By Desmond Chingarande
THE High Court has ordered First Oil Company to pay CMED (Pvt) Limited US$2,7 million over a 2013 issue where the oil company failed to settle a deal worth three million litres of diesel.
The parties had entered into an agreement for supply and delivery of diesel in terms of which First Oil Company, the defendant, was to supply three million litres of diesel to the plaintiff, CMED, upon payment.
According to court papers, pursuant to that agreement, albeit before its finalisation, CMED paid US$2,7 million towards the purchase of the three million litres of diesel.
In terms of the agreement, the plaintiff was to pay a further US$720 000 directly to the Zimbabwe Revenue Authority (Zimra) in lieu of duty and levies.
First Oil Company received the US$2,7 million through its ZB account held at Avondale, but the CMED did not pay the sum of US$720 000 that would have been paid to Zimra for duty and levies.
First Oil Company then failed to deliver the fuel as promised, prompting CMED to file a case against the company saying First Oil had an obligation to deliver the fuel to CMED or refund the value of the three million litres of
fuel.
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In his judgment, Justice Owen Tagu said it was common cause that the parties had an agreement and that CMED paid US$2,7 million.
He said First Oil could not run away from the obligation because an agreement was signed after the money was paid.
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