Chivayo wins $25m ZPC case

 Chivayo wins $25m ZPC case
Published: 16 December 2018
Intratrek Zimbabwe has won a $25 million lawsuit against the Zimbabwe Power Company (ZPC) and in which High Court judge Tawanda Chitapi has also ruled that the contract between the Zesa subsidiary, and Wicknell Chivayo's firm was still valid, and binding.

This comes as the flamboyant businessman has been charged with "criminal conduct" in the manner in which he won the 100 megawatt (MW) Gwanda solar tender, which the applicant's lawyers said were designed to frustrate his client.

"It be and is hereby declared that procurement contract No ZPC 304/2015 dated October 23 2015 between the applicant and respondent is valid, and binding between the parties," Chitapi said, adding the energy firm "acted unlawfully and in bad faith" - and possibly under external influence - especially when the contract provided for a dispute resolution mechanism in a matter which did not warrant any criminal sanction.

"The parties shall meet to review progress in regard to the discharge of their obligations in terms thereof as provided for in clause 5 of the contract within 60 days of this order failing, which the party in default shall be deemed to have repudiated the contract and liable in damages to and at the instance of the innocent party," he said.

According to Intratrek, the claim was broken down as $15 million for loss of profit from the purported termination of the engineering, procurement and construction (EPC) contract $5 million for costs in putting together the CHINT Electric partnership and China Exim Bank financing as well as $5 million for reputational damage.

Chitapi emphasized that Zimbabwean law provided for competent remedies and the ZPC's "attempts to hold the EPC contract as either lapsed or terminated was incompetent, and the company could not terminate an agreement, which had not commenced".

He also said the involvement of state organs in the form of police in a situation where there was a clear dispute resolution mechanism of arbitration was "unfortunate and precipitate", and such conduct "would send wrong signals to investors that if they conclude contracts with state entities they risk criminal charges".

Crucially, Chitapi said section 49 (2) of the constitution guarantees that "no person may be imprisoned merely on the ground of inability to fulfill a contractual obligation and the sanctity of contracts enjoys constitutional protection".

With the judge stressing that the contract between the two parties was still legitimate and there was need for them to review the progress of the project in order to meet the contract's demands, Chivayo's lawyer also said their focus was not for relief, but implementation of the project.

"My client seeks to have the contract and he will implement their contract. One of the grounds upon which relief was sought here was that the criminal proceedings in the magistrate's court were part of an elaborate plan to undermine the contract and to ensure that there was no performance," Uriri said.

"The contract provides that the parties should meet and review the project towards satisfaction of the conditions. With the current government's thrust that there be accelerated development to ensure the attainment of a middle-income status for the country by 2030, it is hoped that key projects like the one involved in this case are not stalled by unnecessary bickering and extra contractual frustrations," Chitapi added.

Chivayo had dragged the ZPC to court for raising malicious charges of fraud against Intratek and allegedly frustrating his company, and hindering it from fulfilling its obligations.

"As patriotic Zimbabweans, we have no intentions of benefiting from any damages. Our focus remains to implement the project... and feed 100 MW of clean energy into the national grid for the benefit of the nation..," the youthful entrepreneur said Wednesday.

"...I would like to also take this opportunity to sincerely apologise... and assure the assure nation that the project will be commissioned soon," Chivayo said.
- dailynews
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