This case revolves around a contractual dispute between Dram Oil and Trading Limited (Plaintiff) and Alfapetro Ghana Limited (Defendant) concerning the distribution of petroleum products and the subsequent alleged withholding of payments. Dram Oil initiated legal proceedings against Alfapetro, claiming a breach of their distribution agreement, seeking the recovery of substantial sums of money along with accrued interest. The High Court in Accra has adjourned the commencement of the trial to October 13, 2025, at the request of the Defendant’s counsel, who cited the unavailability of their lead counsel due to travel commitments.
The heart of the disagreement lies in the alleged failure of Alfapetro to remit payments owed to Dram Oil under the terms of their 2012 distribution agreement. Dram Oil had secured a Letter of Credit from UT Bank (later acquired by GCB Bank) to import 7,100 metric tons of petroleum products. Alfapetro was then contracted to distribute these products to Oil Marketing Companies (OMCs), with the proceeds to be deposited into a designated UT Bank account controlled by Dram Oil. Alfapetro was entitled to a distribution fee of US$8.00 per metric ton, which Dram Oil asserts was duly paid. However, Dram Oil alleges that Alfapetro, after completing the distribution by January 2013, failed to transfer the entirety of the under-recovery monies received from the National Petroleum Authority (NPA) and the proceeds from direct sales to OMCs.
Dram Oil’s claims are categorized into three tranches. Tranche 1 pertains to under-recovery monies from the NPA. Dram Oil seeks to recover USD 887,671.69 (approximately GHC 11,362,197.63 based on the March 2024 exchange rate), representing the principal amount allegedly received by Alfapetro but not transferred to Dram Oil. Further, they claim interest on this principal, amounting to GHC 54,458,449.38, calculated at an annual rate of 46% from December 2013, when the payment was allegedly due, to December 2023, when the amended writ was filed.
Tranche 2 also relates to under-recovery monies from the NPA. Dram Oil claims USD 79,977.26 (approximately GHC 1,023,708.93) as the principal, along with accrued interest of GHC 3,767,248.87, calculated at the same 46% annual rate from April 2016, the alleged due date, to March 2024, when the amended writ was filed. The third component of Dram Oil’s claim focuses on direct sales proceeds. They seek USD 1,325,207.45 (or the GHC equivalent) representing outstanding payments from OMCs, allegedly received by Alfapetro but not transferred to Dram Oil. They also claim interest on this amount totaling GHC 78,028,214.50, calculated at 46% per annum from December 2013 to December 2023.
The genesis of the business arrangement, as presented by Dram Oil, depicts a scenario where Alfapetro’s Managing Director, Mr. Eric Forson, approached Dram Oil’s CEO, Mr. Randolph Koranteng, requesting a distribution contract. Motivated by a desire to assist Mr. Forson, Dram Oil agreed to the arrangement. The agreement stipulated that Alfapetro would distribute the petroleum products, issue proforma invoices to OMCs designated by Dram Oil, and deposit all sales proceeds into a specified UT Bank account. This arrangement, according to Dram Oil, would facilitate the repayment of the Trade Finance Credit Facility from UT Bank.
The crux of Dram Oil’s argument lies in the assertion that Alfapetro failed to adhere to the financial terms of the agreement. They allege that Alfapetro, while receiving payment from the NPA and the OMCs, failed to transfer these funds to Dram Oil, thereby breaching the contract and causing significant financial losses. They also claim that Alfapetro has been unresponsive to their requests for clarification and payment. The significant delay in the commencement of the trial, now scheduled for October 2025, prolongs the resolution of this financial dispute.
The implications of this case extend beyond the two parties involved. The substantial sums of money claimed, along with the accumulated interest, highlight the potential financial repercussions of contractual breaches in the petroleum distribution sector. This case also underscores the importance of clear contractual agreements, robust financial tracking mechanisms, and timely communication between business partners to mitigate the risk of disputes and financial losses. The outcome of the trial will have significant implications for both Dram Oil and Alfapetro, and may serve as a precedent for future cases involving similar contractual disputes in the industry. The court’s decision will determine whether Alfapetro breached the distribution agreement and, if so, the extent of their financial liability to Dram Oil.
