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Bulk petroleum procurement case takes new twist

Bulk petroleum procurement case takes new twist

THE 30bn/- bulk petroleum procurement dispute involving Dubai-Based Alchemist Energy Trading DMCC has taken a new twist as two more cases have been filed, opposing some payments in execution of tender for supply of fuel to Oil Marketing Companies (OMCs).

The cases before the High Court’s Commercial Division involved Gapco Tanzania Limited on 816,335 US dollars’ worth of Letter of Credit procured from Citibank Tanzania Limited and Vivo Energy Tanzania Limited on 201, 398.44 US dollars worth of petroleum products.

Judge Deo Nangela has already issued two separate temporary injunctions against the Citibank, NBC and Oddo BHF Aktiengesellchaft from encashing the Dubai company and the latter has been stopped from receiving the payments in question payable under the two letters of credit.

He granted the injunctive orders when considering two applications filed by Gapco and Vivo Companies, the applicants, after being satisfied that they fulfilled the requirements for which the granting of interim orders as the one sought must be exhibited.

The judge further took into consideration the urgency of the matter and the imminent peril at which the applicants could be exposed if the application would not be granted.

It was his considered view that on the balance of convenience, the applicants would suffer if the application was to be rejected.

“In my view, there are all reasons as to why an application like the one at hand should be granted,” Dr Nangela said in one of the rulings of the two separate applications.

The two prohibitive orders come after the High Court, Dar es Salaam District Registry, granted a similar order against several entities.

It was Judge Leila Mgonya, who issued the injunctive orders against the Dubai Company and 15 banks, the respondents, after granting an application lodged under certificate of urgency by Petroleum Bulk Procurement Agency (an Executive Government Agency) and the Attorney General (AG), the applicants.

The banks involved in the matter are ABSA Bank Tanzania, Stanbic Bank Tanzania LTD, National Microfinance Bank, National Bank of Commerce, NBCA Bank Tanzania LTD, Citibank UAE, Natixis Bank, I & M Bank Rwanda PLC and Standard Bank of South Africa, Others are Rabobank Singapore Branch, Bank of Kigali, Easter and Southern African Trade and Development Bank (TDB), ING Bank, ABSA Bank Mauritius and Citibank.

The judge issued the order in question pending final determination of Arbitration proceedings filed by the applicants before the International Court of Arbitration of the International Chamber of Commerce (the ICC) following a dispute between the United Arab Emirates Company and the Agency.

“This court proceeds to grant the prayer sought by granting the applicants with the interim injunctive order to restrain the (Dubai Company) and its agents from receiving or performing any act calculated to receive the monies payable under various letters of credit or any party thereof,” reads part of the order.

The judge ruled that counsel for the applicants, led by Principal State Attorney George Mandepo demonstrated the need for the prayed orders to be granted as the Dubai Company is said to have failed to honour the terms of contract between her and the Agency under the tender in question.

Others counsel who successfully urged the application are Principal State Attorneys Mussa Mbura, Ponziano Lukosi and Salome Magesa as well as State Attorneys Consesa Kahendaguze, Baraka Nyambita and Gallus Lupogo, all from the Solicitor General’s Office.

They had submitted that Alchemist Energy Trading DMCC, in execution of the tender, was supposed to deliver the petroleum products in favour of Oil Marketing Companies (OMCs), but failed to honour the obligation and was likely to benefit from the matured letters of credit illegally.

The Executive Agency was established by the government to coordinate the importation of petroleum products through Bulk Procurement System using an international competitive tender system on behalf of the OMCs.

On December 4, 2020, the Agency floated a tender for the supply of petroleum products for the month of February 2021.

The Dubai Company was amongst the bidders who submitted their bids for the tender and became a successful bidder and was issued with a Letter of Award on December 17, 2020.

The two parties entered into a Shipping and Supply Contract on January 5, 2021 for the tender to supply MOGAS for delivery of 34,692 Metric Tons (MT) for the month of February with delivery date range from February 27, 2021 to March 1, 2021.

On January 22, 2021, the parties signed an Addendum Agreement to add the volume of consignment from 34,692 MT of PMS to 36,192 MT and change delivery date range from February 27 - March 1, 2021 to 3rd - 5th March 2021.

It is stated that on March 8, 2021, the parties signed another Addendum Agreement to change the delivery date range from 3rd -5th March, 2021 to 14th - 16th March 2021.

The beneficiaries OMCs, as per the contract, are Acer Petroleum (T) Ltd, Afroil Investment Ltd, ATN Petroleum Co. Ltd, Camel Oil Ltd, Dalbit Petroleum (T) Ltd, GAPCO Tanzania Ltd, Hass Petroleum Ltd, Lake Oil Ltd and Mansoor Oil Industries Ltd.

Others are Mount Meru Petroleum Ltd, Oilcom Ltd, Olympic Petroleum (T) Ltd, Oryx Oil Company Ltd, Puma Energy (T) Ltd, Sahara Tanzania Ltd, Societe Petroleum (T) Ltd, Star Oil (T) Ltd, Total Tanzania Ltd and Vivo Energy Tanzania Ltd.

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Author: FAUSTINE KAPAMA

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