temporary use of skid mounted units.
Lushann found out that G.E. Energy Rentals had several of the skid-mounted units in the US to rent out and so with the assistance of personnel of G.E. Energy Rentals, Lushann inspected the units.
The statement of claim said Lushann also indicated its interest in working with G.E. Energy Rentals in order to deploy some of the units in Ghana in the execution of the PPA.
Discussions and negotiations to explore ways and means of the two companies jointly implementing the PPA with the VRA then began and so Lushann sent a copy of the PPA, a copy of Letters of Credit opened with Lushann’s favour by the VRA and the names of Lushann’s primary contacts at VRA to G.E. Energy Rentals.
The statement of claim said during the discussions Lushann revealed its trade secrets, confidential business information and strategic plans for power generation in Ghana and the rest of West Africa, with assurances from the defendant that the information would be utilized only to further Lushann’s relationship with the VRA.
A memorandum of understanding was signed in furtherance of the PPA with the VRA as a result of the discussions and negotiations, however without the plaintiff’s consent the defendant began to make contacts with the VRA in respect of the PPA and thereby complicated the plaintiff’s relationship with the VRA and succeeded in wresting the PPA from it.
The statement said G.E. Energy Rentals was liable for tortuous interference with the contractual relationship, misappropriation of trade secret, breach of implied covenant not to compete and breach of non-circumvention agreement.
G.E. Energy Rentals have meanwhile denied the charges and says Lushann’s court action is an abuse of court process, besides failing to disclose a reasonable cause of action for which relief could be granted.
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