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Tanganda wins US$47,000 tea dispute
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Tanganda Tea Company has won a long-running legal battle at the High Court of Zimbabwe against trader Darlington Matsitukwa, over an unpaid foreign currency debt for tea products sold for resale in Malawi.
The court found that Matsitukwa, who entered into an agreement with Tanganda prior to January 1, 2018, failed to pay for tea products worth US$47 493.17, prompting the company to pursue legal action under case number HC9854/18.
Although Tanganda initially recovered ZWL$5 876.38 through court processes and Matsitukwa later deposited ZWL$16 000 and ZWL$25 717.70 into the trust account of Tanganda's legal representatives, the company rejected these payments. It insisted the debt was a foreign obligation since the goods were exported to Malawi and the original agreement was denominated in United States dollars.
Matsitukwa opposed this stance, claiming Tanganda had waived its right to demand payment in foreign currency. He further argued that enforcing US dollar payment would be unjust and inequitable, citing a previous writ of execution and the deduction of the initial ZWL$5 876.38 from the principal amount.
However, Justice Faith Mushure dismissed Matsitukwa's arguments, ruling that the payments made in local currency did not constitute a waiver of Tanganda's right to demand settlement in foreign currency.
"The defendant's attempt to establish a tacit waiver in this regard is irreconcilable with the admission highlighted in the statement of agreed facts," ruled Justice Mushure.
"The plaintiff cannot be taken to have either expressly or tacitly waived its right in respect of the outstanding US$41 616.79."
In her ruling, Justice Mushure declared the debt a foreign obligation in terms of Section 44C(2)(b) as read with Section 44C(10)(d) of the Reserve Bank of Zimbabwe Act [Chapter 22:15].
She ordered that the ZWL$5 876.38 already recovered be deducted from the original sum, leaving US$41 616.79 payable by Matsitukwa. The court also directed that this amount be paid with interest at the prescribed rate from September 30, 2018 until the date of full payment.
The ruling affirms the enforceability of foreign currency obligations in cross-border transactions and underscores the importance of contractual clarity in Zimbabwe's volatile currency environment.
The court found that Matsitukwa, who entered into an agreement with Tanganda prior to January 1, 2018, failed to pay for tea products worth US$47 493.17, prompting the company to pursue legal action under case number HC9854/18.
Although Tanganda initially recovered ZWL$5 876.38 through court processes and Matsitukwa later deposited ZWL$16 000 and ZWL$25 717.70 into the trust account of Tanganda's legal representatives, the company rejected these payments. It insisted the debt was a foreign obligation since the goods were exported to Malawi and the original agreement was denominated in United States dollars.
Matsitukwa opposed this stance, claiming Tanganda had waived its right to demand payment in foreign currency. He further argued that enforcing US dollar payment would be unjust and inequitable, citing a previous writ of execution and the deduction of the initial ZWL$5 876.38 from the principal amount.
However, Justice Faith Mushure dismissed Matsitukwa's arguments, ruling that the payments made in local currency did not constitute a waiver of Tanganda's right to demand settlement in foreign currency.
"The plaintiff cannot be taken to have either expressly or tacitly waived its right in respect of the outstanding US$41 616.79."
In her ruling, Justice Mushure declared the debt a foreign obligation in terms of Section 44C(2)(b) as read with Section 44C(10)(d) of the Reserve Bank of Zimbabwe Act [Chapter 22:15].
She ordered that the ZWL$5 876.38 already recovered be deducted from the original sum, leaving US$41 616.79 payable by Matsitukwa. The court also directed that this amount be paid with interest at the prescribed rate from September 30, 2018 until the date of full payment.
The ruling affirms the enforceability of foreign currency obligations in cross-border transactions and underscores the importance of contractual clarity in Zimbabwe's volatile currency environment.
Source - newsday
