Chivayo, ZPC US$180 million contract valid and binding: High Court rules

High Court judge Justice Siyabona Paul Msithu has ruled that the US$172,848,597.60 contract between controversial businessman Wicknell Chivayo’s Intratrek Zimbabwe and the Zimbabwe Power Company (ZPC) signed in 2015 for the construction of a 100MW solar power plant in Gwanda is “valid and binding” bringing an end to the dragging contractual dispute between the two parties.

The judge confirmed that ZPC was in breach of contract ordering the power utility to pay a US$22 million damages claim.

The agreement was signed subsequent to a successful tender bid, for the engineering, procurement, and construction of a 1000MW Gwanda Solar Power Station Project.

Intratek was awarded as the lowest compliant bidder to specification out of 6 bidders at a cost of US$ 173 million.

As events unfolded, ZPC backtracked on the deal before suing Intratrek and its managing director, Chivayo for fraud.

The businessman was cleared of wrongdoing before he sued ZPC last year claiming US$22 million damages for defamation.

Chivayo complained he was losing out on business worldwide after ZPC instituted criminal proceedings against his company while as Chivayo put it they were aware the parties contract was still valid.

Trial took place last September on a continuous roll.

In his Judgement Justice Msithu said ZPC was wrong for frustrating its contractor who won the project in an open tender.

“Resultantly it is ordered that: The procurement contract for the Engineering, Procurement and Construction (EPC Contract) of the 100MW Gwanda Solar Project (ZPC 304/2015) between the plaintiff and the defendant as amended is valid and binding between them.

“Consequent to the declaration of the validity of the EPC Contract, an order for specific performance of the said contract is hereby granted.

“The defendant’s (ZPC) claim in reconvention is hereby dismissed with costs. The defendant shall pay the plaintiff’s costs of suit in the claim in convention.”

The judge showered praises on Chivayo who was the sole witness during the trial.

He said he was consistent and trustworthy.

“Plaintiff’s demeanour was impressive. His evidence is clear and straight to the point. He was subjected to lengthy cross-examination and remained firm on his assertion of the facts which were solidly backed by mostly common-cause documentary evidence.”

He said it was impressive that where he had no exact recollection he stated so.

“He readily conceded some matters which were put to him. His body language and composure were consistent with one who told the truth.

“This compared to the demeanour and body language of the ZPC witness Mr Cleopas Fambi can only result in a position where the court must believe him on matters in issue and disbelieve the evidence of the ZPC which in any event was no evidence at all.”

Alternatively, Intratrek had argued that it should be granted an award of damages in the sum of US$25 000 000 as it had incurred expenses whilst trying to secure funding for the project.

The judge ruled, “The plaintiff maintained that it was required under the contract to secure funding for the entire project through a debt financing arrangement.

“The plaintiff was expected to engage in a robust and expensive process of engaging international banks and project financial institutions. It incurred expenses in the sum of US$3 000 000 from 2013 to 2018.

“Further, the contract itself was of significant value and if it was to be implemented, the plaintiff expected to realise a return on investment of US$22 000 000. As a result of the breach the plaintiff had therefore suffered a loss of profit.”