Paynet Zimbabwe loses US$100m suit
By Fidelis Munyoro
Paynet Zimbabwe, the bulk payments service provider, has lost its High Court claim for US$100 million damages against the Bankers Association of Zimbabwe (BAZ) made after Zimbabwe-based banks stopped using it because it was demanding payment in US dollars.
Paynet Zimbabwe and Payserv Africa Limited, both subsidiaries of the London Stock Exchange (LSE)-listed firm Cambria Africa, had instituted legal action against BAZ and its members.
But Justice Edith Mushore upheld an exception by BAZ lawyer Advocate Thabani Mpofu and dismissed Paynet’s claim with costs in an ex tempore (prompt) ruling last Friday.
Adv Mpofu argued that the claim did not disclose the basis for action against his client and that Paynet relied on a non-existing cause of action namely, “Anti- Competitive Practice,” which had not been proved by any averments in its declaration.
Justice Mushore agreed with the BAZ lawyer’s submission that the action taken against his client was not provided for in the provisions of the Competition Act.
The suit arose after Cambria announced in June this year that Paynet’s service to all its bank customers in Zimbabwe had been suspended due to a collective refusal to pay contracted fees to Payserv Africa in US dollars.
Through its lawyer, Mr Gerald Mlotshwa, the company claimed it had lost US$170 000 providing services to banks in March and April 2019.
Banks allegedly collectively owed Payserv Africa over US$470 000 for over four million transactions concluded since May 1, 2019.
In suspending its payment service to its bank customers, Paynet accused the banks of greed by refusing to pay fees in foreign currency for using its payments platform.
It was also Paynet’s argument that BAZ wanted to eliminate its system and replace it with a different system from another provider.
In its papers, Paynet argued that its contracts with BAZ members were denominated in United States dollars and that after payment, Paynet would remit the licence fees in United States dollars to the licence holder.
The court heard that the banks were supposed to send money into the service provider’s account in Mauritius around May 15 2019, after the Reserve Bank of Zimbabwe had allegedly authorised the payment.
Paynet accused BAZ of influencing its members not to pay the money, resulting in the suspension of services by Paynet. The Herald