2 March 2010

Tanzania: Tanker Seized Over 'Dirty Fuel'

A foreign tanker has been impounded at the Dar es Salaam port after unloading 14.1million litres of contaminated oil valued at $3,200,302 (Sh4.16billion).

The Citizen has established that Mt Priya was about to leave the port at around 10pm last Thursday when officials from the Tanzania Bureau of Standards (TBS), the Tanzania Revenue Authority (TRA), the police and the High Court stormed the vessel, ordering the crew not to sail away.

TBS inspected and tested the jet fuel imported by MGS International Limited and Camel Oil Tanzania Limited and Oryx of Dar es Salaam and recommended that the product be barred from entering the Tanzanian market.

"TBS inspected and tested Jet A1 imported by MGS international and Oryx. The sample tested failed the critical perimeters," TBS letter to TRA signed by the bureau's acting director Mr S Kinabo read in part.

Section 9 (1) of the import regulation states that no person shall in any manner unload for the Tanzanian market any commodities or products not conforming to the requirements of the Tanzania standards or the commodity or product on which no batch certificate has been issued by the bureau.

The tanker was halted after MGS and Camel Oil had successfully filed under certificate of urgency a civil case in the High Court claiming $3,200,302 from owners and charterers of the vessel for breach of contract and negligence.

On Thursday, the plaintiffs obtained an interim order restraining the giant ship from leaving the Dar es Salaam port.

Justice Njengafibili Mwaikugile ordered that the respondents or their agents be stopped from removing the tanker from the Dar es Salaam port pending a full hearing of the suit against them.

The judge further said that the amount of money involved was colossal and for the interest of justice the preliminary order had to be granted as requested.

Through their lawyer, Mr Octavian Temu, the two oil marketing companies argue that the quantity and quality of the product loaded was certified at the port of loading by the loading supervisor and acknowledged by the master of the vessel based on the standards stipulated in the contract between them and the vessel owners.

They say they were surprised that on arrival at the Dar es Salaam port, the product was found to be contaminated and below specified flash point. TBS report on the test of the product forms part of exhibits in court.

The oil dealers insist that the alleged contamination took place after the petroleum product had been loaded into the vessel.

"The Mt Priya as a carrier, owners as well as operators were responsible for delivering the goods in all its quantum and purity at the port of destination which they have failed to do, hence causing a $3,200,302 loss to us,"the plaintiffs argue.

They want to be compensated for the loss suffered as well as costs of freight, insurance, wharf charge, handling charges, custom duty, Value Added Tax (VAT), bank interests and charges.

This is the second time in two years a foreign ship is being barred from leaving the Dar es Salaam port under similar circumstances.

In March 2008, a Chinese cargo vessel was barred from leaving the port on allegation that it unloaded contaminated gas oil whose importer had rejected as substandard.

Justice Amir Mruma of the commercial division of the High Court granted an application by Gapco Kenya Limited to temporarily halt MT Asia Lion vessel until the case over the disputed consignment of gas oil was heard.

However, after a protracted court battle the two parties agreed to settle the dispute out of court.

Gapco Kenya Limited engaged in import, export and sale of petroleum products in Tanzania and its neighbours brought a suit against owners and operators of the ships Sturrock Flex Shipping Limited for $3 million (by then Sh3.4billion) after laboratory tests had shown that the gas oil was contaminated.

It contended that upon the arrival of the ship in Dar es Salaam, the product underwent laboratory tests which showed it was highly contaminated and had lost its quality as a petroleum product.

The same court granted an order preventing a cargo ship MV Salina from sailing out the Dar es Salaam port allegedly for discharging shortlanded and contaminated Sulphur.

Chemical Initiative (Pty) Limited sued owner and master of the vessel MV Salina upon discovery that there was a shortfall of 2000 metric tones of Bright Yellow Sulphur out of 12,336 MT it had ordered from Saudi Arabia.

The plaintiff claimed that the initial estimates indicated that the approximate loss arising from the matter could be over $200,000.

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