Lawyers for Seed Funds Savings and Loans Company Limited have prayed an Accra High Court to assist in the recovery of $3 million from construction company De Simone Limited and petroleum giant, Total Ghana Limited.
Faisal Gbadegbe, a member of Kulendi@Law, who moved the motion for summary judgment before the Commercial Court, Accra said the two defendants were simply delaying and frustrating the recovery of the money paid to Total.
He said the companies are putting forth defences that were not bona fide and raise no significant triable issues.
The $3m loan
According to Kulendi@Law, the Seed Funds Savings and Loans Company Limited in May 2018 agreed to lend a sum of $10 million to the construction company De Simone.
This was to enable De Simone purchase four plots of land located at Roman Ridge and Airport Residential Area from the petroleum company.
This sum was to be disbursed based on terms stipulated in a Memorandum of Understanding (MOU) entered into between the construction company and the financial institution.
The lawyers say this agreement required that Seed Funds transfers the first tranche of $3m to the Petroleum Company upon the execution of a Sale and Purchase Agreement between the Construction Company and Total Petroleum, an obligation which they immediately met after executing the MOU.
They explain that Total under the Sale and Purchase agreement between Total and De Simone which formed the basis of the MOU agreement it was required to procure a 50-year extension of the lease, provide evidence of the submission of an application to the Lands Commission for consent to assign the properties to the construction company as well as a execute a formal deed of assignment.
This sale they say was expected to be completed within a reasonable time (a period not exceeding seven months).
They argue that despite advancing the $3m to Total Petroleum after the execution of the MOU, the construction company had failed to live up to its obligations of submitting documentation as proof of having procured the Lease extension and the necessary consents to enable 2nd and 3rd tranches to be made available.
The savings and loans company explains it, therefore, decided not to continue with the transaction but rather to terminate it and demand a refund as this amounted a breach of the MOU.
Construction Company fights back
The construction company in its response to the application say the decision of the Savings and Loan Company to pull out of the financial transaction was improper.
They want the court to rather compel it to release the remaining $7 million. De Simone’s lawyer says that at the time Seed Funds opted to terminate the MOU and demand a refund, the seven-month timeline had not elapsed but rather the company acted based on its own estimation that the time left will be insufficient for the terms of the agreement to be met.
They, therefore, want to the court to dismiss the application for summary judgement and rather allow the main case to be heard.
Total Petroleum position
Lawyers for Total Petroleum say no evidence has been advanced to show the existence of any relationship between Seed funds Savings and loan and it to merit claim of refund involving it.
Member of the legal team of Total urged the court to reject the summary judgement application filed by Seed funds.
It’s not clear at this stage why the Petroleum company would want to hold on to the funds and insist they are not parties to the agreement despite receiving the money directly from Seed Funds savings and loan after the MOU has been terminated.
Lawyers for Seedfund declined to comment on this explaining the matter is pending before the court. Efforts to get in touch with the other parties in the case for a comment has so far not yielded much.
The High Court has meanwhile adjourned proceedings to February 25 to deliver its ruling.