The National Oil Reserve Agency (Nora), which is responsible for maintaining national oil reserves, has initiated High Court proceedings against Tedcastles Oil Products (Top) over allegedly wrongly selling on stocks it was paid to hold for the agency.

The agency claims it paid Top some €2 million for storage costs since 2002 but that Top has made more than €1 million profits in wrongly selling on stored stocks. It wants Top to account for all profits made on such alleged sales.

Under the guise of "turning over" the stocks, Tedcastles used the agency's stocks as it they were its own for its own commercial advantage, it is claimed.

Tedcastles had offered to pay the agency some €300,000 which, it claimed, represented the amount of excess storage fees, plus interest, paid by the agency, but the agency has rejected this as inadequate. The agency has also denied claims by Top that it had agreed that the company could transfer stored agency products.

When the proceedings came before Mr Justice Peter Kelly at the Commercial Court yesterday, the commercial division of the High Court, he was told that the parties have agreed to a conciliation process in the coming months which may resolve the dispute.

Paul Sreenan SC, for the agency, said there was no opposition to the case being admitted to the list of the Commercial Court, but the parties had agreed a process of access to information. If that was unsuccessful, it was also agreed that Top was not precluded from taking any steps it might choose in relation to arbitration.

Mr Justice Kelly said he would admit the case in these "rather unusual circumstances". He noted the parties had agreed to a process of conciliation or mediation which would hopefully be concluded before the case was again due before the court.

The agency is obliged under EU regulations of 1995 to maintain the national oil reserves. It is also empowered to enter into holding contracts with other parties under which those parties agree to hold a specified amount of stocks for the agency.

It is claimed the agency entered into a holding contract with Top in 1996 under which that company would hold a total of 30,795 tonnes of gasoline, gas oil and diesel in Top's storage facilities at Dublin docks.

The agency claims Top was required at all times to maintain that level of stocks. While Top was obliged to turn over stocks held in commingled storage to avoid their degradation, it was not permitted in doing so to allow the stocks fall under agreed levels, it is also claimed.