Doves Funeral Assurance loses its US$4 million lawsuit against Zimplats

Doves Funeral Assurance has lost a US$$4 195 543 lawsuit against Zimplats after High Court judge, Justice Amy Tsanga ruled that there was a non-existent contract between the two companies.

The dispute between Doves and the platinum mining giant started after Zimplats cancelled the tender it had awarded Doves to provide funeral cover for its more than 2 000 workers in early 2013.

Doves then approached the High Court accusing Zimplats of breaching the contract. The funeral insurance organization demanded US$$4 195 543 in damages.

In its application, Doves, represented by Advocate Sylvester Hashiti, pointed out that an agreement existed between the insurance company and Zimplats for the establishment of the Zimplats Employee Funeral Scheme.

Representing Zimplats, Addington Chinake, submitted that there was no existing contract between Doves and his client that could be used for the court to rule in favour of the insurance company.

Justice Tsanga ruled in favour of Zimplats stating that there was no signed contract between the two companies.

“It would be tantamount to dragging an unwilling partner to the altar or worse still, condoning the operation of business gangster style, through arm-twisting, were a party to insist on specific performance for a contract that was never perfected or claim damages where the tender documents specifically provided to the contrary,” read part of the ruling by Justice Tsanga.

“More significantly, where the very award of the tender had been gotten through non-disclosure of key information, this would hardly be in keeping with the ethos of promoting sound ethical business.

“In fact the inclusion in the tender documents that there would be no claim for damages in the event of withdrawal of a tender, caters for or addresses these types of scenario.

“As for the argument that the plaintiff nonetheless had performed in terms of the unsigned contract, signifying a general acceptance of the terms and conditions in the draft document, this did not dispense with the need for a properly executed contract.

“Indeed, a provision on termination on notice was included in the draft agreement whose thrust the defendant attempted to drawn on in good faith without prejudice to compensate the plaintiff for the minimum roll out begun pending certain necessary information that was to be availed by the defendant regarding its employees.

“This was before the unsavoury details concerning the plaintiff emerged. That offer to compensate had been the decent thing to do given that strictly speaking, in terms of the tender documents, there was no obligation to give anything and the contract had not been signed.

“It was the plaintiff who refused the offer, opting instead to try and squeeze specific performance or alternatively to reap millions from the defendant.

“Plaintiff must bear the consequences of its choices. As the saying goes ‘a feather in hand is better than a bird in the air’. That offer to compensate on the basis of three months’ notice was without prejudice and it was rejected.”