TEMA OIL REFINERY vs. AFRICAN AUTOMOBILE LTD [2010]DLCA6596

Date	2010-03-11
Suit No.	H1/213/2009
Citation No.	[2010]DLCA6596

J.B. AKAMBA JA PRESIDING

YAW APPAU JUSTICE OF APPEAL

VICTOR DOTSE OFOE JUSTICE OF APPEAL

MR. ADJABENG AKRASI FOR DEFENDANT/APPELLANT

MR. ADDO ATUAH FOR THE PLAINTIFF/RESPONDENT

[2010]DLCA6596
																																						<div class="restriction-wrapper">
														<div class="container-lg">
															<div class="row">
																<div class="col-md-12 restricted-content">
																	<div class="restricted-content-img-wrapper">
																		<div class="lock-icon bounce-7">
																			<img class=""
																				src="https://www.dennislawgh.com/dl-assets/dl-images/lock-content.png"
																				alt="Subscription based content">
																		</div>
																	</div>
																	 
																		<a href="https://www.dennislawgh.com/login"
																		class="btn btn-primary btn-lg"
																		style="font-family: 'open sans'; text-transform: capitalize; border-radius: 8px"> 
																		Login to Read Full Case </a>
																	 
																	
																</div>
															</div>
														</div>
													</div>
													<main id="main" class="content" style="min-height: 60rem" >TEMA OIL
REFINERY<o:p></o:p>(DEFENDANT/APPELLANT)<o:p></o:p>vs.<o:p></o:p>AFRICAN
AUTOMOBILE LTD<o:p></o:p>(PLAINTIFF/RESPONDENT)<o:p></o:p><o:p>&nbsp;</o:p>[COURT OF APPEAL, ACCRA]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

<p class="MsoNormal" align="center" style="margin-bottom:0in;margin-bottom:.0001pt;
text-align:center;line-height:115%;border:none;mso-border-bottom-alt:solid windowtext 1.5pt;
padding:0in;mso-padding-alt:0in 0in 1.0pt 0in">H1/213/2009&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;DATE: 11TH MARCH 2010<o:p></o:p>

<p class="MsoNormal" style="margin-bottom:0in;margin-bottom:.0001pt;text-align:
justify;line-height:115%;border:none;mso-border-bottom-alt:solid windowtext 1.5pt;
padding:0in;mso-padding-alt:0in 0in 1.0pt 0in">MR. ADDO ATUAH FOR THE
PLAINTIFF/RESPONDENT <o:p></o:p>

<p class="MsoNormal" style="margin-bottom:0in;margin-bottom:.0001pt;line-height:
115%;mso-outline-level:1;border:none;mso-border-bottom-alt:solid windowtext 1.5pt;
padding:0in;mso-padding-alt:0in 0in 1.0pt 0in">J.B. AKAMBA, JA PRESIDING
YAW APPAU, JUSTICE OF APPEAL AND VICTOR DOTSE OFOE, JUSTICE OF APPEAL.<o:p></o:p>

</div><o:p>&nbsp;</o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

</div>J.B.
AKAMBA, J.A. <o:p></o:p>The
defendant/appellant (simply the appellant) is an Oil Refinery company based in
Tema. Sometime in 2002, appellant invited tenders for the supply of one
million, six hundred thousand litres (1,600,000 Lt) of “marine mix”. The
contract bid price was expressed in Euros. Two suppliers won the contract - the
plaintiff/respondents (simply respondent/s) and GOIL Limited. The respondent
was awarded a contract to supply six hundred thousand (600,000) litres marine
mix at a unit price of euro 1.63 of the tender whilst GOIL was to supply the
remainder. <o:p></o:p>The
appellant issued a Purchase Order No.400041120P on 22nd August 2002 (see
Exhibit “A”) to the respondent to confirm the contract. It is apparent from the
records that after three deliveries of the product, the contract run into a
deadlock. This occurred when the appellants refused to accept one of the
respondents’ deliveries upon presentation. The reason given for the resultant
stalemate was that the product was not of the specification ordered. The
appellants said they were actually reacting to “numerous complaints countrywide
on products supplied in December 2003 which had caused outboard motors to
malfunction”. Exhibit 19 is a report tendered by the appellant in support of
the “alleged contaminated premix fuel” dated 26th May 2009. Attached to the exhibit
19 is a list of fifteen deliveries of premix to various landing beaches on the
South West Coast of Ghana. On the list were the Oil Marketing Companies which
were responsible for those landings. These companies were GOIL, GLORY, STAR,
OANDO and AGAPEY. Indeed out of 27 location landings listed, fifteen (15) were
by GOIL company and the remainder shared amongst the remaining four companies
above mentioned. <o:p></o:p>None
of the offending deliveries was traced to the appellants (Tema Oil Refinery
(TOR) directly nor the respondent. Following the refusal to accept the 4th
consignment on 21st June 2004 the appellants set up a committee to investigate
the allegation of non compliance with specification of the marine mix. The
committee mandated an independent expert – Tema Lube Oil Ltd (TLOL) - to test
samples of the engine oil supplied by the respondent and report. The test
report confirmed the sample oil to be good quality SAE 30 grade engine oil
which is ashless, detergent and with a moderate alkaline reserve and conforms
to the National Marine Manufacturers Association’s (NMMA) specifications known
as TCW2 and may be recommended for production of premix fuel for use in
outboard motor engines. The Independent expert (TLOL) wrote a second report
which was more conclusive on the same sample on the same 8th September 2004
(Exhibit B) in which it recommended the oil for production of premix fuel for
use in our board motor engines. <o:p></o:p>Further
tests were undertaken which also yielded positive results as confirmed by
exhibit 22 issued on 11th November 2004. As a result of the satisfactory tests,
deliveries of marine mix to the appellants (TOR) were resumed as per exhibit
“C”. Significantly, the exhibit “C” in its second paragraph introduced a new
element when it stated that it had however become necessary for TOR “to vary the specifications for the marine
mix” and by a copy of this letter “Dr.
Ali Abugre (D.M.D Engineering and Production) of TOR is requested to provide
you with the revised specifications for the marine mix”. It is obvious from
the above quotation from exhibit C that the decision to vary the specifications
was the unilateral initiation of the appellants. Respondents in accordance with
this new development submitted samples of their next delivery in accordance
with the revised specifications for testing. The results were positive as
evidenced in exhibit D. Consequently respondents were informed to supply
354,000 litres of the product which is the balance outstanding. The resultant
product when delivered by the respondents was once more turned down by the
appellants. <o:p></o:p>Following
from these developments, the respondent issued two letters alleging and
claiming losses occasioned by the appellant’s refusal to receive the remainder
of order 40004112 OP (exhibit A). The respondent presented a claim of 660,120
Euros as “lost revenue on TOR order for marine mix”. The apparent result of
these letters was a meeting attended by both parties on 16th December 2005 the
outcome of which is purported to be conveyed in exhibit J. The respondents’
reaction to exhibit J is</main>