Libya Oil Ethiopia Ltd. is suing Weyra Transport S.C. and Privatization & Public Enterprises Supervising Agency (PPESA) for unlawfully transferring three gas stations it owned to a third party, Trans Ethiopia Plc.
The stations, located at Gotera area in Addis Abeba, Nekemte and Bishoftu, were part of a retail deal Libya Oil had with Weyra Transport Plc.
During the hearing which was held on March 17, 2015, at the Lideta Federal High Court, Libya Oil’s lawyer stated that its client had a cooperation agreement with Weyra for the latter to retail petroleum at the plaintiff’s stations and had agreed to give the stations back to Libya Oil in case of the contractual termination and transfer of Weyra itself to third party.
Founded in 1986, Weyra Transport S.C, a former state owned liquid freight transport company, which provides and distributes fuel and gas, was acquired by Trans Ethiopia Plc,one of the companies under the Endowment Fund for Rehabilitation of Tigray(EFFORT) in May 2014 at a cost of 268 million Br. However, contrary to its contractual agreement, Weyra did not hand back the stations to the plaintiff after the contract between them was terminated.
When Weyra was acquired by Trans Ethiopia Plc, the three stations were transferred to Trans along with other assets that belonged to Weyra, Libya Oil claimed. The lawyer asked the court to declare the return of the stations to Libya Oil in compliance with the contractual agreement.
The PPESA’s lawyers, however, argued that the stations were not actually sold to Trans, adding that Libya Oil was also not the owner of the stations. Its claims of ownership surfaced only after it had entered into a ritual agreement with Weyra, PPESA claimed. It also said that until the ownership of the gas stations was established, the Agency had the mandate to hold them as a trustee and could not transfer them to the plaintiff.
PPESA argued that it should not be indicted as it was not involved in the contractual relationship and that the stations were brought to it in trust by Weyra. Trans Ethiopia Plc is the owner of Weyra and no claim should be levied against PPESA. The Agency further argued that Weyra had not transferred the stations to Libya Oil , because they were not owned by Libya Oil in the first place, but rather had been nationalized by proclamation.
Answering a question from the judge, the PPESA also said that the contract was only about retail and did not include anything about an ownership issue. However, the plaintiff argued that PPESA could not sell the property which it did not own, adding that the agency could not claim that it should not be sued, while admitting that the properties in contention had been passed to a third party on trusteeship.
The plaintiff explained that the oil companies could not have their own retailing licenses. So they could either appoint retailers to work from gas stations owned by Libya Oil , or deal with retailers who have their own stations. The deal with Weyra, according to Libya Oil , was of the first type.
Noting that it had evidence of possession and ownership, the plaintiff also said that PPESA’s act of seizing and transferring the stations to a third party was unlawful. Libya Oil refused to sue Trans saying that its contract was signed with Weyra and hence Weyra was liable.
Weyra’s lawyer, who was passive during the process of the hearing standing along with the lawyers of PPESA, denied that its client had made an agreement to pass the stations to the plaintiff after the termination of the contract.
The court which heard the claims and counterclaims made an appointment for another hearing on May 4, 2015, to rule on the preliminary objections of the parties.
Libya Oil Ethiopia Ltd joined the petroleum distributing business in Ethiopia in November 2008 after buying the assets of the former Shell Ethiopia Ltd for 99 million Br. The stations it claimed to have owned in this file have been suspended from giving service following the institution of the legal suit.
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