BOST to explore out-of-court settlement option over GH¢10m judgement debt

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The Bulk Oil Storage and Transportation Company Limited (BOST) has said it plans to seek amicable redress with Hask Oil over a GH₵9.9million judgement debt slapped on it by an Accra High court.

The company said it is opting for this option due to a garnishee order nisi by the court against BOST’s accounts in FBN Bank, CAL Bank and First Atlantic Bank by Hask Oil Company Limited, a move that effectively orders the banks to pay the said amount to the plaintiff.

“In the wake of the garnishee nisi, BOST is at the table with Hask Oil to reverse the order and see to an amicable settlement of the issue, since in our view the judgement of the High Court was too harsh and we also believe Hask was not entitled to any further sums beyond the volumes released to them in 2016.

“We look forward to concluding the discussions by close of this week and proceeding to inform the court of what outcomes emerge with our eyes on the ball to ensure BOST is not short-changed in the process,” BOST said in a statement.

Background

On June 9, 2017, a writ of summons was served on BOST by Hask Oil Company Limited, a Bulk Distribution Company (BDC). In its Statement of Claim, plaintiff sought as follows: recovery of the sum of GH¢5.8million interest accrued on credit facility due and paid by plaintiff to Fidelity Bank as a result of BOST’s refusal to release plaintiff’s petroleum products for sale to repay the credit facility; interest on the above sum from 28th February 2017 till date of final payment; and costs.

On December 12, 2018, Plaintiff filed an amended statement of claim raising the figure of GH¢5.8million to GH¢ 9.9million, an increase of GHC4.4million over a period of seventeen months (June 2017 to December 2018).

In its statement of defence, BOST acknowledged that somewhere in July 2013 Plaintiff delivered petroleum products in its storage tanks in its normal course of business as with other BDCs. To ascertain the actual quantities of plaintiff’s stocks as well as the balances of the other BDCs in storage, BOST engaged Ernst & Young as external auditors to investigate and validate all BDC claims.

It duly informed the BDCs, including Hask, about the audit – at the end of which it was established that the stock balances in favour of plaintiff to which it agreed was 34,143 litres of gasoline and 1,341,571 litres of gasoil.

On May 4, 2016, BOST released 74,824 litres of gasoil valued at GH¢109,886 as well as 2,350,225.42 litres of gasoline valued at GH¢3.7million to Hask at the prevailing value on the date of release. As far as BOST is concerned, the volumes of products were fully refunded to Hask Oil to cushion them against any shortfalls and it owes it no further obligation.

BOST further contended that it was never a party to the credit facility Agreement concluded between plaintiff and the bank, and ought not to be liable for any costs associated with same. Hask Oil petitioned the Ministry of Energy in 2018 with seven other BDCs for their lost products in the BOST system. The Lost Product Claims Committee quashed their request for the refund, referencing the volumes released to them in 2016 in full settlement of their lost products in the BOST system.

At the Committee’s meeting with Hask Oil in the presence of representatives of the Energy Ministry, Chamber of Bulk Oil Distribution Companies, CBOD and other state security agencies, the Chief Finance Officer of Hask Oil claimed they did not task CBOD to make any claim on their behalf. The demand was therefore dismissed by the Committee.

But by a judgment dated 21st October 2019, the High Court found in favour of the Plaintiff and granted it all the reliefs.

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