A South Africa-based fuel company, Addax Energy SA, has failed to force a local mining firm to pay in hard currency US$269 735 owed for diesel after the High Court dismissed it’s application, ruling that as a local obligation, the debt could be settled in local currency at the prevailing exchange rate at the date of settlement.
Though the company is based in South Africa, Addax is registered in Geneva, Switzerland and is in the business of procuring fuel from the United Arab Emirates, India and Russia to supply the Zimbabwean market while C&T Mining Private Limited is a local customer of fuel from Addax.
The latter delivered diesel worth US$1 379 601 to C&T Mining who in terms of an oral agreement was obliged to pay within 14 days of delivery. However, no payment was made despite several follow ups after the two-week period had lapsed.
This prompted Addax to cancel the contract in June 2022, and demand the return of the fuel supplied.
The dispute then spilled into the High Court with Addax seeking to recover US$269 735,88 owed for what had been already supplied and for an order declaring the debt a foreign obligation payable exclusively in US dollars.
But Justice Chilimbe, in his ruling, was not convinced that Addax had made out a case that the debt was a foreign obligation. So it dismissed the application with costs.
“Defendant (C&T Mining) be and is hereby ordered to pay plaintiff an amount of US$269 735,88, which amount is payable in Zimbabwe dollars at the ruling exchange rate on the date of settlement.”
In its original declaration, Addax claimed US$1 379 601 from C&T.
However, at the start of trial, Addax abandoned its original claim for an order for confiscation of 412 000 litres of petroleum plus payment for the 412 000 litres in US dollars at the ruling price of the Zimbabwe Energy Regulatory Authority.
It then reduced its claim to US$269 735,88 as the balance due on the quantity of fuel delivered to the mining company and sought an order that the debt constituted as a foreign obligation payable in US dollars.
Though the mining company admitted the amount claimed, it, however, denied that the debt qualified as a foreign obligation payable exclusively in US dollars. It offered to settle the debt in local currency at the applicable rate, but Addax rejected the offer and approached the court for recourse. Herald.
