Leading fuel business Certa claims more than 12 million litres of biofuel it had already paid for is “missing or does not exist” after the majority shareholder of the Irish provider of the fuel went into administration in the UK.
Certa claims, in proceedings admitted to the Commercial Court on Monday, that the provider, Green D Project Ireland Ltd, gave misleading information the month before its UK majority shareholder, Green Biofuels Ltd, went into administration by saying it had some 17 million litres of fuel in Ringaskiddy, Cork.
Certa, which operates a number of filling stations as well as providing home heating oil and fuel to the business sector, entered into an agreement to buy some 18 million litres of hydrotreated vegetable oil (HVO) biofuel which is made from waste vegetable oils and animal fats. It is marketed as a low-emission substitute for diesel.
In 2022, in the light of general concerns about risks to the security of the electricity supply in Ireland, Certa sought to ensure it would have a large supply of biofuel in case it became necessary to power back-up generators.
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It entered into an agreement with Green D to provide 18 million litres of HVO biofuel for the sum of €26.7 million.
In an affidavit, Andrew Graham, former managing director of Certa and current managing director of mobility with DCC Energy, said his firm paid the full purchase price to Green D in December 2022. Green D also agreed to store and ringfence Certa’s 18 million litre supply in the Cork facility, he said.
The money was paid to what Certa believed was a Green D account but which actually turned out to be a Green Biofuels account, he said.
Concerns began to arise in January 2023 when tank “dip” reports from Cork recorded storage of about 4.7 million litres. Concerns continued into the year when Certa was assured by both Green Biofuels and Green D representatives that some 17 million litres would be in the storage tank.
Tosko Botev, Green Biofuels UK’s commercial director, said a vessel was due to arrive during August when Certa’s supply would be ring-fenced, he said.
In September, Mr Botev provided Certa with a tank-dip measurement stating there was 17.3 million litres in the storage facility, he said.
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When Green Biofuels entered administration in the UK the next month, Mr Graham sought but was refused permission to carry out tank dips. Mr Graham however received a WhatsApp message from another Green D representative stating the dip was just over 8 million litres.
Mr Graham said this was very concerning as it meant that, between when the 17 million litre reading was given by Mr Botev and the WhatsApp message reading, some 250 trucks would have had to have transported 9.3 million litres out of the facility over nine days to make the level drop to 8 million litres.
He did not believe that it was “a realistic possibility”. His request for an explanation about the difference in figures was not answered, he said. When Certa representatives did get into carry out measurements, on October 11th, it was established there was 7.7 million litres.
Certa has got just 5.8 million litres of the total 18 million litres it paid for, he said. The whereabouts of 12.2 million is “unknown”, he said.
After Green Biofuels went into administration in the UK, the joint administrators then presented a petition to the Irish High Court to wind up Green D. This was resisted by Green D and, in December, the court refused to confirm the provisional liquidators.
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Green D then brought proceedings against Certa in relation to the use of the biofuel it supplies (known as GD+) and sought some €24.5 million.
Certa seeks a number of declarations including specific performance of the agreement to provide the full 18 million litres and that the €24.5 million payment demand from Green D is invalid.
Mr Graham said that as part of an agreement between the parties involving the payment of money to Certa over Easter, it was also agreed the Certa case should be admitted to the Commercial Court.
On Monday, on the application of Michael Cush SC, for Certa, and consent from Paul McGarry SC, for the defendant, Mr Justice Denis McDonald admitted the case to the fast-track Commercial Court and approved agreed directions for the progress of the proceedings.
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