The Court of Appeal has dealt another blow to the International Finance Corporation (IFC) and the OPEC Fund after the two had sought to block an Accra High Court from looking into the substantive case of a suit brought against them by Quantum Oil Terminals.
The Accra High Court had earlier ruled that the IFC and the OPEC Fund open their defense in a US$41.3 million suit filed by Quantum Oil Terminals for breach of contract.
The dispute regards a US$16 million loan Quantum Oil Terminals sought from the two lenders, which they refused to honour, saying the former had lost business volume.
With some aspects of the dispute being heard at an arbitration tribunal in London, the IFC and the OPEC Fund prayed the Appeals Court to stop the Accra High Court from hearing the case, so long as the matter remained before the arbitration tribunal.
But Justices of the Court of Appeal – Agnes M.A. Dordzie, P.K. Gyaesayor and Alhaji Issifu Omoro Tanko Amadu – ruled that the arbitration proceedings in London did not have any effect on the case being determined by the Accra High Court.
The superior court reiterated that the Accra High Court, indeed, had the jurisdiction to look into the matter brought before it by Quantum Oil Terminals, thereby dismissing the stay of proceedings request being sought by the counsel for the two lenders.
Counsel for Quantum Oil Terminals prayed the Appeals Court to award a cost of GHS10,000 against the defendants, who later pleaded that the amount be brought down to GHS3,000, a plea which was affirmed by the court.
The ruling by the Court of Appeal paves way for the High Court to hear the substantive case. The defendants, IFC and OPEC Fund, have eight days to open their defense.
Quantum Oil went to court after the two lenders failed to release a US$16million loan it had 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 the OPEC Fund 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 like 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 told the court that even after the termination of the agreement, the defendants were still asking it to pay loan management fees. When it refused to pay, the IFC withheld all the securities it had provided to secure disbursement of the loan it never received. This prevented it from seeking alternative funding, leading it to suffer huge damages.
By Richard Annerquaye Abbey l thebftonline.com l Ghana