Lonrho loses case against RAM Petroleum

HIGH Court judge Justice Edith Mushore has ruled in RAM Petroleum’s favour in a fuel delivery contract dispute the company was embroiled in with Lonrho Logistics over 120 000 litres of fuel. 

Lonrho had approached the court claiming that RAM had failed to deliver the fuel over a misunderstanding regarding payment of duties and levies on the product.

In their court application, Lonrho said they had entered into a fuel delivery contract with RAM in 2016 in which the latter would purchase fuel on their behalf.

Lonrho reportedly ordered a consignment of 150 000 litres of fuel on November 1, 2018, but only received 30 000 litres.

The logistics company claimed that it had approached the court challenging the suggestion by RAM that it should be responsible for the duty of the remaining fuel stock being held at the National Oil Company of Zimbabwe (NOIC) as required by the Zimbabwe Energy Regulatory Authority (Zera).

“Unexpectedly on the 17th of January 2019, Zera announced that the government had enacted a law and in particular S1 10/2019 which required all oil companies such as the defendant to account for/or to declare their fuel stocks which were as of that date in the bonded facilities and to pay an increase in duty against the quantities of fuel still being held in the facility.

“As it was appropriate to do so as the owner of the 120 000 litres of fuel were the plaintiffs, the defendant (RAM) immediately advised the plaintiff (Lonrho Logistics) of those built-up costs.

“After the plaintiff’s representative expressed outrage, the defendant proposed solutions, those being that; Lonrho pay the difference of duty of $1.65, Lonrho can draw down at the current price of the fuel to exhaust the prepayment or that RAM refund Lonrho the total amount prepaid,” the logistics company had averred.

However, in delivering her judgment, Justice Mushore noted that since Lonrho had previously denied the suggestions offered by RAM, it no longer had the authority to demand that the fuel be delivered.

“It is my considered view that the plaintiff’s failure to take delivery when it was tendered repeatedly and the plaintiff having assumed the risk in the product in accordance with the law; deprives the plaintiff the right to now demand delivery of 120 000 litres of product, without paying for the built up cost.

“Accordingly, I order as follows; the plaintiff’s claim is dismissed.

“The contract entered into between the parties wherein the plaintiff purchased 150 000 litres of fuel from the defendant, be and is hereby dismissed,” Justice Mushore ruled.

She also consented to the suggestion by RAM that they reimburse Lonrho the $159 300 paid for the purchase of the fuel.  – Daily News