Vitol SA, Woodfields Energy dragged to court over non payment of $500K crude tolling fee

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DMT Collateral Management Company Ghana Limited (Plaintiff), a wholly owned Ghanaian company, has dragged Vitol SA (1st Defendant) and Woodfields Energy Resources Limited (2nd Defendant) to court for an alleged breach of contract.

The Plaintiff which is a limited liability company engaged in the provision of collateral management, product control and management services, per the writs issued, is seeking to recover an amount of USD514,054.68.

The plaintiff is also seeking Interest on the amount at the prevailing Commercial Bank Rate from October 2021 till the date of the final payment including General Damages for breach of Contract, Cost on a full indemnity basis and any other order or relief as the court may deem fit.

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Statement of claims

In its statement of claims in the writs filed on August 15, 2022, the plaintiff described the first defendant as an energy and commodities company, trading and distributing energy safely and responsibly around the world with over forty global locations including an office in Ghana.

The second Defendant, the plaintiff stated, is a limited liability company operating in the petroleum sector trading and supplying crude oil and other refined products to various oil marketing companies and other bulk users in Ghana.

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The Plaintiff states that “on or about July 2019, Plaintiff, the Defendants and Tema Oil Refinery executed an Agreement described as a TriPartite Stock Control and Management Agreement for the monitoring of crude delivery through a refining process and subsequent sale to bulk distribution companies as well as exports.

Plaintiff says it was appointed per the TriPartite Stick Control and Management Agreement by the 1st Defendant to provide the service in respect of crude oil to be delivered from time to time, and other refined products by the first Defendant to the second Defendant.

Plaintiff contends that its appointment was required to enable the 1st Defendant to properly monitor the supply of crude oil, its refining into various energy products yields and sale to the 2nd Defendant and over which the 1st Defendant had a lien.

Mandate per contract

“Plaintiff also says the services included inspecting adjoining facilities to detect any challenges during discharge as well as ascertaining the quantities of crude oil discharged upon arrival of vessels and reconciling same with quantities on discharge documents issued at the port of discharge.

“The Agreement also imposed post-discharge roles on the Plaintiff which included, among others, identification of nominated tanks for refined products, taking daily measurements of stored products, verification of daily quantities of crude processed and product yields, releasing product yields to off-takers per release instructions of the 2-Defendant as well as issuing required daily and progress reports to the respective parties,” the plaintiff stated in its Statement of Claims.

The plaintiff states that per the express terms of the Tripartite Agreement the fees payable for the services based on the total outcome of the crude oil and refined products is “an outstanding balance of Five Hundred and Fourteen Thousand, Fifty-four United States Dollars and Sixty-eight Cents (US514,054.68),” the Statement of claims noted.

Termination of agreement

It is the case of Plaintiff that “the Defendants have evinced a clear intention not to pay the outstanding amount and proceeded to instruct Plaintiff to cease providing the services and hand the same over to them, which Plaintiff has dutifully done.

“Plaintiff also says that the Defendants have ignored demand notices served on them for the payment of the outstanding amount and have not dignified the same with the courtesy of a response.”

“Plaintiff further says that the termination of the Agreement by the Defendants was contrary to the express terms and in breach of the prior notice period condition for termination spelt out in the Tripartite Agreement.

“Plaintiff finally says it has suffered hardship due to the unjustifiable and unlawful refusal of the Defendants to pay the outstanding amount and they will persist in their refusal to pay unless compelled by this honourable Court,” the Plaintiff averred.

The defendants have since entered appearance in the matter before the Commercial Division of the Accra High Court.

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