Forex payments for forex contracts: Court
In a landmark ruling that could have far-reaching consequences, a Mutare High Court judge, Justice Isaac Muzenda has ordered that a 2016 contract be settled in US dollars.
The recent judgment in the Nemchem International versus Cambria Africa for outstanding payment of US$31400 has set the tone for honoring business contracts in the country.
Justice Muzenda ordered Breastplate Services Trading as Nemchem International to pay Cambria Africa the outstanding US$31400 in terms of their original agreement signed on the 1st of March 2016.
The two parties entered into an agreement after the plaintiff sold its entire share capital of Milchem Zambia to the defendant for US$46347 with the amount payable before 31 March 2016.
The court heard that the defendant made part payments leaving a balance of US$31400 which the defendant is accused of refusing to pay.
The defendant argued that the balance was supposed to be settled in Zimbabwean dollars, adding that Statutory Instrument 142 of 2019 made the Zimbabwean dollar the sole legal tender and payments US dollars illegal.
However, the plaintiff successfully submitted that the nature of the agreement between the two parties was exclusive to be settled in US dollars and to be deposited in a Nostro account registered with a local Zimbabwe bank.
It was further argued that Statutory Instrument 142 of 2019 does not bar the defendant from depositing the balance into plaintiff’s foreign currency account.