By Lehlohonolo Lehana.
The Gauteng High Court has awarded Sasol and TotalEnergies R6 billion in damages, not including interest, over a battle with Transnet over tariffs for the transport of crude oil.
The matter dates back as far as 2013, with the parties maintaining they were overcharged.
Transnet expressed disappointment at the judgment, which it said it intended appealing.
In 2017, Sasol Oil followed TotalEnergies in instituting legal action against Transnet, whose pipelines unit transports crude oil from Durban to the Natref crude oil refinery located in Sasolburg, in which Sasol Oil and TotalEnergies held 63.64% and 36.36% respectively.
The oil majors claimed damages arising from Transnet’s alleged breach, over a number of years, of an obligation to set pipeline tariffs for conveyance of crude oil in terms of an agreement that had been entered into between the parties in 1991.
The agreement had since been cancelled, but involved calculating the tariff from Durban to the Natref refinery using a “neutrality principle” in terms of which Natref would neither be advantaged nor disadvantaged by its inland location.
“The litigation between the parties has been ongoing for years and a number of issues in the matter have been determined by the High Court, Supreme Court of Appeal and Constitutional Court respectively,” Sasol told shareholders in a statement.
The JSE-listed group added that the remaining issues in the litigation proceeded to trial in the High Court of South Africa from April 15 to 3 May 3 and that, on June 18, judgment was handed down by the High Court in Sasol Oil and TotalEnergies’ favour.
“Damages in the amount of R3.8-billion plus interest amounting to approximately R2.3-billion were awarded to Sasol Oil,” Sasol said in the statement.
TotalEnergies, meanwhile, was awarded damages of R2.1-billion, as well as interest on various amounts adjudicated by the court.
Transnet said the judgment had enormous implications not only for the public purse but also for Transnet’s ability to discharge its obligations under the applicable legislation and its licence conditions.
“Transnet intends to appeal the judgment and is in the process of instructing its legal team accordingly.
According to Transnet, the case was about the application of an agreement (which took the form of an exchange of letters between the parties) concluded in 1967 between Total, Sasol and the South African government at the time, which was varied by the parties (also by way of an exchange of letters) in 1991.
“This agreement, which has since been cancelled, had as its central feature that, in calculating the tariff from Durban to the Natref refinery, the so-called ‘neutrality principle’ would apply in terms of which Natref would neither be advantaged nor disadvantaged by its inland location.”