Monrovia — The Chambers Justice of the Supreme Court of Liberia, Her Honor Jamesetta Howard Wolokolie, has sharply rebuked the Commercial Court for refusing to preserve the status quo in a high-stakes petroleum dispute between SRIMEX Oil & Gas Company and the Liberia Petroleum Refining Company (LPRC), ruling that the lower court erred when it declined to make its preliminary injunction effective pending arbitration.
In a detailed ruling during the October Term A.D. 2025, Justice Wolokolie held that while the Commercial Court properly compelled arbitration under the parties' 20-year Petroleum Storage Agreement (PSA), it misapplied the law by vacating injunctive relief that was necessary to protect the integrity of that arbitration.
Arbitration Ordered--But Protection Denied
The dispute stems from a September 3, 2025 presidential mandate issued by President Joseph Nyuma Boakai, revising the petroleum pricing structure to generate revenue for the National Road Fund, county road equipment, and social programs.
Follow us on WhatsApp | LinkedIn for the latest headlines
LPRC subsequently issued a circular implementing new per-gallon charges and requiring importers and terminal operators to remit additional fees.
SRIMEX objected, arguing that LPRC had no authority to unilaterally alter or terminate the 2013 Petroleum Storage Agreement ratified by LPRC's Board Resolution No. BD/2013/012. The company contended that the pricing directive substantially altered the financial structure of the PSA and amounted to expropriation of its assets and contractual rights.
After SRIMEX petitioned the Commercial Court to compel arbitration under Section 10 of the PSA, the court granted arbitration but refused to maintain a permanent injunction to prevent LPRC from restricting access to SRIMEX's tank farm, seizing its petroleum products, and blocking vessel berthing.
The Commercial Court reasoned that issuing a permanent injunction would exceed its jurisdiction once arbitration was ordered.
Supreme Court: Jurisdiction Over Arbitration Does Not Oust Power to Protect It
Justice Wolokolie disagreed.
In her ruling, she clarified that jurisdiction over the merits of a dispute subject to arbitration is distinct from a court's authority to issue procedural safeguards to preserve the effectiveness of arbitration.
"The power to compel arbitration," the Chambers Justice reasoned, "does not extinguish the court's authority to ensure that the arbitration process is meaningful and not rendered nugatory."
Citing Article VI(b) of the Commercial Court Act of 2010 and relevant provisions of Liberia's Civil Procedure Law, she emphasized that courts retain discretion to grant injunctive relief where continued actions by a party threaten irreparable harm or could render eventual arbitration awards ineffectual.
Contract Rights vs. Executive Policy
At the heart of the dispute is Article 25 of Liberia's 1986 Constitution, which guarantees the obligation of contracts and prohibits laws impairing contractual rights.
While acknowledging that democratically elected governments must retain flexibility to implement policy changes, the Court stressed that such actions must be balanced against constitutional protections for existing contracts.
The PSA between SRIMEX and LPRC runs through 2032 and contains a binding arbitration clause requiring disputes to be resolved through confidential arbitration in Liberia.
Justice Wolokolie noted that if LPRC's actions--blocking SRIMEX's access to its leased tank farm at the Freeport of Monrovia, seizing stored petroleum, and denying vessel discharge--continued unchecked, the arbitration process itself could be rendered meaningless.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
A Significant Legal Signal
The ruling sends a strong signal that courts will not allow arbitration clauses to become hollow formalities while one party exercises dominant control over disputed assets.
Legal observers say the decision reinforces judicial oversight in commercial disputes involving state-owned enterprises and underscores the Supreme Court's role as guardian of contractual sanctity.
Both SRIMEX and LPRC have excepted to portions of the Commercial Court's ruling, with LPRC announcing an appeal to the Full Bench of the Supreme Court for its March Term A.D. 2026.
For now, the Chambers Justice's intervention underscores a central principle: arbitration may decide the dispute, but the courts will ensure that neither party undermines the process before it begins.
