Five more companies join suit against IFC

Business News of Thursday, 21 December 2017

Source: Graphic.com.gh

2017-12-21

File photo

The Accra High Court has allowed five more companies to join a legal action initiated by local oil company, Quantum Oil Terminal Limited, against the International Finance Corporation (IFC) and OPEC Fund for International (OFID) for an alleged breach of contract and discrimination.

In a suit filed at the court, Quantum Terminals is demanding a total of $41,319,123 in total damages from the two international bodies for allegedly failing to provide it with a $16million loan facility which was agreed among the three entities.

Sage Petroleum, Ecco Petroleum, Arch Investment Limited, Cardinal Petroleum and Quantum Group of Companies, filed an application at the court to join the suit as plaintiffs, arguing that they were also affected by the alleged actions of IFC and OFID.

Application for joinder

Moving the application for joinder, counsel for the companies, Mr Alex Osei Owusu, said the purpose of the application was to avoid the companies filing separate suits which would lead to a multiplicity of suits.

The five companies, he said, had a justifiable cause of action and legitimate claims and, therefore, must be allowed to become part of the legal action.

“The applicants joining the suit would help the court in the final determination of the matter. The doors of justice should not be shut against them,’’ he said.

In his reaction, counsel for the IFC and the OFID, Mr Kofi Konadu, argued that the five companies had failed to prove that their involvement in the case was necessary.

The application for joinder, he said, was filed nine months after Quantum Oil Terminal Limited initiated the court action, a situation, he described as an embarrassment to the trial.

“This court is more than competent to determine the case without the involvement of the applicants,’’ he said.

But the court, presided over by Mr Justice S.K Asiedu, ruled that the five companies were necessary parties to the suit and, therefore, they must be allowed to join the suit. Such a move, he said, would avoid the multiplicity of suits in relation to the same matter.

According to the statement of claim of Quantum Oil Terminals Limited, it was to use the $16 million loan facility to construct a petroleum storage facility at Tema in 2012 to help it meet National Petroleum Authority (NPA) regulations that required bulk oil distribution companies to construct their own storage facilities.

Of the $16 million that was agreed upon, the IFC was to disburse 50 per cent, with the rest being provided by the OFID.

Despite the signing of the agreement and its massive publicity, Quantum averred, the two international bodies, instead of providing it with the loan within six months, as promised, demanded on countless occasions Quantum’s business documents and information.

The demands, it said, were made in spite of the fact that Quantum had already provided the said documents before the agreement was signed. As a result of the refusal of the two entities to provide it with the loan facility, Quantum said, it had to resort “to making alternative financing arrangements at a much expensive cost of 12 per cent per annum”.

The company further claimed that during the same period the two international bodies financed and “invested heavily in multinational companies owned by non-indigenes in the country”.

Quantum Terminals Limited is, therefore, asking the High Court to order the IFC and the OPEC Fund to disburse the loan, taking into consideration inflation rates within the period.

It also wants general damages totaling $41,319,123 to compensate it for the escalation in the cost of the project, fees and charges that it paid directly to the two bodies, various consultancy fees, lost business revenue, among other demands.

It also wants punitive damages to compensate it for alleged discrimination by the two international bodies and damage to its business reputation.

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