Online Reporter
Fidelis Munyoro
Chief Court Reporter
The High Court has lifted the corporate-rescue shield protecting OK Zimbabwe Limited, allowing landlord Savvas Investments (Private) Limited to proceed with eviction proceedings over its Mount Pleasant property.
Justice Lucy Mungwari ruled that Savvas had demonstrated sufficient grounds to continue its case against the financially distressed retailer despite the statutory moratorium that ordinarily freezes legal proceedings against companies under corporate rescue.
The ruling does not mean OK Zimbabwe has been ordered out of the property. The substantive dispute over the lease, its cancellation, eviction and damages will still have to be determined in the main proceedings.
The dispute centres on a commercial property at 48 Bond Street, Mount Pleasant, which Savvas leased to OK Zimbabwe in December 2024.
Savvas alleges that OK Zimbabwe repeatedly breached the lease by failing to pay rent and other charges on time and by failing to properly maintain the premises.
The landlord says it cancelled the lease on December 12 last year and demanded that OK Zimbabwe vacate.
The retailer remained in occupation.
Savvas subsequently issued summons on February 17 this year seeking confirmation of the cancellation, eviction, holding-over damages and payment of municipal rates.
Seven days later, on February 24, OK Zimbabwe entered voluntary corporate rescue, triggering the statutory moratorium.
Savvas was then required to obtain leave of the court before its pending action could proceed.
OK Zimbabwe opposed the application, arguing that allowing the case to continue would undermine the rescue process and prejudice thousands of creditors, employees and other stakeholders.
But Mungwari J found that the circumstances justified lifting the moratorium.
“Corporate rescue cannot be converted into a substantive extension of a contested lease,” the judge said.
A major factor was the uncertainty surrounding the duration of OK Zimbabwe’s rescue process.
The retailer had previously indicated that it expected to emerge from corporate rescue by July 31. That deadline passed without the company exiting the process.
When the matter was argued, OK Zimbabwe could not give the court a new exit date. Its counsel ultimately accepted that the duration of the rescue was unknown.
The judge found that Savvas was suffering continuing prejudice while the matter remained frozen.
“The prejudice to the applicant is immediate, continuing and capable of increasing,” Mungwari J said.
Savvas alleged that arrear rentals, holding-over damages, municipal charges and electricity liabilities continued to accumulate while OK Zimbabwe remained in occupation. It also alleged that the property had deteriorated and that it had incurred repair costs.
OK Zimbabwe disputed the allegations and challenged the legality of the lease cancellation.
The judge deliberately left those issues unresolved.
The question before the court, Mungwari J said, was not whether Savvas had already won its eviction claim, but whether the interests of justice justified allowing the existing case to proceed.
The timing of the case was significant.
Savvas had issued summons before OK Zimbabwe entered corporate rescue, meaning it was seeking permission to continue an existing dispute rather than launch fresh proceedings against a company already under the moratorium.
The judge also found that Savvas’ position was different from that of an ordinary creditor simply seeking payment of a debt.
The landlord was asserting rights over its property, which it alleged was being occupied after cancellation of the lease.
OK Zimbabwe argued that its rescue plan addressed the disputed premises. However, the company did not produce the plan or demonstrate that the property was indispensable to its restructuring programme.
Justice Mungwari said the retailer had not shown that allowing the litigation to continue would necessarily destroy the rescue process.
“The respondent has not sufficiently demonstrated that continuation of the already pending proceedings will fatally disrupt its rescue plan,” the judge said.
The court rejected concerns that granting Savvas leave would automatically open the floodgates to other creditors.
Each applicant, the judge said, would still have to satisfy the requirements of section 126 of the Insolvency Act.
Savvas had sought punitive attorney-and-client costs, arguing that the matter had been delayed amid assurances that OK Zimbabwe would leave corporate rescue by July.
The court declined the request.
Justice Mungwari found that OK Zimbabwe was entitled to defend the rescue process and contest the alleged cancellation of the lease. Its opposition had not been shown to be dishonest, vexatious or an abuse of court process.
The company was therefore ordered to pay costs on the ordinary scale. The court ultimately granted Savvas leave to continue with HCHC 110/26.
The substantive battle now returns to the main case, where the court will determine whether the lease was validly cancelled, whether OK Zimbabwe has a right to remain at the property and whether Savvas is entitled to eviction and damages.
