High Court Rejects Addax Energy’s Bid for Foreign Currency Settlement
A Switzerland-registered energy company, Addax Energy SA, has faced a setback in the High Court as its attempt to compel a local company to settle a fuel debt of US$269,735.88 in foreign currency was denied.
The respondent in the case, C and T Mining Private Limited, insisted on settling the outstanding debt in local currency, leading to a legal dispute between the two entities.
Addax Energy, based in Geneva, Switzerland, specializes in procuring petroleum fuels from various international sources such as the United Arab Emirates, India, and Russia for distribution in the Zimbabwean market.
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According to Addax’s claim, they supplied diesel valued at US$1,379,601 to C and T Mining, with an agreement stipulating payment within a 14-day period. However, C and T Mining failed to fulfill the payment obligation, prompting Addax to terminate the contract on June 1, 2022, and request the return of the supplied fuel.
Initially seeking the full outstanding amount, Addax later revised its claim to US$269,735.88 for the fuel deliveries. Despite C and T Mining’s offer to settle the debt in local currency at the prevailing exchange rate, Addax refused the proposal.
During court proceedings, Addax, represented by Iddo Tonderai Mudavanhu, argued that C and T Mining was their client and emphasized that the fuel transactions were conducted in US dollars. Additionally, Mudavanhu highlighted Addax’s operational framework, including a transitory offshore account with a local bank and approvals from the Reserve Bank of Zimbabwe (RBZ) to engage in foreign currency transactions within the country.
Felix Chinhamo, representing the respondent, stated that there was no explicit agreement between the two parties.
High Court Judge Joseph Chilimbe ruled in favor of C and T Mining, noting that Addax failed to provide sufficient justification for its insistence on payment in foreign currency.
“This evidence is pivotal. Addax produced no effective counter to this averment. There was reference by its witness to some regulatory dispensation. But this was neither further explained nor proven,” Chilimbe said.
“The fact that a product was imported into the country will not, on its own, qualify obligations arising therefrom as foreign obligation.
“I am, therefore, not satisfied that plaintiff (Addax) has made out its case that the amount admitted as owing was a foreign debt. In that regard, judgment will be awarded on the admitted portion,” the judge ruled dismissing Addax application.
