Evidence of data privacy rights in Rubis, Gulf purchase dispute

If you buy someone’s computer and recover the deleted data, do you have that information and can you use it to file a claim against the seller?

A bitter dispute has broken out between Gulf Energy and Rubis Energy, and it is expected to answer that question and offer guidance for future data privacy cases.

The French multinational thought it had taken a steep discount when it paid € 129 million (Sh16.4 billion) for key assets owned by Gulf Energy, but an analysis of the assets it bought has left both companies pointing fingers at each other. while yelling at each other. fraud.

Rubis reportedly activated a price reduction clause in the sale agreement that saved him € 10 million (Sh1.2 billion).

Before handing over the physical assets to Rubis, Gulf Energy erased all data on the computers through formatting.

But the aggressive data recovery methods used by Rubis led the French multinational to conclude that Gulf Energy had overstated the value of the assets.

Rubis has used the information it recovered from the computers acquired in the asset sale to claim a refund of Sh4.1 billion, with a disclaimer that the lawsuit may increase depending on what further analysis of the information obtained reveals. .

The French firm also wants Gulf Energy to provide more financial records through 2019 to allow for more detailed analysis.

To get out of the refund claim, Gulf Energy filed a lawsuit against Rubis, citing privacy violations in the use of the recovered data. He wants the Superior Court to stop Rubis from using the information to claim refunds.

Gulf Energy insists that the data recovered was not part of the information that would be exchanged between the two companies during the asset acquisition negotiations.

In new court documents, Rubis has opposed hearing the petition, insisting that the agreements signed by both parties required arbitration in the event of a dispute.

Rubis says arbitration proceedings should determine whether Gulf Energy’s decision to overstate the value of the assets was criminal conduct and commercial fraud.

“The petition does not reveal any infraction or violation of constitutional rights. The disputed issues arise from a business transaction in which the following issues have arisen; Did the petitioner fraudulently withhold vital information about the business and assets involved in the transaction from the defendant (Rubis)? Was the petitioner’s cover-up legal or did it amount to commercial fraud?

“Did the petitioner commit crimes by hiding what is now presumed to be confidential information? There is an arbitration clause to which the petitioner now seeks to restrict its application. That would be a serious violation of the agreements entered into by the parties, ”says Rubis in his objection to the case.

In the purchase agreement, Rubis acquired Gulf Energy’s oil business, which includes service stations, fuel storage facilities and related equipment.

For the transaction, Gulf Energy incorporated a subsidiary and placed all assets to be sold under the new company. Later, Rubis acquired the new subsidiary, Gulf Energy Holdings Ltd (GEHL).

“The petitioner (Gulf Energy) transferred all the ICT assets, including the employee’s formatted PCs and laptops that were to be transferred to GEHL under the mutually agreed IT transition plan. In addition, and to ensure that only information related to the specific business and assets was shared with the defendant (Rubis), the petitioner acquired a new server to which he transferred information related to the specific business and assets, ”says Gulf Energy in the court. documents.

“By notification of warranty claim dated March 3, 2021, the defendant alleged, among other things, that with the assistance of data recovery specialists and through advanced data mining techniques, he had recovered information from the server and computers and previously formatted laptops, information related to the entire petitioner matter, “adds Gulf Energy.

The data retrieved included audited statements, financial records and emails related to the Gulf Energy business.

Rubis first bought KenolKobil for $ 353 (Sh38.3 billion) and then used his new acquisition to buy Gulf Energy.

The two purchases made Rubis the largest oil retail marketer in Kenya, as the French multinational now enjoys a market share of at least 20 percent.