First Oil cornered to pay CMED US$2,7 million 2013 debt

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By Staff Reporter

FIRST Oil company has been cornered by the High Court, to pay US$2,7 million owed to CMED Pvt Ltd after having dodged the obligation for a decade.

The previous order was issued in January last year following a protracted legal battle which started in 2014.

Court was told the US$2,7 million is compensation for 3 million liters of diesel which CMED paid for in 2013 but never received.

Following a ruling by High Court judge, Justice Owen Tagu, First Oil approached the Supreme Court seeking to have the lower court’s ruling nullified.

As legal battle dragged on, CMED, having studied the appeal by First Oil, approached the High Court seeking leave to execute Justice Tagu’s judgement.

CMED then filed another High Court application complaining that First Oil’s decision to appeal was aimed at buying more time and evade payment.

Justice Siyabona Musithu upheld CMED’s request.

The judge also put a final nail on the matter ruling that the order directing First Oil to pay will remain binding even if the company tried to appeal his judgement because it was not disputed that the company had failed to fulfill its end of the deal.

Musithu said his judgement shall not be suspended by noting of an appeal.

He ruled, “The court determines that on the evidence available, it is CMED that stands to suffer irreparable harm if execution pending appeal is not granted.

“The applicant parted with a huge amount of money, but received nothing in return. It is common cause that the applicant is in the business of procuring and dispensing fuel.

“Because of the instability in the pricing of fuel globally, it is also common cause that the amount advanced to the respondent may never procure the same quantities of diesel as would have been procured when the parties signed the agreement.

“At any rate, the applicant is not even going to be refunded the sum of US$2 700 000 in the same currency it was paid to the respondent.

“On its part, the respondent has failed to justify its retention of the said amount in the absence of any claim against the applicant. The balance of convenience is clearly in favour of granting the relief sought herein.

“Resultantly, it is ordered that the applicant be and is hereby granted leave to execute judgment No. HH 26/21 granted by this court under case HC 1897/16 on 13th January 2021.

“The applicant shall furnish security to the satisfaction of the Registrar.

“In the event of an appeal being noted against this order, notwithstanding such noting of appeal, this order be and is hereby declared operative and in effect and shall not be suspended. Costs will be in the cause.”

The two entities have been at loggerheads since 2013 after First Oil failed to deliver 3 million liters of diesel to CMED.

Court heard parties entered into a deal and money was paid before the deal was even signed.

CMED paid a total of US$2,7million litres of diesel and in terms of the agreement,it was to pay a further US$720 000 direct to ZIMRA in lieu of duties and levies.

However, CMED did not pay the sum of US$720 000 that would have been paid to ZIMRA in terms of duty and levies.

First Oil then failed to deliver.

The company still went on to challenge the lawsuit arguing that CMED did not pay US$720 000 as agreed.

In addition First Oil argued the contract was not binding because money was paid before signatures.