IDBZ sues Meikles for over $3 million

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The Infrastructure Development Bank of Zimbabwe (IDBZ) has taken Meikles Limited to court seeking to recover over $3 million for breach of contract over a credit facility from the bank.

BY CHARLES LAITON

According to the summons issued in October this year under case number HC9880/15, the bank claimed sometime in November 2013, Meikles applied for a composite facility for working capital purposes in the sum of $5 million and was granted.

However, IDBZ claims Meikles, despite having made an undertaking to pay back the loan in time, had allegedly failed to do so and was in arrears of $2 679 128,72 being capital and

$590 747,88 being interest and interest on the capital amount at the rate of 23%, with effect from October 13 this year.
The bank also said it was claiming “costs of suit on a legal practitioner and client scale and collection commission as provided for under the Law Society of Zimbabwe by-laws”.

But in its plea, Meikles expressed unhappiness with the route taken by the bank of seeking the court’s intervention, saying the matter ought to have been referred to an arbitrator instead.

IDBZ BANK 2

“The defendant [Meikles] will plead that the parties entered into an agreement on June 15, 2015 and in terms of clause 19.1 of the agreement, it was agreed between the plaintiff [IDBZ] and the defendant that any dispute between them arising out of or in connection with the agreement including any question regarding its existence, interpretation, validity, determination or the enforcement of its provision for settlement be done through arbitration,” it said.

Meikles further said it was true that the agreement expired on November 30 last year, but the parties started negotiations on extending the facility and the agreement was finalised on June 15.

“The defendant [Meikles] avers that a total sum of $5 000 000 was lent and advanced to it under the earlier agreement, but will aver that the parties entered into a subsequent agreement extending the maturity date to May 31, 2016.

“The defendant made payments of $2,5 million leaving a balance of $2,5 million at the time the parties agreed to roll over the facility to May 31 2016.”

According to Meikles, the only outstanding amount was in the sum of $2 545 569,44 together with interest at the rate of 17% per annum.

“Defendant denies that the amount is now due and payable as it is only due and payable by May 31 2016.”

The matter is still pending at the High Court.

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