High Court dismisses motion by Deloitte, awards cost of GH2000 against them


The Accra High Court has rejected a request from Deloitte and Touché to separate two of the 10 issues that need preliminary determination in a case involving Dram Oil & Trading Limited and Deloitte & Touché.

Deloitte and Touché had sought a ruling on whether a previous judgment by Justice Buadi on May 29, 2019, conclusively settled matters related to Deloitte’s approach in preparing and issuing the Audit Report dated March 4, 2019. They also inquired whether Dram Oil could re-litigate the issues concerning Deloitte’s approach in the Audit Report.

Dram Oil countered in response that there was a fundamental disagreement, asserting that Justice Buadi’s ruling was not a final judgment but an Interlocutory decision. Dram Oil contended that the only conclusive judgment was delivered by Justice Aryene on May 18, 2015, in Dram Oil’s favor. They argued that the negligence in the approach and preparation of the Audit Report was not an issue before Justice Buadi’s court, as the only duty was to ascertain the liability determined by Justice Aryene’s judgment.

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Dram Oil argued that resolving the disputed issues (Issues no. 7 and 8) required evidence from qualified witnesses, making it impractical to separate the trial of these issues preliminarily. They emphasized that a more cost-effective, speedy, and just resolution would occur if all the issues were determined in a single trial, as per the Rules of Court.

The court sided with Dram Oil, dismissing Deloitte’s motion. The court stated that separate trials should only be ordered in special circumstances or grounds, as it deviates from the principle that all disputes between parties should be tried together. Since Deloitte failed to demonstrate any special circumstances, the court awarded a cost of GH2000 against Deloitte.

Background of the case

In 2011, Oil Marketing Company, Dram Oil entered into a distribution agreement with Vihama Energy Ltd whereby Dram Oil would import petroleum products into Ghana and Vihama Company Limited through its government approved bulk distribution (BDC) license would store, distribute and sell the products on a wholesale basis to oil marketing companies (OMC’s) on behalf of Dram. Subsequent to this agreement, Dram secured a finance facility from Cal Bank and imported 16m litres (13,244mt) of gasoline into Ghana at a cost of $950 per metric ton. The cargo was discharged into the storage facility of the Bulk Oil Storage and Transport (BOST) Company, a government owned company, on the 29th of December 2011.

Upon arrival, Vihama refused to sell the cargo claiming that it had its own cargo to sell and could therefore only sell the Dram cargo after it had disposed of its own cargo. As the Cal bank’s facility granted to Dram Oil was a 90day facility, it became apparent that Dram would be unable to amortise the loan as per schedule. To that end Dram Oil entered into another agreement with another BDC Licensed company to sell the cargo. Cal bank objected to the arrangement  and insisted that Dram Oil works with Vihama. Consequently,  a tri- partite agreement at the insistence of Cal bank was executed between all three parties on the 23rd of January 2012which was to govern the operation of the transaction.During this period, not a single drop of the Dram cargo had been sold and remained unsold deep into February with Dram Oil facing a default situation with Cal bank. However, the price of the cargo kept on rising on the market and reached its highest peak of $1200 per metric ton in March making it a significantly profitable transaction which would amortise the debt completely despite the delay. At this point Vihama reverted by using strong arm tactics and against the executed distribution agreement offered to purchase all of the cargo from Dram Oil at a wholesale price to help it resolve its situation with Cal bank. Two contracts were therefore executed between the Managing Director of Dram Oil and Vihama for the sale of the cargo of 13,244 metric tonnes on the 29th of February 2012 and early March 2012.Vihama subsequently started selling the cargo and made payments to Dram Oil accordingly enabling it to amortize the loan with Cal Bank.

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On completion of the payments however, there was still some amounts outstanding to Cal bank on the transaction. Cal Bank Thus, sought to demand payment of the overdue sums from Dram Oil. The matter ended up in court and Dram Oil enjoined Vihama to the suit against the wish of CAL Bank on the basis that

1.The overriding agreement was the tri-partite agreement

2. The subsequent agreement between Dram Oil and Vihama was unlawful

3. Vihama, as per the tr-partite agreement had therefore not rendered accounts of the sales of the cargo sold in March 2012 to Dram and Cal bank.

On this basis, therefore, the parties could not ascertain any indebtedness until full accounts had been rendered on the sales of the cargo.

Vihama opposed this argument on the basis that it had legitimately purchased the cargo on the 29th of February and early March and so had full proprietary rights to the cargo and subsequent sales and so did not need to render accounts.

On the 18th of May 2015 before Justice Novisi, the court gave judgment in favour of Dram Oil and held that the subsequent sales contract of the 29th of February 2012 and early March 2012 were unlawful as Cal bank was not a party to these contracts and that the overriding agreement was the tri-partite agreement signed on the 23rd of January 2012. She further ordered that an independent auditor be appointed to audit the accounts of Vihama to determine the monies received by Vihama from the sales of the cargo under the tripartite agreement of the 23rd of January 2012 with further orders to be made by the court on receipt of the auditor’s report.

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Deloitte was subsequently appointed by the order of the court with Dram Oil as payee for its services.

Deloitte presented its final report to the court which adopted the report in its entirety.

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