THE City of Harare has lost a High Court appeal in a matter in which it sought to pay a bitumen products supplier in local currency despite having been quoted in foreign currency.
The municipality was arguing that it should settle the US$468 000 using a 1:1 United States to local currency conversion rate.
Bitumen products supplier Furbank Trading was, however, granted an arbitral award after challenging the local authority’s plans to settle the bill in local currency.
The municipality had filed a court application for the setting aside of an arbitral award rendered by Thomas Alexander Taylor in favour of Furbank Trading.
Furbank Trading had submitted a claim for arbitration stating that sometime in July 2018, it was awarded a tender for the supply and delivery of bitumen products for emergency road rehabilitation.
A contract was subsequently executed between the parties for the supply and delivery of bitumen products.
City of Harare ordered bitumen products and Furbank supplied the same for US$468 855.
In May 2019, Furbank presented an invoice to council.
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City of Harare acknowledged its indebtedness to Furbank through a memorandum dated May 31, 2019, but the debt was not settled, resulting in the matter being referred to arbitration.
Council opposed Furbank’s claim arguing that the amount due to it ought to be settled in local currency, citing Statutory Instrument 33 of 2019.
The arbitrator then ruled in favour of Furbank.
The City of Harare approached the High Court seeking the setting aside of the arbitral award on the basis that it was contrary to the public policy of Zimbabwe.
Former High Court judge Justice Webster Chinamhora dismissed council’s appeal.
“In my view, the arbitrator made a finding that the applicant incurred an obligation towards the respondent after the first effective date and, therefore, should pay the respondent the RTGS [real time gross settlement] equivalence of the United States dollar as contemplated by section 22(e) of the Finance Act (No 2) of 2019,” Chinamhora ruled.
“My view is that the arbitrator’s finding and ruling is consistent with the law.
“The award is not contrary to public policy.
“A reading of the arbitrator’s award clearly shows that the established facts and applicable law are in tandem.
“I find nothing contrary to public policy since section 22(e) of the Finance Act (No 2) of 2019 supports the conclusion reached by the arbitrator.”
Chinamhora added: “Therefore, the arbitrator not only upheld the parties’ agreement, but also correctly applied the law to the established facts.
“The application be and is hereby dismissed. The applicant shall pay the respondent’s costs.”
