Kobil entangled in Rwf507 million case

Kobil Rwanda Ltd, which is in the process of exiting the Rwandan market, is the subject of controversy in a court case involving Rwf507 million.
Kobil plans to exit the Rwandan market amidst controversies. The New Times / File .
Kobil plans to exit the Rwandan market amidst controversies. The New Times / File .

Kobil Rwanda Ltd, which is in the process of exiting the Rwandan market, is the subject of controversy in a court case involving Rwf507 million.

Kobil, arguably the country’s biggest petroleum marketer by market share, was dragged to court in 2008 over a breach of contract entered with Citiex, a transport company owned by city businessman, Gaspard Milimo, to transport oil products.

According to court documents seen by Business Times, among other deals gone bad, Citiex leased its down stream assets in Nyabugogo to Kobil following the latter’s takeover of Shell Rwanda assets in 2006.

After entering a transport contract with Kobil, Citiex went ahead to acquire trucks through loans from Rwanda Commercial Bank and Bank of Kigali to execute the contract.

The trucks were valued at Rwf420 million.  

Kobil hired Citiex trucks to facilitate the transportation of its petroleum products from Mombasa to Rwanda.

According to Andre Kazigaba, a court bailiff, Citiex was shocked when Kobil hired other transporters to execute the job.

“My client has suffered losses in form of accumulated interests over these bank advances and has become a bad client…” Kazigaba Andre told Business Times in an interview.

Citiex is demanding financial compensation worth Rwf507 million.

Court documents indicate that in 2010, the Commercial Court delivered its judgment in absence of Kobil’s lawyers after a number of adjournments—a decision which the defendant appealed by seeking a retrial.

In some of the submissions to court, Kobil claimed that its lawyer, failed to appear in court due to illness even as the plaintiff proved to court that on the fateful day, the lawyer was in Nyagatare pursuing another court case.

The final verdict was delivered by the Supreme Court last year when it described the oil marketer’s appeals as having no basis.

Kobil later appealed to Justice Minister, Tharcisse Karugarama, to stay the execution of the court ruling which he turned down.

“We have checked with the Supreme Court and we are satisfied that there is a definitive judgment that qualifies your company as a judgment debtor,” Karugarama wrote to Kobil.

Fearful of the possibility of its assets being attached, Kobil sought the intervention of the Office of the Ombudsman and obtained a letter in June this year staying execution of the judgment.

Efforts to get a comment from Kobil were futile as its attorney, Toy Nzamwita, avoided our questions.

When contacted for a comment, he promised to call back but did not.

Kazigaba said that Kobil’s BK accounts to permanently in negative balance, which makes it impossible attach the cash assets.

Upon its entry in the local market, Kobil established an expansive retail network in the country and grew its asset base through acquisitions.

In addition to serving the domestic market, Kobil designated Rwanda as an export route to the neighbouring Eastern Democratic Republic of Congo and the larger Central African region.

Kobil Rwanda is a subsidiary of Kenyan-based KenolKobil which has operations in nine African countries.

In September this year, Kenolkobil reported a net loss of $46 million for the six months through June.

It blamed a “depressed” global economic environment, lower oil prices, high domestic inflation and borrowing costs.

KenolKobil is the subject of a takeover from Swiss-based oil company Puma Energy

 

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