Petrol dealer asks court to fine Engen-Rwanda

Sunday March 18 2018

A petroleum storage facility in Karuruma,

A petroleum storage facility in Karuruma, Kigali. Petroleum dealer Valens Kajeguhawa and Engen-Rwanda are in court over a lease agreement for the facility. PHOTO: Cyril NDEGEYA 

By ROBERT MBARAGA
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A Rwandan petroleum dealer, Valens Kajeguhawa, has asked the Supreme Court to impose a fine and punitive damages to transnational oil firm Engen-Rwanda, for “delaying” a multibillion court case that is pending before the Supreme Court.

The two parties were recently in court over the lease agreement of petroleum storing facilities in Karuruma, in Kigali. However, Engen-Rwanda requested the court to adjourn the case for three months, citing concerns over legal representation.

“I got a letter from our lawyer Jean Claude Kabera telling us that he was withdrawing from the case, citing personal reasons,” said Sarah Doukoure, the managing director for Engen-Rwanda, adding, “He is the lawyer who has handled this case for the past five years, and finding a replacement would require at least than three months,” she added.

Mr Kajeguhawa’s lawyers termed the request to adjourn the case a “delaying tactic, which should not go unpunished by the Supreme Court.”

According to the lawyers, Mr Kajeguhawa and his companies are incurring losses linked to the delay in concluding the case.

“Many banks have stopped working with Mr Kajeguhawa and his companies and withheld a number of credit lines that were already available because of this pending case,” Fidel Gashagaza, Mr Kajeguhawa’s lawyer told the court.

Multinational firms

This case is a continuation of a 27-year old legal tussle between Mr Kajeguhawa and petroleum multinational firms in the country.

In 1987, Mr Kajeguhawa, through his company Entreprise Rwandaise des Pétroles, entered into a ground lease agreement with Caltex Oil Corporation providing that Caltex would build petrol storage facilities on a plot owned by Mr Kajeguhawa, and in turn use the facilities for 10 years.

Caltex alleged breach of contract and took Mr Kajeguhawa to court in 1991 seeking a court order to declare that the storage facilities belonged to Caltex and a Kigali court ruled in the company’s favour.

The decision was however overturned by a Kigali court of appeal in 1994, which ordered that the facilities belonged to Mr Kajeguhawa and his companies.

In 2008, just after commercial courts were created in the country, Caltex filed a new case with the Commercial High Court, seeking a court order to compel Mr Kajeguhawa and his companies to respect the 1987 ground lease agreement, and nullify a similar deal between Mr Kajeguhawa and the French oil firm Total.

The court ruled in Caltex’s favour but Mr Kajeguhawa opposed the decision in the same court on ground that it ruled on a matter that had already been determined by the Kigali Court of Appeal in 1994.

The case was brought back to court by Engen in 2012 after the firm took over Total’s operations in 2008, claiming breach of a lease agreement between Mr Kajeguhawa and Total.