The Accra High Court is preparing to hear a complex case on June 10, 2025, pitting Dram Oil and Trading Limited against Alfapetro Ghana Limited. At the heart of the dispute is an alleged breach of a distribution agreement, with Dram Oil seeking to recover a substantial $2.29 million from Alfapetro Ghana. This sum encompasses principal under-recoveries, direct sales proceeds, and accrued interest, throwing a spotlight on potentially significant rifts within Ghana’s petroleum distribution sector. Court documents detail Dram Oil’s claims, setting the stage for a legal showdown.

The seeds of this conflict were sown in 2012 when Dram Oil and Trading Limited entered into a distribution agreement with Alfapetro Ghana Limited. According to Dram Oil’s suit, Alfapetro was to handle the distribution of 7,100 metric tons of petroleum products, with the understanding that proceeds would be deposited into a specific account at UT Bank, now GCB Bank. Dram Oil, in turn, agreed to pay Alfapetro a distribution fee of $8.00 per metric ton. But the relationship soured, leading to the current legal battle.

Dram Oil alleges that Alfapetro failed to remit the full under-recoveries received from the National Petroleum Authority (NPA) and direct sales proceeds from Oil Marketing Companies (OMCs), triggering the legal action now pending before the Accra High Court. The case hinges on whether Alfapetro adhered to the terms of the 2012 agreement, and whether Dram Oil is entitled to the substantial damages they are claiming.

One key component of Dram Oil’s claim revolves around what they term “Tranche 1 under-recoveries.” The company is seeking to recoup $887,671.69, alleging that Alfapetro received this amount from the NPA under Tranche 1 but failed to transfer the funds. Dram Oil is also seeking a hefty sum in accrued interest on this amount, which they calculate at GH¢54,458,449.38, based on an annual rate of 46% from December 2013 to December 2023. Dram Oil argues that Alfapetro had a clear obligation to disclose and liquidate the Tranche 1 payments, and their alleged failure to do so has caused significant financial harm. The high interest rate being claimed underscores the length of time this dispute has been simmering.

A further element of Dram Oil’s case involves “Tranche 2 under-recoveries,” where they are seeking $79,977.26, claiming Alfapetro received these funds but did not remit them. The interest claimed on this amount is GH¢3,767,248.87, calculated at 46% per annum from April 2016 to March 2024. As with Tranche 1, Dram Oil argues that Alfapetro’s alleged failure to liquidate Tranche 2 payments constitutes a clear breach of the distribution agreement.

Beyond the under-recoveries, Dram Oil is also pursuing $1,325,207.45 in what they describe as outstanding direct sales proceeds. They claim Alfapetro received these funds directly from Oil Marketing Companies (OMCs) but failed to pass them on. Interest on this sum is claimed at GH¢78,028,214.50, calculated at 46% per annum from December 2013 to December 2023. Dram Oil contends that Alfapetro was obligated to disclose and pay these direct sales proceeds, and their alleged failure to do so represents a significant breach of their contractual obligations.

According to Dram Oil, the initial distribution agreement came about after Mr. Eric Forson, Managing Director of Alfapetro, approached Mr. Randolph Koranteng, CEO of Dram Oil, in 2012, seeking a distribution contract. Dram Oil claims the agreement was rooted in Mr. Forson’s request and Mr. Koranteng’s willingness to provide assistance. The agreement was formalized on September 13, 2012.

While the provided document outlines Dram Oil’s claims in detail, Alfapetro’s perspective remains largely unknown at this stage. The court date in 2025 will offer Alfapetro an opportunity to present its defense. Key questions remain unanswered: What is Alfapetro’s explanation for the alleged non-payment of funds? What evidence will they present to counter Dram Oil’s claims? The legal proceedings promise to shed light on these crucial aspects of the dispute.

The Accra High Court, Commercial Division, is scheduled to hear the case on June 10, 2025. The court will need to carefully assess the evidence presented by both parties to determine whether Alfapetro breached the distribution agreement and whether Dram Oil is entitled to the substantial damages they are seeking. The outcome of the case could have broader implications for similar distribution agreements within Ghana’s petroleum industry.

Dram Oil’s determined pursuit of $2.29 million from Alfapetro underscores the high stakes involved in Ghana’s oil distribution sector. The upcoming court case will turn on the interpretation of the 2012 distribution agreement and the evidence presented by both sides, with the potential to set important precedents for financial accountability and contractual obligations within the industry. The core contention revolves around Dram Oil seeking recovery of under-recoveries and direct sales proceeds. The case highlights the critical importance of well-defined contractual terms and rigorous financial accountability within the petroleum sector, where even seemingly small disagreements can escalate into multi-million dollar legal battles.