Huge relief for Chivayo’s Intratrek
BUSINESS REPORTER
The High Court has ruled that the procurement contract for the engineering, procurement and construction of the 100MW Gwanda solar project by Intratrek and the Zimbabwe Power Company (ZPC) as amended is binding between the two parties.
The ruling is a huge relief for Wicknell Chivayo’s Intratrek which felt ZPC was failing to meet its side of the bargain in the transaction and esuscitates the US$173m power project that had been stalled by bickering between the two parties.
In his ruling, Justice Siyabona Paul Musithu ordered that consequent to the validity of the EPC contract, an order for specific performance of the said contract “is hereby granted”.
Justice Musithu dismissed with costs ZPC’s claim in reconvention and that the power generation concern should pay Intratrek’s costs of the suit in the claim in convention.
In 2015, the two entities signed a public procurement engineering procurement and construction contract in which Intratrek was required to construct a 100MW solar photovoltaic power station in Gwanda.
The agreed contract price was US$172,848,597.60 which was exclusive of taxes.
Under the contract, Intratrek was to source and facilitate the funding of the project as well as bear most of the risks associated with the construction of the plant up to the point of commissioning.
ZPC was to borrow the funds sourced by Intratrek in its name, superintend over both the construction works and facilitate payments due to Intratrek.
The commencement of the contract was subject to certain suspensive conditions which were to be satisfied or achieved by both Intratrek and ZPC within a period of 24 months from the date the contract was signed, that is October 23, 2017.
Before the expiry of the conditions precedent satisfaction period on October 23, 2017, the parties agreed to enter into another addendum to the contract the terms of which would allow the defendant (ZPC) to pay some of the plaintiff’s (Intratrek) subcontractors directly in order to carry out the precommencement of the contract.
The addendum set different timelines for the conclusion of the pre-commencement works in which ZPC undertook to pay.
However, it failed to pay for such works which resulted in the works either not executed or at all or were not executed timeously.
ZPC then sought to extend the conditions precedent satisfaction period by a period of six months on November 29, 2017 which was in breach of the contract.
Intratrek objected and accused ZPC of having unilaterally demanded that the suspensive conditions be
completed on or before April 23, 2018. In three notices, ZPC informed Intratrek that the contract had expired by operation of law.
Intratrek approached the High Court by way of motion proceedings seeking a declaration of validity of the
contract.
On December 13, 2018, the High Court ruled in favour of Intratrek. ZPC appealed against the ruling at the Supreme Court.
Intratrek approached the High Court for leave to execute the judgment pending the appeal to the Supreme Court.
The relief was granted on June 19, 2019.
In its plea, ZPC raised two preliminary points: it was contended that no cause of action arose from the contract as it never took off. The conditions precedent was not fulfilled such that the contract did not commence.
