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First Oil Ordered To Pay US$2.7 Million For Fuel Bought In 2013

1 year agoFri, 27 Jan 2023 09:48:27 GMT
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First Oil Ordered To Pay US$2.7 Million For Fuel Bought In 2013

The High Court of Zimbabwe has ordered First Oil to pay US$2.7 million owed to CMED Pvt Ltd for fuel purchased in 2013 but was never delivered.

The protracted legal battle started in 2014, according to NewZimbabwe.

The court was told the US$2.7 million is compensation for 3 million litres of diesel which CMED paid for in 2013 but never received.

First Oil was ordered to pay the money by Justice Owen Tagu of the High Court in January 2022. However, the company approached the Supreme Court to have the lower court’s decision overturned.

CMED then approached the High Court seeking authority to execute Justice Tagu’s judgement.

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In a separate High Court suit, CMED alleged that First Oil’s intention to appeal to the Supreme Court was an attempt to delay the suit and evade payment.

In addition to granting CMED’s request, Justice Siyabona Musithu stated that First Oil must continue to pay even if the firm attempts to appeal his ruling.

Musithu observed that it was not disputed that First Oil had failed to fulfil its end of the deal. He ruled:

The court determines that on the evidence available, it is CMED that stands to suffer irreparable harm if execution pending appeal is not granted.

The applicant parted with a huge amount of money, but received nothing in return. It is common cause that the applicant is in the business of procuring and dispensing fuel.

Because of the instability in the pricing of fuel globally, it is also common cause that the amount advanced to the respondent may never procure the same quantities of diesel as would have been procured when the parties signed the agreement.

At any rate, the applicant is not even going to be refunded the sum of US$2 700 000 in the same currency it was paid to the respondent.

On its part, the respondent has failed to justify its retention of the said amount in the absence of any claim against the applicant. The balance of convenience is clearly in favour of granting the relief sought herein.

Resultantly, it is ordered that the applicant be and is hereby granted leave to execute judgment No. HH 26/21 granted by this court under case HC 1897/16 on 13th January 2021.

The two entities have been at loggerheads since 2013 after First Oil failed to deliver 3 million litres of diesel to CMED.

CMED paid a total of US$2.7 million and was to pay a further US$720 000 direct to ZIMRA for duties and levies.

However, CMED did not pay the sum of US$720 000 that would have been paid to ZIMRA in terms of duty and levies.

First Oil then failed to deliver and went on to challenge the lawsuit arguing that CMED did not pay US$720 000 as agreed.

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