Bulk Oil and Storage and Transportation (BOST) has caused serious financial loss to the State as an Accra High Court ordered it to pay a total of GH¢ 9,962, 118.84 to Hask Oil Company Limited being the interest accrued on a bank facility the Company took, while their products were in the custody of BOST.
A Judgment delivered by Justice Emmanuel Ankamah between Hask Oil Company Limited (Plaintiff) and BOST (Defendant) on 21st October 2019, directed that interest at the rate of 30 per cent per annum being the default rate being charged by the facility bank on the above sum from 28th February, 2011 till date of final payment.
This judgment debt came about because of BOST’s refusal to release plaintiff’s petroleum products for sale to repay the credit facility.
According to the Plaintiff, in July 2013, it stored its imported petroleum products in the Defendant’s storage tanks and the products were financed with a credit facility from Fidelity Bank, whose terms included among others, a default interest rate of 30 percent per annum and an execution of a lien or right to set off over a fixed deposit investment with the cedi equivalent of $2 million belonging to one J.K Horgle, the majority stakeholder of the Plaintiff company.
This was in an event that the plaintiff defaults in the repayment of the facility.
It said on 27th October, 2014, when Fidelity Bank wrote to the plaintiff demanding the payment of the credit facility, the plaintiff on 31st October through its solicitors, wrote to the Defendant and demanded the payment of the value of the outstanding products with interests thereon.
It said they also drew the attention of the Defendant to the credit facility with Fidelity Bank.
The Court said in response to their letter dated 31st October same year, the Defendant wrote to the Plaintiff on November 24, 2014 in which it acknowledged receipt but stated that it was unable to confirm the amount it owed the Plaintiff until it has ended its audit.
The products were eventually released to the Plaintiff in May 2016 at the time the interest had risen to the above figure of which the plaintiff sued.
The Plaintiff during the trial was seeking the recovery of the sum of GHC9,962,118.84 being interest accrued on credit facility due and paid by Plaintiff to Fidelity Bank as a result of Defendant’s refusal to release Plaintiff’s petroleum products for sale to repay the credit facility
It also demanded an interest at the rate of 30% per annum being the default rate being charged by Fidelity Bank on the above sum from 28th February, 2017 till date of final payment.
Meanwhile, it took the defendant about two years after it was made aware of the fact that the plaintiff’s petroleum products were financed with credit facility from the Fidelity Bank to release the plaintiff’s remaining petroleum products.
According to the Court, the Plaintiff is entitled to demand the refund of its interest and penalties it paid to Fidelity Bank as a result of the Defendant’s failure to release the products to the Plaintiff in time.
“As a result, the Plaintiff is hereby granted judgment for and the reliefs endorsed on the writ of summons. It was the sole fault of the Defendant in not releasing the products in time to the Plaintiff. Defendant’s counterclaim therefore fails and same is dismissed,” the Judge ruled.