IN-PETROL GHANA LIMITED vs. GHANA OIL COMPANTY LIMITED (GOIL) [2021]DLSC10685

Date	2021-04-29
Suit No.	CIVIL APPEALNO. J4/07/2021
Citation No.	[2021]DLSC10685

YEBOAH CJ (PRESIDING)

MARFUL-SAU JSC

AMEGATCHER JSC

OWUSU (MS.) JSC

TORKORNOO (MRS.) JSC

JUSTIN AMENUVOR FOR THE DEFENDANT/APPELLANT/ APPELLANT.

COSMAS M. ANPENGNUO FOR THE PLAINTIFF/RESPONDENT/ RESPONDENT.

[2021]DLSC10685
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													<main id="main" class="content" style="min-height: 60rem" >IN-PETROL GHANA LIMITED<o:p></o:p>(PLAINTIFF/RESPONDENT/RESPONDENT)<o:p></o:p>vs.<o:p></o:p>GHANA OIL COMPANTY LIMITED (GOIL)<o:p></o:p>(DEFENDANT/APPELLANT/APPELLANT)<o:p></o:p>[SUPREME COURT, ACCRA]<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

CIVIL
APPEALNO. J4/07/2021&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: 29TH APRIL, 2021<o:p></o:p>

</div>COUNSEL:<o:p></o:p>JUSTIN AMENUVOR FOR THE DEFENDANT/APPELLANT/<o:p></o:p>APPELLANT.<o:p></o:p>COSMAS M. ANPENGNUO FOR THE PLAINTIFF/RESPONDENT/<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

RESPONDENT.<o:p></o:p>

</div>CORAM:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p>YEBOAH CJ (PRESIDING), MARFUL-SAU JSC, AMEGATCHER JSC, OWUSU (MS.) JSC,
TORKORNOO (MRS.) JSC <o:p></o:p><div style="border-top-width: 1.5pt; border-top-color: windowtext; border-left: none; border-bottom-width: 1.5pt; border-bottom-color: windowtext; border-right: none; padding: 1pt 0cm;">

<p class="MsoNormal" align="center" style="text-align:center;line-height:115%;
border:none;mso-border-top-alt:solid windowtext 1.5pt;mso-border-bottom-alt:
solid windowtext 1.5pt;padding:0cm;mso-padding-alt:1.0pt 0cm 1.0pt 0cm">JUDGMENT<o:p></o:p>

</div>&nbsp;TORKORNOO
JSC:-<o:p></o:p>&nbsp;This is an appeal from the judgment of the court of appeal affirming
the decision of the commercial division of the high court. The parties are
companies dealing in petroleum products. The plaintiff/respondent/respondent (plaintiff)
described itself as an oil trading company and the
defendant/appellant/appellant (defendant) as an oil marketing company. <o:p></o:p>&nbsp;THE CASE OF PLAINTIFF <o:p></o:p>The case of the plaintiff is that it sold 5500 metric tonnes of gasoil
to defendant on credit. The defendant gave the plaintiff a Corporate
Irrevocable Payment Undertaking (hereinafter referred to as CIPU or the Undertaking)
with a schedule of payments for the gasoil. The CIPU was addressed to the
plaintiff and it's bankers, UT Bank Ltd.<o:p></o:p>&nbsp;Under the payment schedule, defendant was required to pay plaintiff GhC10,727,808.00 in five equal
installments of GhC2,145,561.60 between
30 to 40 days after commencement of loading of the gasoil from Tema Oil
Refinery (TOR). <o:p></o:p>&nbsp;According to plaintiff in its statement of claim, the sum of GH10,727,808.00 stated on the CIPU was
an estimated ex-refinery price because the final purchase price is determined
after the complete discharge of the product. Plaintiff further averred that
loading commenced on 2nd January 2015 and so payment should have started by the
30th day after 2nd January and ended by 12th February 2015. Plaintiff alleged
that defendant failed and or refused to pay plaintiff in accordance with the
agreed payment schedule and this led to losses and the claims of the plaintiff.
<o:p></o:p>&nbsp;According to Plaintiff in its amended statement of claim, the payment
schedules were agreed as 'a pre-condition
for plaintiff obtaining Letters of Credit from the bank to pay plaintiff's
suppliers, and due to nature and mode of pricing in the oil industry'.&nbsp; This was to ensure that 'fluctuating (sic) in pricing and changes in exchange rate as
determined by the National Petroleum Authority does not result in losses to
plaintiff'<o:p></o:p>&nbsp;Regarding the fluctuations referred to, Plaintiff made the case in its
statement of claim that 'in fulfillment
of the functions and objectives of the National Petroleum Authority, bulk
distribution companies which by virtue of price and/or foreign exchange
fluctuations make profits over and above the pricing set by the Authority pay
the resulting profits referred to as 'over recoveries' to the National
Petroleum Authority and where losses are made due to price fluctuations
referred to as 'under recoveries the oil companies are reimbursed for the
losses.'<o:p></o:p><s>&nbsp;</s>Again, plaintiff alleged that, 'to
the knowledge of the defendant', UT Bank limited had issued a 90 day
letters of credit to plaintiff's supplier on 19th December 2014 for the gasoil
that was sold to the defendant. And, to the knowledge of defendant, the payment
in Ghana cedis was scheduled over the 30 to 40 day credit period so that
plaintiff would effectively recover with profit, the sum of $3,759,811 that plaintiff had spent as
purchase price for the 5500 metric tonnes of gas oil sold by BP Oil
International limited.<o:p></o:p>&nbsp;