SALOF Nigeria Threatens Court Action Against GE Oil & Gas

Mike Ozekomhe

For alleged contractual breach, SALOF Industries Nigeria Limited has resolved to explore legal options to resolve issues relating to acquisition of SALOF Refrigeration Companies USA (designer and manufacturer of small-scale liquefied natural gas technologies).

Consequently, SALOF Nigeria has formally served notice to General Electric (GE) Oil and Gas Incorporated through its counsel, Mike Ozekhome in a letter dated July 3, 2013.

GE Oil and Gas has therefore, been given a 14-day ultimatum within which to initiate processes of mitigating the loss that SALOF Industries Nigeria Limited suffered due to the acquisition.

In the notice of intention to proceed against GE Oil and Gas in court, SALOF Industries Nigeria Limited, a subsidiary of SALOF Companies USA, said that “prior to the acquisition of SALOF by GE Oil and Gas, SALOF Nigeria had embarked on the design of a turnkey project with the support of SALOF USA in partnership with UDDIPCO for Chevron Nigeria.  SALOF Nigeria and SALOF USA had invested remarkable efforts to ensure the success of this project.

“It was to our dismay to realize that SALOF USA disengaged from further participation in the said project without prior notice to SALOF Nigeria for proper communiqué to Chevron Nigeria.  We went on to express his disappointment in a mail to Mr George Salof on the 12th of June 2013.

“It is worthy of note that tremendous resources, including but not limited to financial and human resources have been invested into marketing the SALOF identity in the Nigeria market by SALOF Nigeria. 

“Such efforts resulted in the authorization by the then Minister of Petroleum to the NNPC for the introduction of SALOF Nigeria to Addax Petroleum Nigeria limited, Shell Petroleum Development Company Limited, Nigerian Agip Oil Company Limited, Mobil Producing Nigeria Limited, Chevron Nigeria Limited and Pan Ocean Oil Corporation.”

The decision by SALOF Nigeria to go legal, was sequel to communication received from the Managing Director of SALOF Refrigeration Companies USA, George Salof on May 6, 2013, to the effect that GE Oil and Gas had entered into an agreement to acquire SALOF Refrigeration Company Incorporated.

He was quoted to have said the acquisition would give GE Oil and Gas access to SALOF small scale LNG and Co2 Processing technologies and fabrication expertise, and maintained that SALOF would continue to operate as a separate business.

On May 15, 2008, SALOF Refrigeration Companies USA had entered into an agreement of commission payment of 20 percent to SALOF Industries Nigeria Limited on all orders originating from Nigeria, Ghana and Uganda.

Also, On October 5, 2010, the USA-based companies had sent an addendum, to the signed commission agreement stating that it would pay 5 percent to the Nigerian company on orders originating from other companies while the 20 percent commission payment would apply on orders originating from SALOF Nigeria.

The management of SALOF Industries Nigeria Limited, which signed an agreement as a sole agent of the Schertz, Texas based companies on July 29, 2007, kicked when it received a letter dated June 11, 2013 from GE Oil and Gas informing it of the termination of its commission agreement and affiliation with SALOF Refrigeration Companies USA.

The letter was signed by Global Sales and Commercial Leader/SALOF Integration, Erik Barton and addressed to EJ Agbonayinma, Oghenekaro Jockey and others (all directors of SALOF Industries Nigeria Limited).

Since the 14-day ultimatum has lapsed, the Chambers of Ozekhome, is now prepared to file a suit in court against the multinational company for not treating SALOF Nigeria as part of the assets and liabilities of SALOF USA.

 

 

 

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