The Supreme Court has urged the Italian energy group, Eni, and an indigenous oil company, Springfield Ghana Limited, to seek an out-of-court settlement in their legal dispute over the unitisation of their respective oil fields (Sankofa and Afina) in the interest of the country.
Springfield is embroiled in a legal tussle with Eni and its partner, Vitol Upstream Limited, following a directive by the then Minister of Energy, Mr John Peter Amewu, in 2020 to the companies to unitise their fields, located at the Cape Three Points, in accordance with Section 34(1) of the Petroleum (Exploration and Production) Act, 2016 (Act 919).
At stake in the dispute are more than 500 million barrels of crude oil.
A five-member panel of the apex court, presided over by the Chief Justice, Justice Kwasi Anin Yeboah, gave the advice yesterday after it had dismissed an application by Eni and Vitol seeking permission (special leave) to appeal a decision by the Court of Appeal not to put on hold the preservation of their accounts as ordered by the High Court.
In dismissing the application, the Supreme Court held that Eni and Vitol failed to make a case for the special leave.
“The court finds no circumstance to grant leave to appeal to the Supreme Court, as no serious error or novelty has been raised by the applicant. We, however, encourage the parties to settle the matter out of court,” the court held.
Interest of the country
The Chief Justice was particularly concerned about the legal dispute in Ghana’s petroleum industry and asked the parties if they could come together for the dispute to be resolved within the shortest possible time.
He said the parties could apply for expeditious trial and he (Chief Justice) was willing to appoint a Justice of the Court of Appeal who would hear the case every day so that it could be determined quickly.
In response, counsel for Vitol Upstream, Mr Ace Ankomah, said the technical nature of the dispute, as well as the numerous appeals and interlocutory applications, could prolong the case.
A member of the panel, Justice Gabriel Pwamang, said if technical issues were the problem, the court could appoint outside experts (assessors) who were versed in the technicalities of the petroleum industry to help resolve the dispute.
The Chief Justice followed up and added that the parties should agree to settle the dispute out of court, taking into consideration its impact on the petroleum industry and the country as a whole.
Special leave to appeal
Eni and Vitol wanted the Supreme Court to grant them permission, as required by law, to appeal the Court of Appeal’s decision not to stay the execution of the preservation order by the High Court, pending appeal.
In June this year, the High Court ordered a 30 per cent preservation of the accounts of Eni and Vitol from the operation of the Sankofa Field until the final determination of a legal dispute mounted by Springfield seeking to enforce the directive by the Minister of Energy for the companies to unitise their respective oil fields.
Dissatisfied with the preservation order, Eni and Vitol filed an appeal at the Court of Appeal, and followed it up with an application for stay of execution of the preservation order until the final determination of the appeal.
The Court of Appeal, on July 22, this year, dismissed the application for stay of execution, meaning the preservation order will be in force, even as Eni and Vitol go on with the appeal process.
In order to appeal the decision of the Court of Appeal at the Supreme Court, Eni and Vitol needed permission from the Court of Appeal to do so. The application was made, but the Court of Appeal refused to grant the leave.
In line with the rules of court, Eni and Vitol then went to the Supreme Court to seek a special leave to file the appeal.
Making his case, counsel for Eni, Mr Kimathi Kuenyehia, argued that his client had met all the circumstances for the special leave, as prescribed by law.
According to him, the Court of Appeal did not take all the evidence and facts associated with the case before dismissing the application for stay of execution.
Arguing for Vitol, Mr Ankomah agreed with the submissions by Mr Kuenyehia, and added that the preservation order had placed untoward hardship on his client, which the Court of Appeal failed to take into consideration.
In response, counsel for Springfield, Mr Thaddeus Sory, submitted that counsel for the applicants (Eni and Vitol) had failed to demonstrate any error by the Court of Appeal to warrant a special leave from the Supreme Court.
According to him, the applicants failed to prove any hardship as a result of the preservation order.
It was his case that the High Court, in granting the preservation order, took into consideration the expenditure of the two companies, as well as taxes to be paid, and, therefore, there was no issue relating to hardship.
The Supreme Court agreed with Mr Sory and, accordingly, dismissed the application for special leave by Eni and Vitol.
The disputed Sankofa Oil Filed is part of the Offshore Cape Three Points (OCTP), an area located off the coast of Western Ghana, with about 500 million barrels of oil reserves and 40 billion cubic metres of gas.
Eni is the lead operator.
Springfield, on the other hand, is the lead operator in the West Cape Three Points (WCTP), with the Afina Field.
It is the case of Springfield that various analyses and tests had shown that the accumulation of petroleum in the Sankofa field extended to its contract area (Afina Field).