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Firms fight over oil supply contract

COUNTIES
By By John Muthoni | January 24th 2014

By John Muthoni

The High Court will determine a case in which Total Oil has sued National Oil over two deals that the companies had entered.

Before High Court Judge Justice Jaqueline Kamau, Total Oil said it incurred losses due to National Oil’s failure to honour a contract of private purchase that was outside the Kenya Open System tender in which it was to supply 7,000 metric tonnes of gas oil.

The plaintiff told the court that National Oil breached the agreement by increasing prices of the consignment without notice to Total Oil by more than 3$ per barrel, an equivalent of about Sh250.

Total Oil is claiming more than Sh70 million, noting that it lost more than Sh16 million in the first deal.

The company wants the court to order National Oil to pay for defaulting to deliver the first consignment on time, and also be charged a penalty of more than Sh200,000.

In a statement signed by Total’s supply manager Mary Muiruri, the company said, “Without notice to the plaintiff, the defendant unilaterally and arbitrary abandoned the mode covenanted and invoiced the plaintiff at the price mean of 95.3$ as opposed to the contractual price of 91.5$ per barrel. This is unjustified and illegal.”

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