Petrol station dealer gets reprieve in row with Total Kenya
In settling a 17-year battle between the Kenya Revenue Authority (KRA) and oil marketer Total, the Court of Appeal has now condemned importers to bear responsibility in the event of any tax fraud committed by their clearing and forwarding agents. PHOTO | FILE | NATION MEDIA GROUP
What you need to know:
In a sworn statement, Ms Muindi said she has operated as a dealer for Total for the last 10 years since Total took over Caltex in 2009.
Total has been abusing its higher bargaining power by implementing dealer margins that are contrary to those prescribed by law and falsifying accounts.
The High Court has referred a dispute between Total Kenya and a petrol station dealer to arbitration.
Justice Francis Tuiyot directed the dispute between the petroleum distributor and Bill Investments to an arbitrator after the parties agreed to arbitration. The judge further granted Bill Investments interim orders, stopping Total from terminating their dealership agreement.
The company, through its executive director Cecilia Muindi, moved to court seeking orders to stop Total from terminating its licence. She said Total decided to suspend its licence on May 4.
In the court documents, the dealer accuses Total of frustrating the dealership agreement, leading to losses amounting to Sh50.6 million.
She also wants Total compelled to hand over the control of the New Mombasa Road petrol station, pending the determination of the case.
NORMAL OPERATIONS
Ms Muindi also wants the company forced to replace the decommissioned tanks expeditiously and restore normal operations at the station.
In a sworn statement, Ms Muindi said she has operated as a dealer for Total for the last 10 years since Total took over Caltex in 2009. The agreement was renewed in February 17, 2017.
She said the lease agreement has been extended several times between parties since then and last year, the parties signed another deal subject to successful completion of a six-month probationary period.
After the probation, she said, they agreed that the agreement would be binding for the remainder of the period, unless terminated by either party in accordance with the provisions of the deal.
However, she added, Total has frustrated the execution of the agreement, making it impossible to meet its obligations. She said she was forced to scale down the operations to 40 per cent capacity because of Total’s actions.
ILLEGAL MARGINS
She said she registered a complaint against Total for implementation of illegal margins and environmental degradation from its leaking tanks to the Energy Regulation Commission (ERC).
Whereas the complaint remains unresolved, she said Total has threatened to terminate the agreement to frustrate the ERC process. Ms Muindi added that she depleted the company’s working capital because Total has been abusing its higher bargaining power by implementing dealer margins that are contrary to those prescribed by law and falsifying accounts.
Because of the untenable position, the parties agreed to meet on February 28 to have Total take over the operations of the station for 30 days as her company sources for funds to increase its working capital. But Total failed to commit and return the station to her as agreed.
