HARARE businessman Wicknell Chivayo has won a $25 million lawsuit against the Zimbabwe Power Company (ZPC) for bringing up malicious criminal charges of fraud against him and allegedly frustrating his firm, Intratrek Company, from performing its obligations at the Gwanda Solar Power Project.
BY DESMOND CHINGARANDE
Chivayo had been hauled before a magistrate to answer charges of fraud on the way he handled the 100 megawatt (MW) Gwanda Solar Project contracted by ZPC.
The State case was that Chivayo received $5 million advance payment for the project from ZPC without a bank guarantee, but ZPC stated on court record that they were not a complainant in the matter.
Chivayo and Intratrek then turned the heat on ZPC and told the court that the power utility was in fact, in breach of contract by wantonly causing delays and impediments to the implementation of the solar project.
But in an opposing affidavit to Intratrek’s High Court application, ZPC denied causing Chivayo’s arrest, technically meaning there was no complainant in the Gwanda Solar Project case.
In his judgment, Justice Tawanda Chitapi said ZPC had acted unlawfully and in bad faith, possibly under external influence from parties who were not part of the contract.
“The [Engineering Procurement and Construction] EPC contract entered into between the parties clearly provides for a dispute resolution mechanism, which applies in the event that parties are in disagreement with any issues of fact. The dispute between the parties is essentially that of a breach of contractual terms and, therefore, did not warrant any criminal sanction.
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“The contract and, indeed, our common law on the subject provides for competent remedies which apply in instances where a party to a contract is in breach of the terms thereof. The attempt to hold the EPC contract either lapsed or terminated is incompetent at law and inconsistent with the provisions of the contract. In any event, the respondent cannot terminate a contract which has not yet commenced,” Justice Chitapi ruled.
“Such conduct may send the wrong signal to investors and the business community that if they conclude contracts with the State-controlled entities, they risk enforcement of obligations being pursued criminally as opposed to the use of civil remedies and mechanisms for dispute resolutions provided for in the contracts. The involvement of a State organ, the police, in a contractual dispute in the circumstances where the contract was clear on dispute resolution mechanism of arbitration was unfortunate and precipitate.”
Justice Chitapi granted the relief sought, declaring that the EPC 100MW Gwanda Solar Power Station, EPC contract number ZPC304/2015 & addendum number 1 for US$172 848 597,60 between ZPC and Intratrek/ Chint Electric Co signed on October 23, 2015 is still valid, extant and enforceable at law.
The order further sought that if ZPC does not engage Intratrek by February 13, 2019, they would be deemed to have repudiated the contract and liable to pay full damages in the sum of $25 million to Intratrek, broken down as $15 million for loss of profit from the contractual undertaking valued at the full EPC value, $5 million arising from the costs engaged in syndicating the technical partnership with ChiNT Electric and sourcing of project financing from China EximBank and other credit financing institutions and $5 million arising from the reputational damage caused by the applicant, by wantonly frustrating the contract and reporting false and malicious allegations against the applicant.
Chivayo said he lost his reputation and his corporate good standing was materially tarnished, and leading to certain business undertakings worldwide being either suspended or terminated.
