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Oil firm takes ATCL to court over fuel debt

Discussion in 'Habari na Hoja mchanganyiko' started by Pdidy, Mar 19, 2009.

  1. Pdidy

    Pdidy JF-Expert Member

    Mar 19, 2009
    Joined: Nov 22, 2007
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    Oil firm takes ATCL to court over fuel debt
    By Bernard James

    Cash-strapped ATCL has been slapped with a second multi-million suit in less than five months as misery continues to pile on the national flag carrier.

    The Tanzania government-run company was on Tuesday sued for $1,000,869 (about Sh1.3 billion) by Total (T) Ltd.

    The oil marketing company filed the suit in the High Court's Commercial Division demanding to be paid outstanding debt plus interest accrued from supplied jet fuel.

    Total claimed that between 2007 and 2008 it supplied jet fuel to the ATCL but the company did not settle the debt despite several demand notices.

    ATCL is battling another suit in the same court against South African Airways (SAA) who are demanding to be paid $4 million (more than Sh5billion) in unsettled loans.

    The South African flag carrier was ATCL's investor until they parted company due to poor business performance.

    Forming part of Total's case are copies of relevant orders for fuel supply from ATCL, delivery acknowledgment notices and unpaid invoices which were sent to ATCL.

    Through Ringo Associates (Advocates), the oil company wants the defendant be ordered to pay $901,746.01 in unsettled amount for supplied jet fuel and $ 99,123.73 in interest.

    Various communications between the two indicate that ATCL confirmed the principal debt but due to liquidity problems, it was unable to pay the outstanding amount and still appears to be uncertain as to when the debt will be paid.

    TTL said it was alarmed by media reports about ATCL's impending collapse into going to court.

    Judge Frederick Werema of the commercial division of the High Court has set April 4 as the date for a second mention of the matter.

    The Government in January released Sh2.5billion to bail it out but the amount was considered too little to make a difference.

    The airline had requested Sh3.5 billion from the Government to cover operation costs and had also requested the Government to foot its debt amounting to Sh9.1 billion as well as pay salaries for its 300 workers.

    ATCL resumed operation on January 23 this year after being suspended for almost two months for safety reasons.