Cameroon’s state-owned oil refinery (SONARA) has won a contractual dispute in the High Court of England and Wales, defeating claims made by a Nigerian oil supply company worth over USD 100 million.

Lagos-headquartered oil company Sahara Energy Resource claimed that Société Nationale de Raffinage (Sonara) should pay for interest, penal charges and foreign exchange losses it incurred due to delayed payments by the Cameroonian company.

On 9 December, Mrs Justice Cockerill, sitting in London’s Commercial Court, found that the claim was time-barred and too remote.

Sahara and Sonara signed an agreement to supply crude oil in 2013, with Sahara’s purchase of oil to be sold on to Sonara financed by a trio of Nigerian banks. After the oil refinery’s payments were delayed, the company found itself suffering losses due to interest rises, foreign exchange changes and penalty clauses.

The contract provided for Sonara to ultimately cover the missed payments and a series of negotiations took place regarding the additional losses, leading to a 2019 joint report, which Sahara claimed was a binding agreement to cover the costs.

Sonara, based in Limbe, at the heart of Cameroon’s oil industry, disagreed and the court in London has upheld that view, finding that it “was no contractual agreement; it was at best an agreement to agree” and that the foreign exchange losses were too remote to be covered by the oil refinery.

The Cameroonian company was originally represented by Latham & Watkins, which left the case in January this year, replaced by a team from Squire Patton Boggs led by partner Timi Balogun, who joined the firm in 2021, with director Ian Debbage senior associate Henry Goldschmidt, and associates Daniel Ajuh and Henry Spence.  They instructed barristers Timothy Young KC of Twenty Essex, and Stephen Du and Joseph Rich of 7KBW.

Sahara was represented by Reed Smith, instructing Riaz Hussain KC of Atkin Chambers.

Source: African Law and Business