PETROTRADE has been ordered to pay US$255 656,09 to a local company that won a tender to construct a service station on its behalf.
PetroTrade is accused of reneging to pay for the construction services of a service station in Mabvuku.
Safeage (Pvt) Ltd recently dragged PetroTrade to the High Court seeking payment after completing the project.
PetroTrade had appointed KAN Consult (Pvt) Ltd as the project engineers and resultantly became project administrators.
According to court documents, the initial contract was originally for US$912 460,72 and it was reviewed due to various factors to US$812 622,24.
PetroTrade reportedly payed KAN Consult for a total of 23 certificates of payment, but on interim certificate of payment number 13, Safeage paid the performance bond through deductions in the sum of US$33 668,91, but this was not paid to the latter.
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The court also heard that certificates for payment issued after February 22, 2019 were prepared in US dollars, but issued in ZWL/RTGS so as to comply with Statutory Instrument 33 of 2019.
On March 2019, the Procurement Regulatory Authority of Zimbabwe (Praz) issued a circular number 4 of 2019 that construction works were not to be subjected to a wholesome application of the exchange rate.
On December 12, 2019, the service station was handed over to PetroTrade, while KAN Consult engineers prepared the final account.
PetroTrade reportedly engaged Soko Consult Africa to review the account independently, where it assessed and approved a final account of ZWL$18 960 337,17.
The procurement management unit of PetroTrade recommended that Safeage be paid the amount as assessed by Soko Consult Africa.
The accounting officer at PetroTrade also approved payment on September 13, 2021 and to preserve value, Safeage and PetroTrade agreed to lock the value of the final figure of US$221 957,18.
Both agreed that the figure be paid in Zimdollars using the exchange rate as at the date of payment and PetroTrade on November 21, 2021 instructed KAN Consult to prepare a final certificate in the stated amount in favour of Safeage.
After deducting previous payments and the retention amount, the final figure due as at December 16, 2021 was RTGS21 039 004,34.
Safeage’s claim was for US$221 656,18 and performance bond of US$33 668,91.
PetroTrade’s contention was that during the running of the project, SI33/2019 came into force, making the Zimdollar the sole functional currency.
The parties filed heads of argument and the matter proceeded with a hearing before High Court judge Justice Sylvia Chirawu Mugomba.
“It is fallacious for the defendant to feign ignorance on the amount and the manner of payment. The amount is clearly stated and the crucial date remains that of the rate prevailing as at the date of payment and that it would be in Zimbabwean currency.
“The parties are bound by that agreement Book vs Davidson, (supra). The defendant cannot be heard to claim that the amount was converted into ZWL and that is the amount due to the plaintiff.
“The sum of US$221 957,18 as converted into Zimbabwean dollars remains unpaid. As long as the money remains unpaid, it must still be paid at the rate prevailing as at the date of payment. The parties are bound by what they agreed,” the judge said.
Justice Chirawu-Mugomba said PetroTrade was liable to paying the amount as it was based on completion and handover of the service station which was done by the plaintiff.
“In my view, there is no basis for converting this figure into Zimbabwe dollars when it has not been paid. It must be paid at the rate prevailing as at the date of payment,” she said.