Battle Of Wits: SIEMENS OIL SUED!

In a classical example of battle of the wits, an epoch legal battle has erupted between two giants in the rarefied of petroleum, oil and Gas.

Draper Oil and Gas limited has summoned Siemens Oil and Gas Equipment Limited before an Accra High Court praying the court for a litany of reliefs, including “A declaration that Defendant has violated the provisions of the Petroleum (Local Content and Local Participation) Regulations, 2013(LI2204).”

Chiefly amongst the reliefs Draper Oil is praying the Court, is an order of perpetual injunction restraining Defendant (Siemens) from awarding or allowing any third party to perform or execute any parts of the ENI contract to be performed by Plaintiff, pursuant to the local content plan submitted to the Petroleum Commission by the Defendant.

The company which main occupation is to provide petroleum related and allied services to entities operating in Ghana’s petroleum industry, is also praying the Court for an order of perpetual injunction restraining Defendant from acting in any manner inconsistent with the said local content plan and the Petroleum Local Content, and Local Participation Regulation, 2013 LI2204.

Draper Oil also wants the Court to order for perpetual injunction; restraining Siemens from acting in any manner inconsistent with the local content plan and the Petroleum Local Content and Local Participation Regulation, 2013 LI2204.

According to Drapers Oil’s Statement of Claim, a copy of which is in the possession of the paper, on or about December 2015 Plaintiff and Siemens started negotiations to participate in a Compressor Contract to be awarded by ENI, and that the purpose of participating in the ENI Compressor Contract Siemens Ghana instructed Plaintiff(Draper Oil) to secure quotation from jorg Inc, a company registered in Germany for the transportation of coolers compressors and these quotation were incorporated into the tender Siemens Ghana submitted to ENI.

“Plaintiff says that in line with the requirements of Petroleum(Local Coastal and Local Participation) Regulation, 2013(LI2204) Siemens Ghana submitted to the petroleum commission a local content plan for approval” adding that “per the submitted local content plan Plaintiff was to execute parts of the ENI Contract relating to: a. Recruitment and training for local engineers and project management practitioners; b. Sourcing and procuring three(3) coolers for the two(2) compressors to be purchasing by ENI c. Transport of the coolers and compressors from the various collection points is Europe to Sanzule, Ghana; d. Handling all other miscellaneous procurements in Ghana.”

Draper Oil however, argues in its Statement of Claim that it is an offence contrary to the Petroleum(Local Content and Local Participation) Regulations, 2013(LI2204) for any persons to make false representation to the Petroleum Commission in relation to the requirement of the local content under LI2204.

The statement continued that “… by the contract (ENI Contract) dated 8th July 2016 between ENI and Siemens Ghana, Siemens Ghana was contracted by ENI to provide Gas compressor package and associated works”.

Draper Oil avers in its Statement that following the execution of the ENI Contract it was poised to execute its part of the contract as required by law and entered into various discussions with Defendant for that purpose.

That in line with the provision of the JVC it entered into an agreement with Defendant to provide training services to local engineers and project management practitioners, among others. “Plaintiff says that despite all representations to Defendant about its readiness and willingness to perform its scope of the agreement Siemens Ghana has prevented Plaintiff from performing its assigned activities pursuant to the requirement of the local content laws of Ghana and the JVC.”

Plaintiff indicated that in the flagrant and contumacious violation of LI2204 Defendant has refused to allow or permit Plaintiff to perform all the activities in paragraph 10(b), (c) and (d) above. Plaintiff further avers that by a letter dated 5th July 2017, it was informed by Defendant that it has entered into an agreement with another company to perform the activities in paragraph 10 (b) (c) and (d) above.

Plaintiff says that it is unlawful for the Defendant contrary to its representation in the local content plan submitted to and approved by the Petroleum Commission to act in a way that eviscerates or seeks to defeat the objectives of the (Local Content and Local Participation) Regulations, 2013(LI2204).

Plaintiff says that none of the engineers or persons it has trained for employment with the Defendant have been employed or engaged by the Defendant contrary to the technology transfer obligations of the Defendant under LI2204.

Plaintiff also noted that all attempts made so far to make the Defendant comply with the local content laws of Ghana as the affect the Plaintiff have proved futile. Plaintiff avers that unless Defendant is restrained by the Court from continuing to violate the local content laws of Ghana it will persist in its unlawful acts and in the process undermine the legislative objects of the local content laws of Ghana.

This paper Siemens was set up as a Joint Venture Company pursuant to a Joint Venture Agreement (JVA) dated 26th April 2016 between Siemens (Pty) Ltd, a company registered and incorporated under the laws of South Africa, (Siemens South Africa) and Plaintiff.

Siemens South Africa owns 90% of the shares of Siemens Ghana whiles Plaintiff owns the remaining 10%, with the core business of Siemens Ghana, being supply, installation and commissioning of gas compressors and related maintenance services. The Eni Ghana Exploration and Production Limited (ENI) is a company that operates in Ghana’s petroleum industry pursuant to a petroleum agreement entered into with the Government of Ghana and the Ghana National Petroleum Corporation.

Stay tunes as this paper follows up to the court.