Dram Oil sues Deloitte and Touche for alleged negligent auditing

Dram Oil, an oil trading company in Ghana has sued Deloitte and Touche, a firm of Partners providing services relating to accounting, bookkeeping, and auditing for recovery of the sum of $187 million for negligently preparing an Audit report arising out of a 2013 commercial dispute.

According to its Statement of the Case, Dram Oil indicates that the said Commercial dispute brought against it and others by CAL Bank arose out of a tripartite agreement.

It states further that following a lengthy court process and a trial, on the 18th day of May 2015, Her Lordship Justice Novisi Aryene, then a Justice of the High Court, delivered judgment in its favor.

Following the above, consequential orders were made by the court for the appointment of a reputable audit firm to "audit the books, records, and inventory of the 7th Defendant, Vihama Energy relating to the subject-matter suit, particularly with respect to payments, receivables, emergency cargo under-recoveries received by it under the Tripartite Agreement.”

Therefore following the failure of the original audit firm appointed to conduct the audit, Deloitte was appointed to undertake that very assignment and that being the party for whom judgment had been entered and the beneficiary of the 18th May 2015 judgment, it entered into a binding contract with Deloitte who reiterated its tasks being the agreed terms and objectives of the audit.

Plaintiff further avers that it had every reason per Deloitte’s representation to rely upon it so made that Deloitte will conduct the assignment in accordance with the International Standard.

Dram Oil adds that on 26th March 2019, Deloitte informed the Court that it had completed its assignment and tendered a Final Report on the assignment.

However, it avers that Deloitte per the Final Report, Deloitte rather proceeded on a misadventure comprising distorted facts of a material particular; misconstrued sequence of events and dates, and their actual effect on the financial/numerical data as regards the position of the parties to each other; and ignored, did not read or disregarded conclusive factual findings duly established by the Court. 

Plaintiff further avers that upon analyzing the Final Report, it became conspicuously clear that Deloitte had adopted irrelevant, misleading, and egregiously defective fictions that it called "assumptions", all of which were wrongful and constitutes professional negligence. 

It has thus instituted this action demanding inter alia, the following reliefs;

a. A Declaration that the Defendant breached the duty of care it owed to the Plaintiff as per its Final Audit Report tendered to the Court and adopted on 29th May 2019; 

b. A Declaration that the manner in which the Defendant conducted its work and arrived at the conclusions it did in its Final Audit Report tendered to the Court and adopted on 29th May 2019 was negligent; 

c. An Order for Damages for negligence; 

d. A Declaration that the loss of earnings suffered by the Plaintiff pursuant to its Tripartite transaction with CAL Bank Ghana Limited and Vihama Energy Limited was occasioned as a result of the Defendant's negligence; 

e. Recovery of the sum of the Ghana cedi equivalent of US$3,301,865.00 (or GH¢24,830,025.00, calculated with the May 2022 exchange rate of US$1 = GH¢7.52) being the principal loss of earnings suffered by the plaintiff from the Tripartite transaction with CAL Bank Ghana Limited and Vihama Energy Limited; 

f. Interest on the above sum in Relief (e) calculated at the prevailing lending rate of thirty percent (30%) per annum from December 2012 to the date of final payment, which at the current date of issuing this Writ of Summons in May 2022 is an amount of the Ghana cedi equivalent of US$9,410,316.00 or GH¢70,765,577.00 calculated with the May 2022 exchange rate of US$1 = GH¢7.52); 

g. A Declaration that the plaintiff suffered the loss of profits as a result of the Defendant's negligence; 

h. Recovery of the sum of the Ghana cedi equivalent of US$187,596,000.00 (or GH¢1,410,721,920.00, calculated with the May 2022 exchange rate of US$1 = GH¢7.52) being the amount of loss of profits suffered by the plaintiff by reason of the Defendant's negligence as at May 2022, to be recalculated at the date of final payment; 

i. Costs inclusive of professional and administrative fees of Counsel assessed at twenty percent (20%) of the total value of the Reliefs awarded to the plaintiff; 

j. Any other Orders as the Honourable Court may deem fit.