Online Reporter
Fidelis Munyoro
Chief Court Reporter
Forever Africa (Private) Limited has successfully defended itself against a US$418 950 claim from HRL Safari LLC, a Delaware-based company, in a judgment handed down by Justice Faith Mushure in the High Court’s Commercial Division.
The court dismissed HRL Safari’s claim with costs, finding no justification to hold Forever Africa liable for the debt.
The dispute revolved around a loan originally advanced to Forever Africa in 2018 by Vantage Travel Services Inc. to fund the construction of the Iganyana Tented Camp in Hwange.
The loan was later transferred to Safari Connect, a Mauritian company, under a deed of novation.
HRL Safari, which had taken over the loan rights from Vantage, sought to recover the debt from Forever Africa, arguing that Forever Africa and Safari Connect were a single economic entity operating as one.
HRL Safari alleged that Safari Connect, which had since become insolvent, was merely a corporate façade for Forever Africa. It sought to have the corporate veil lifted, making Forever Africa liable for Safari Connect’s obligations.
However, the court found insufficient evidence to support this claim.
Justice Mushure stated: “The plaintiff has not been able to place any evidence before the court to prove its contentions that Safari Connect and the defendant are a single economic entity.”
The judge stressed that separate legal personality is a core principle of corporate law and that piercing the corporate veil is reserved for exceptional circumstances, such as fraud or abuse of corporate structures.
The court noted that while Safari Connect acted as Forever Africa’s agent in some transactions, it was not proven that the two companies were inextricably linked or controlled as one entity.
Additionally, the plaintiff failed to show that Safari Connect’s insolvency or loan arrangements were part of a deliberate scheme by Forever Africa to evade its obligations.
Forever Africa had argued that it was released from liability under the novation agreement and that Safari Connect was not its subsidiary. The court agreed, concluding that Forever Africa could not be held accountable for Safari Connect’s debts.
With the case dismissed, Forever Africa has avoided a significant financial liability, leaving HRL Safari to bear the legal costs of the proceedings.
