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19.04.2005 Crime & Punishment

Court slaps 3.9 billion cedis damages on Mobil

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Accra April 19, GNA - An Accra Fast Track High Court has slapped a 3.966 billion cedis damages against Mobil Oil Ghana Limited, the first listed oil company on the Ghana Stock Exchange, for breach of contract. The Court in assessing damages further awarded 40 million cedis cost to Kinsadus Company Limited, a haulage firm that sued Mobil. In October last year, Kinsadus Company Limited, dragged Mobil Oil Ghana Limited to court for failing to load its trucks with petroleum products. In its statement of claim, Kinsadus said on April 1, 2003 it reached an agreement with Mobil to lift and distribute their products, barring any hold ups to March 31, 2005.

On August 7, 2004, six trucks of the Kinsadus were sent to the Tema Oil Refinery to cart products to various places. However, the Liaison Officer of Mobil Oil Ghana Limited informed them that he had had instruction not to load the vehicles of Kinsadus without assigning any reason.

Article Two of the Transport Services Enabling Agreement states that parties may be terminated without assigning any reason but they ought to give 30 days notice but this was not compiled with. Kinsadus in its statement of claim noted that Mobil's refusal or failure to load the vehicles was arbitrary, unilateral and unlawful. It argued that Mobil had been deducting three per cent at the end of every month from their freight earning and those deductions were unauthorized.

It was, therefore, claiming damages for breach of contract occasioned by Mobil's refusal or failure to load Kinsadus' six vehicles with product in violation of the agreement between them. Kinsadus was also seeking damages for loss and distress occasioned by the Mobil's breach of contract and make orders as the Court might deem fit.

In statement of defence, Mobil admitted entering into two agreements with Kinsadus namely a Transportation Service Enabling Agreement and a Technical Assistance Agreement.

Mobil further stated that under the Transport Service Agreement it was under no obligation to make any representation as to the number frequency or monetary value of orders to be issued. It further stated that the alleged refusal or failure to load Kinsadus' vehicles did not amount to termination under Article 2 (ii) of the agreement.

Mobil further denied deducting three per cent at the end of every month from Kinsadus' freight earning.

It contended that the three per cent was under the agreement was to improve Kinsadus trucks productivity.

The Court in October, last year, after listening to arguments by Counsel for defendant and plaintiff stated that there had been clear breach of agreement and plaintiff had incurred losses. It, therefore, fixed a date to assess damages.

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