The case of the day is Government of Ghana v. ProEnergy Services, LLC (W.D. Mo. 2011). Ghana had entered into a contract with Balkan Energy Limited for the refurbishment of a power plant in Ghana. ProEnergy Services, LLC was the prime subcontractor.
Balkan claimed that Ghana had breached the contract by failing to provide a connection to the national electricity grid and by failing to pay certain fees. Balkan commenced an arbitration against Ghana in the Hague, and Ghana responded with a lawsuit in the High Court of Ghana, alleging fraud.
Meanwhile, ProEnergy had sued Balkan in the federal court in Missouri. Ghana applied to the federal court for judicial assistance in obtaining evidence from ProEnergy for use in the arbitration and the High Court litigation. The court initially granted the application, but Balkan then intervened in order to move for reconsideration.
The judge denied Balkan’s motion. First, the court refused to find the High Court litigation a “sham”. The discussion on this point is fairly unenlightening. The one noteworthy point, found in Ghana’s brief, is that the arbitral tribunal refused a request to issue an anti-suit injunction against the Ghana litigation.
Second, the court decided not to decide the question whether the arbitral tribunal was itself a “tribunal” within the scope of the judicial assistance statute. Regular readers will know that I am critical of the view that an international arbitral tribunal is a tribunal for purposes of the statute. But because of the Ghana judicial proceedings, there was no need to decide the issue here.
Having found that there was a foreign proceeding pending, the court went on to apply the Intel test, with a nod to Judge Posner’s discussion of the court’s discretion in Heraeus Kluzer. The factors all favored Ghana. First, ProEnergy could not be compelled to provide evidence in Ghana. Second, there was no evidence that the High Court would be unreceptive to the evidence gathered. Third, there was no evidence Ghana was trying to circumvent its own domestic restrictions on proof-gathering. Fourth, Balkan could not show undue burden, given that the discovery request was directed to ProEnergy, and its argument that the discovery could have been obtained from Balkan itself lacked merit, because the judicial assistance statute does not require the applicant to exhaust the discovery mechanisms of the foreign tribunal.