High Court deals another blow to IFC, OPEC
An Accra High Court has dismissed an application by the International Finance Corporation and OPEC Fund for International Development to quash an earlier ruling made by the court which had directed the two institutions to open their defence in a case brought against them by Quantum Oil Terminals.
The indigenous oil and gas firm is arguing that the actions of the two institutions have made it lose business to the tune of US$41.3 million, and is praying the court that the two be made liable for the losses.
The two institutions, in an application to the Commercial Division of the Accra High Court, argued that the court’s earlier decision made on June 30, must not stand as the case brought by Quantum Oil lacked merit.
But the court, presided over by Justice Mrs. Doreen Boakye Agyei, yesterday, dismissed the application by the two bodies which meant that they have up to 14 days to open their defence.
Although the two organisations are expected to file an appeal at the Appeals Court, that does not preclude them opening their defence to the substantive matter.
Quantum Oil went to court after the two lenders failed to release a US$16million loan it has signed an agreement with them for, arguing that it had, meanwhile, gone ahead to make all manner of payments in fees and other commitments.
The IFC, through its local office, approached Quantum Oil in 2012 to finance the construction of a tank farm, after the National Petroleum Authority (NPA) had given a directive to oil and gas firms dealing in bulk oil distribution to construct their own storage facilities.
The IFC brought in OPEC as joint lender, but the deal was laden with a number of contingency measures such as the payment of all manner of fees and other processes such as company audits, environmental assessments, commitment, monitoring, supervision fees etc.
About three years after the first contact between the parties, an agreement was reached, which led to the signing of the US$16 million loan deal, consisting of 8 different contracts in all. The deal, which was signed in June, 2015, states that Quantum Oil would receive US$8 million as first tranche payment, after which the second tranche would be disbursed contingent on other set requirements.
After a series of back and forth requisitions, IFC wrote to notify Quantum Oil that the loan facility had been cancelled, citing reasons such as a loss in the business volume of the latter's business.
Quantum Oil averred, in its application to the High Court, that the delay in the disbursement of the loan, after it had fulfilled all requirements set before it by the defendants, is the reason it lost business volume, hence the two lenders could not use that to cancel the loan.
Quantum Oil, the plaintiff, told the court that even after the termination of the agreement, the defendants were still asking it to pay loans management fees. When it refused to pay, IFC withheld all the securities it had provided to secure payment for the loans it never received. This prevented it from seeking alternative funding, leading it to suffer huge damages.