The Commercial Division of the Accra High Court has given the go ahead to five subsidiaries of Quantum Oil Terminals to join in the suit it filed against International Finance Corporation (IFC) and OPEC Fund.
The subsidiaries, Sage Petroleum, Cardinal Petroleum, Ecco Petroleum, Quantum Group and Arch investments had filed a motion to join the suit arguing that they are direct parties to the share charge agreement between themselves and IFC & OPEC.
The subsidiaries had argued that subsequent to the breach of the share charge agreement they have suffered damages and are therefore applying to join the suit in order to have the opportunity to lay their claim before the court.
Their purpose is to avoid the multiplicity of suits and allow the court to determine all the issues between the parties once and for all.
Although lawyers for IFC and OPEC Fund had argued against the decision of the subsidiaries, the court presided by Judge S.K.A Asiedu ruled in favor of the subsidiaries.
In his ruling the Judge Asiedu, indicated that having the court having read all the exhibits and listened to the arguments of both parties hold that it is proper and right for the other five companies to join the suit.
He said the subsidiaries are necessary parties to the course of action and it is proper that the court hears all the facts from all the parties in one court adding that his ruling is also to avoid the multiplicity of suits.
Following the ruling of the court, the five subsidiaries will put in their case after which IFC and OPEC Fund will be allowed to respond accordingly. When that hurdle is cleared, the court will then go into the substantive case which is expected to be heard next year.
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.