An Accra High Court has granted a motion for a joinder filed by Dram Oil, an Oil Trading Company Limited, for Vihama Energy Limited to be joined in an ongoing litigation at a Commercial Division of the court.
Dram Oil and Trading Limited dragged auditing firm, Deloitte and Touche to the Commercial Division of the Accra High Court, accusing the firm of breaching its duty of care as well as being negligent in putting together a report.
Dram Oil wants the court to order the recovery of various sums of over $187,595,000 from Deloitte.
The court presided over by Justice Francis Obiri granted the motion by Dram Oil and asked Vihama Energy Limited to be served since it is necessary to the suit.
The substantive suit at the High Court is pursuant to the offer of a $13.2m financing facility given to Dram Oil by Cal Bank in 2011. A cargo of 12,000 metric tonnes of petroleum products was imported into Ghana by Dram with Vihama Energy Ltd as the licensed distributing agent on record for the transaction.
After a failure by Vihama to distribute the delivered cargo when it arrived, and after Dram Oil proposed to bring in a new bulk distribution company to undertake the distribution of the products, a tripartite agreement was enforced by Cal Bank with Dram Oil and Vihama as parties to it.
After the sales of the cargo, there remained a deficit of $600,000 which caused Cal Bank to file proceedings in court against Dram for the recovery of the said amount.
Dram Oil subsequently joined Vihama in the action as Vihama had failed to render a full account of the sales of the cargo.
This argument was upheld by the High Court consequently in favour of Dram Oil per Justice Novisi’s judgement in May 2015.
Despite this judgement, Cal Bank still proceeded to file an entry of judgement in 2019 although the High Court had not pronounced any orders for Cal Bank in its judgement. The court also struck out the entry of judgment filed by Cal Bank, subsequently.
The High Court dismissed it as unmeritorious after Cal Bank filed a motion for interlocutory orders pursuant to the entry of judgment filed by Cal Bank.
According to the court, once a court delivers judgment, the work of that particular court is done, unless review application processes are filed. The court further stated that in the absence of such a process or a notice of appeal, the matter cannot be said to be pending.
Background
In 2011, Oil Marketing Company, Dram Oil entered into a distribution agreement with Vihama Energy Ltd whereby Dram Oil would import petroleum products into Ghana and Vihama Company Limited through its government-approved bulk distribution (BDC) license would store, distribute and sell the products on a wholesale basis to oil marketing companies (OMC’s) on behalf of Dram.
Subsequent to this agreement, Dram secured a finance facility from Cal Bank and imported 16 million litres (13,244mt) of gasoline into Ghana at $950 per metric ton.
The cargo was discharged into the storage facility of the Bulk Oil Storage and Transport (BOST) Company, a government-owned company, on the 29th of December 2011.
Upon arrival, Vihama refused to sell the cargo claiming that it had its cargo to sell and could therefore only sell the Dram cargo after it had disposed of its cargo.
As the Cal bank’s facility granted to Dram Oil was a 90-day facility, it became apparent that Dram would be unable to amortise the loan as per schedule.
To that end, Dram Oil entered into another agreement with another BDC Licensed company to sell the cargo. Cal Bank objected to the arrangement and insisted that Dram Oil works with Vihama.
Consequently, a tri-partite agreement at the insistence of Cal Bank was executed between all three parties on the 23rd of January 2012 which was to govern the operation of the transaction.
During this period, not a single drop of the Dram cargo had been sold and remained unsold deep into February with Dram Oil facing a default situation with Cal Bank.
However, the price of the cargo kept on rising on the market and reached its highest peak of $1,200 per metric ton in March making it a significantly profitable transaction which would amortise the debt completely despite the delay.
At this point, Vihama reverted by using strong-arm tactics and against the executed distribution agreement offered to purchase all of the cargo from Dram Oil at a wholesale price to help it resolve its situation with Cal Bank.
Two contracts were therefore executed between the Managing Director of Dram Oil and Vihama for the sale of the cargo of 13,244 metric tonnes on the 29th of February 2012 and early March 2012.
Vihama subsequently started selling the cargo and made payments to Dram Oil accordingly enabling it to amortize the loan with Cal Bank.
On completion of the payments, however, there were still some amounts outstanding to Cal Bank on the transaction. Cal Bank thus, sought to demand payment of the overdue sums from Dram Oil. The matter ended up in court and Dram Oil enjoined Vihama to the suit against the wish of CAL Bank on the basis that
1. The overriding agreement was the tri-partite agreement
2. The subsequent agreement between Dram Oil and Vihama was unlawful
3. Vihama, as per the tri-partite agreement had therefore not rendered accounts of the sales of the cargo sold in March 2012 to Dram and Cal Bank.
On this basis, therefore, the parties could not ascertain any indebtedness until full accounts had been rendered on the sales of the cargo.
Vihama opposed this argument on the basis that it had legitimately purchased the cargo on the 29th of February and early March and so had full proprietary rights to the cargo and subsequent sales and so did not need to render accounts.
On the 18th of May 2015 before Justice Novisi, the court gave judgment in favour of Dram Oil and held that the subsequent sales contract of the 29th of February 2012 and early March 2012 were unlawful as Cal Bank was not a party to these contracts and that the overriding agreement was the tri-partite agreement signed on the 23rd of January 2012.
She further ordered that an independent auditor be appointed to audit the accounts of Vihama to determine the monies received by Vihama from the sales of the cargo under the tripartite agreement of the 23rd of January 2012 with further orders to be made by the court on receipt of the auditor’s report.
Deloitte was subsequently appointed by the order of the court with Dram Oil as payee for its services.
Deloitte presented its final report to the court which adopted the report in its entirety.
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