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Business News Fri, 30 Jun 2017

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Court dismisses IFC application over $41m Quantum Oil suit

The Commercial High Court 1 has dismissed an application by the International Finance Corporation (IFC), the private lending arm of the World Bank Group and the OPEC Fund for International Development (OFID), which sought to challenge the jurisdiction of the High Court to entertain the suit filed against them by the indigenous Ghanaian company, Quantum Oil Terminals Limited.

His Lordship Justice Samuel Asiedu who presided over the case on Thursday, [June 29, 2017] ruled that based on the evidence brought before him by the parties, the High Court in Ghana had jurisdiction to hear the case.

He therefore awarded a cost of GHC12,000 against OPEC Fund and IFC to be paid to Quantum Oil after the local company had requested for GHC20,000.

Quantum Oil Terminals Limited has dragged IFC and the OPEC Fund for International Development to the Accra High Court for an alleged breach of contract and discrimination.

The company is demanding $41,319,123 in total damages from the two international bodies for allegedly failing to provide it with a $16-million loan facility which was agreed among the three entities.

Details of lawsuit

Quantum Oil alleged that the IFC, deceived them into coming to the table with the promise of board approval for a loan facility to complete their tank farm within 6 months and subsequent loan disbursement within a year of engagement, leading Quantum Oil to close all other funding doors it was already pursuing before it was approached by the IFC.

It said what followed was four years of constant engagement with the IFC in the form of calls, emails, document requests etc during which time Quantum Oil was made to spend over $2million in fees and other payments to the IFC and other costs in relation to the promised $16 million loan facility.

It added that after satisfying all the requirements for the disbursement of the loan, IFC in a move inconsistent with international practice, strangely refused to disburse, leaving the 75% completed tank farm project in a state of limbo.

Quantum Oil further alleges that the IFC proceeded to discriminate against it by not disbursing as, among other things, it could not provide any substantive reason for that decision.

According to Quantum Oil, this was against the advice of multiple internal reviews of the loan facility.

It said contrary to the international practice and IFC’s own transparency rules, IFC took another strange decision by refusing to share the report of the industry expert with Quantum Oil, mainly because it did not support their decision not to disburse.

The company alleges that having taken a decision not to disburse, IFC fraudulently invoiced it for portfolio supervision fees that are payable yearly and are only due a year after the facility has been disbursed.

To make an already bad situation worse for Quantum Oil, the company said IFC is still holding onto the Quantum Oil’s multiple securities used to guarantee the loan, claiming non-payment of the fraudulently issued invoice, an amount of less than $100,000, knowing very well the effect and huge cost to Quantum Oil of doing so.

It questioned portfolio supervision fees of $100,000 which could not have been due since the loan had not been disbursed.

Quantum Oil alleged that this action has been designed by the IFC to make it difficult for it to raise the needed funding from other sources to complete their tank farm facility still standing uncompleted when it should have been completed and in operation more than 2 years ago.

Quantum Oil said the $41.3 million includes fees and charges paid directly paid to IFC and OPEC Fund, fees and charges paid to various consultants at the direction of IFC and OPEC Fund and statutory fees paid by plaintiff to create charges for the benefit of IFC and OPEC Fund.

Quantum Oil said rather than assisting it to develop and grow its business, IFC and OPEC Fund rather worsened and reduced Quantum Oil’s business fortunes and prospects and in the process, rendered Quantum Oil poorer than before.

It is seeking $4,200,000 being cost of escalation in the project due to delay occasioned by defendants, $681,050 being fees and charges paid by plaintiff directly to the defendants, $331,015 being various consultancy defendants directed plaintiffs to pay and $9,645,582 being lost interest income on funds spent by plaintiff on the project prior to defendants’ breach.

In addition, Quantum Oil seeks $2,430,808 as additional interest cost to be incurred by plaintiff on the project due to defendant’s breach to disburse the loan thus causing delay in the execution of the project, $17,520,882, being lost business revenue to its associated trading company as a result of defendants’ breach and $6,509,786 being lost margins to Cardinal Petroleum Limited directly attributable to delay in the project resulting from failure to disburse the loan by defendants.

Additional files from thefinderonline.com

Source: www.ghanaweb.com

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