cancellation US$19 million maize deal takes legal redress in Zimbabwe

A company has taken government and the central bank to court seeking an order to declare null and void, a recent decision by authorities to cancel a US$19 million maize procurement deal they had secured with the firm.

Blue Chip, trading as Tbacha (Pvt) Ltd (Tbacha), has filed an urgent chamber application citing the finance ministry, Reserve Bank of Zimbabwe and the Grain Marketing Board (GMB) as respondents.

The company wants the respondents interdicted from cancelling the agreement and ordered to allow delivery of maize in terms of the agreement.

The firm also sought to have respondents ensure that all payments were made to it on time and as per agreement.

There is a pending summons matter in which Tbacha is demanding US$3 million damages for cancellation of the contract.

An affidavit deposed by Tbacha director, Nyasha Chabata said the country still needs maize.

“Covid-19 is just being used as a red herring because we face food shortages and government has even gone to appeal for food for over seven million people due to the drought.

“Obviously, my order will not disturb the respondents at all because they are still buying maize,” Chabata said.

GMB is opposed to the application.

GMB officer Obert Paradzayi argued that there was nothing urgent about Tbacha’s application.

“The claim that government intends to receive kickbacks by buying from other parties is one that must be substantiated in the evidence. Applicant must state who is in line to benefit from these kick-backs as it is unfair to make such a sweeping statement against an entire government,” Paradzayi said.

Tbacha claims that they had incurred over US$1 million in debt sourced from credit lines and allege a possibility of loss of over US$10 million worth of maize to weather, lack of storage and theft.