CMED sues First Oil for $3,9 million

CMED has taken First Oil to the High Court seeking to recover $3 976 611 after the fuel firm failed to deliver three million litres of fuel in a deal sealed between the parties three years ago.


According to the summons filed on Thursday this week, CMED said it was demanding from First Oil payment of $2,7m being, a refund of the amount which was paid to the fuel firm as consideration for the supply of three million litres of diesel on March 5, 2013.

The parastatal also said it was demanding from First Oil “payment of the sum of $665 000 being damages for the cost of finance by which the plaintiff (CMED) paid consideration to the defendant (First Oil), interest and penalty resulting from the plaintiff’s breach of the loan agreement consequent upon the defendant’s failure to deliver the diesel fuel to the plaintiff”.


CMED further said it was also demanding “payment of the sum of $611 611, 84 being damages for loss of the profit that the plaintiff would have realised from the sale of the diesel had the defendant duly and timeously delivered same in terms of the contract”.

In its declaration attached to the summons, CMED said in breach of the contract that was entered between the parties after which the cash was transferred to First Oil’s ZB Bank account, the fuel firm did not deliver the fuel and had not done so to date.

“Despite acknowledging its said indebtedness to the plaintiff and despite several demands to that effect, the defendant has refused, neglected or failed to refund the above amounts to the plaintiff,” CMED said.

“At all material times hereto the defendant was aware that: (a) The source of the said payments was a loan which the plaintiff obtained from the bank for purposes of the contract and; (b) The plaintiff intended to resell the diesel fuel….”.

The current lawsuit comes barely a year after CMED filed another claim against First Oil and its directors, Maxwell William Katunga, Lynon Gilbert Katunga, Alex Kudakwashe Mahuni, Gavin Allen Katunga alongside CMED officials Davison Mhaka and Brian Manjengwa.

The matter, which is still pending in court, witnessed the sucking-in of the ZB Bank and its two officials, Phanuel Kapanje and Kiliana Bangure, who were accused by First Oil of misappropriating the government’s cash. In this week’s matter First Oil is yet to enter an appearance to defend notice.

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