Afreecan Oil demands over E77m from ESWACAA
MBABANE – Afreecan Oil and Chemicals (Pty) Ltd is demanding over E77 million from ESWACAA for allegedly dispossessing it of its business and failure to pay E280 000 per month for services rendered.
For allegedly being dispossessed of its business, Afreecan Oil and Chemicals (Pty) Ltd wants the Eswatini Civil Aviation Authority (ESWACAA) to restore its business or pay them E66 million, alternatively.
The company is also demanding E11 159 421.81 which it alleged ESWACAA refused to pay per month as due consideration for services rendered for the operation and management of an aircraft fuel farm at King Mswati III International Airport.
In total, Afreecan Oil and Chemicals is demanding E77 159 421.80 from ESWACAA. In its particulars of claim, Afreecan Oil and Chemicals stated that in 2016, the two parties entered into a technical (specialised field of operation) agreement which was negotiated verbally.
The communication was also through emails and correspondences exchanged between the parties.
The Director of Afreecan Oil and Chemicals, Mfanukhona Dlamini, and its officers, from time to time, as well as the director general and Board of Directors and/or ESWACAA’s executive officers represented both parties during the negotiations.
Operate
The terms of the agreement included that Afreecan Oil and Chemicals would operate and manage the aircraft fuel farm at King Mswati III International Airport on behalf of ESWACAA for a period of five years, renewable for a further five years.
The parties, according to Afreecan Oil and Chemicals, agreed that ESWACAA would remunerate the former at the standard rate applicable in such operations pending finalisation of a service fuel level agreement spelling out the fees for the services rendered.
It was further agreed that prior to service level agreement being reduced to writing, the normal standard applicable rates of remuneration would apply contextually.
After the conclusion of agreement, according to Afreecan Oil and Chemicals,
A view of the King Mswati
CLAIM
Special damages
Total
III International Airport.
AFREECAN OIL AND CHEMICALS’ CLAIM FROM ESWACAA
Unlawful loss of business
Theft of technology and business know how
ESWACAA duly handed over the premises to the former.
Afreecan Oil and Chemicals is said to have proceeded to discharge its obligations. The company informed the court that it rehabilitated and corrected the structural, mechanical and technical predicaments that rendered the fuel farm unworkable.
Afreecan Oil and Chemicals submitted that it found and trained personnel to operate the fuel farm after it had been rehabilitated and that it sourced the supply of Jet A1 fuel from a properly gazetted and authorised fuel supplier in Eswatini.
The company informed the court that it managed and operated the fuel farm facility on behalf of ESWACAA for a period of five years renewable for another five years.
Prior to Afreecan Oil and Chemicals taking possession of the fuel farm, it was allegedly agreed that the plaintiff (Afreecan Oil and Chemicals) would repair and rehabilitate the existing facility in order that it meets basic international requirements. Afreecan Oil and Chemicals was, according to the court papers, tasked with repairing and rehabilitating the existing aircraft fuel farm for E1 500 000.
In May 2016, Afreecan Oil and Chemicals, in terms of the agreement,
AMOUNT
E25 million
E5 million
E36 million
E66 million
was allegedly given possession of the premises by ESWACAA. The aircraft fuel farm is situated at King Mswati III International Airport. Afreecan Oil and Chemicals allegedly undertook and carried out the repairs and rehabilitation of the fuel farm within three months.
Established
It was submitted for Afreecan Oil and Chemicals that during the repair and rehabilitation of the fuel farm, it concurrently established the operation and management of offices, simultaneously recruiting and training the personnel. “The plaintiff duly developed and ran the business of the fuel farm for a total period of five years and five months from the date of occupation. The plaintiff undertook its obligations and performed in two phases,” reads Afreecan Oil and Chemicals’ particulars of claim.
The veracity of these allegations is still to be tested in court. The company informed the court that it did this by bringing the fuel farm to a level that met the minimum standards required, which was done in 2016, within six months after the fuel farm commenced.
It also allegedly carried out the final works to ensure that the fuel farm met all the required international standards for continuity being the second phase of the rehabilitation, which was kicked off in early 2017 and completed in June 2017.
Despite not being gazetted and duly licensed to supply fuel, through diligence Afreecan Oil and Chemicals was said to have come up with a stratagem where Jet A1 fuel would be accessible by all aircraft that would utilise KMIII International Airport and trained personnel to run the fuel farm.
Accepted
ESWACAA, according to Afreecan Oil and Chemicals, accepted the implantation of its stratagem and allegedly handed over the fuel farm to it on May 24, 2016.
This is said to have marked the commencement of the agreement, after consultation with ESWACAA’s EXCO members and the company’s officers. A service level agreement was said to be put in place.
“However, despite constant reminders and request for meetings, the defendant (ESWACAA) failed to honour the oral agreement by refusing to enter into the service level agreement hence the plaintiff adduced the best standard claiming remuneration being a calculation totalling the sum of E280 000 per month for services rendered,” reads Afreecan Oil and Chemicals’ papers.
The company also informed the court that this led to it using all its resources, including personal, to meet its financial obligations as regards expenses given that there was still no service level agreement and the company was allegedly not paid for services rendered. “The subsequent acts of the defendant were deliberate and were designed to sabotage the smooth operation that had been created by the plaintiff, the intent being to seek to justify the unlawful self-help act by the defendant, which consequently led to the defendant dispossessing the plaintiff of its business without any lawful order of court.”
Afreecan Oil and Chemicals submitted that it went out of its way to adhere to the original agreement and was now demanding payment.
“Subsequently, due to the objective of ESWACAA, its Board of Directors and EXCO members, plaintiff was elbowed out and the true objectives of the impediments put up by
ESWACAA were revealed when they unlawfully dispossessed plaintiff of his business in a self-help action on or about July 30, 2021.”
ESWACAA filed a notice of exception in that Afreecan Oil and Chemicals’ allegedly lacked the necessary averments to sustain a cause of action.
The court, by consent of the parties, set aside the application for exception.
ESWACAA informed the court that Afreecan Oil and Chemicals claimed an amount of E11 159 421.81 as due, owing and payable, presumably from the alleged agreed amount of E280 000 per month. ESWACAA submitted that there were no allegations at all on how many months make the E11 159 421.81, no demonstration on how the said sums arose and what services were rendered under which contract. “There is also no basis for the claim of E280 000 and therefore, no averments necessary to sustain the cause of action.
Under Afreecan Oil and Chemicals’ claim of the sum of E66 million, the company, according to ESWACAA, introduced a vindication claim for its rights of ownership that it lost technology, staff and goodwill, without any allegations on how it lost the business, what the business was and how the amount of E25 million was justified.
Claimed
ESWACAA also told the court that this also applied to the amount of E5 million claimed by Afreecan Oil and Chemicals for theft of technology and business know-how. The amount of E30 million, according to ESWACAA, was a conclusion claim was a conclusion of both liability and quantum that were without any averments necessary to sustain the claim.
“There is also a special damages claim of E36 million without any allegations of whether or not these damages were actual or presumptively contemplated by the parties as losses, ascertained at the time when the contract was entered into,” read ESWACAA’s papers.
Afreecan Oil and Chemicals is to file amended particulars of claim and the defendant would respond to it. The matter is pending in court.
Afreecan Oil and Chemicals is represented by Sipho Nkosi of S.A. Nkosi Attorneys and Linda Dlamini of Linda Dlamini and Associates. Lucky Howe of Howe Masuku Attorneys appears for ECASWAA. The matter is before Judge Mumcy Dlamini.