Mbada Diamonds fails to settle $120k debt

Mashudu Netsianda Senior Court Reporter
A BULAWAYO mechanical engineering company, Eagletron International (Pvt) Ltd has filed a lawsuit against Mbada Diamonds for failing to settle a $120, 000 debt accrued last year over a period of six months.

The debt emanates from goods, which the mining company bought from the engineering firm on credit. The money is for shafts for dough mixers, channel and angle irons and idler rollers.

Eagletron International (Pvt) Ltd t/a Pump and Steel Supplies through its lawyers Dube-Tachiona and Tsvangirai, accused the diamond mining firm of breaching the terms of their agreement by failing to settle the debt within 30 days.

According to the summons filed at the Bulawayo High Court, Eagletron International is the plaintiff while Mbada Diamonds is cited as the defendant.

“Sometime between May and September 2014, the defendant owed plaintiff a balance of $105, 444, 52 for goods which had been bought previously on credit. On May 14, 2014, defendant paid $7, 000; $26, 407, on June 23, 2014 and $15, 000 on September 1, 2014. Despite demanding that Mbada Diamonds pay a total sum of $120, 017,77, defendant has refused, neglected and failed to pay prompting plaintiff to approach this honourable court,” said the plaintiff’s lawyers.

Eagletron International is seeking an order compelling Mbada Diamonds to pay $120, 017,77 with interest at a prescribed bank rate per annum calculated from the date of summons to the date of full and final payment and the cost of suit at attorney-client scale.

“Wherefore the plaintif claim is for defendant to pay $120, 017,77 being the total cost of several products bought by defendant through a credit facility that it has with plaintiff,” read the summons.

In opposing papers, Mbada Diamonds through its lawyers, Mutamangira and Associates, disputed the amount, arguing that Eagletron International had inflated figures.

“The prices that have been charged by the plaintiff were excessive and consequently in violation of the provisions of the Consumer Contracts Act. The rates were very exorbitant and we challenge plaintiff to prove the fairness of the prices. Defendant also disputes the correctness of the amount indicated on the summons as our reconciliations are in variance with what is claimed by plaintiff,” argued Mbada Diamonds.

Mbada Diamonds also indicated in its opposing papers that it needed more time to raise the money following the seizure of its diamonds in Antwerp, Belgium.

“The seizure of the diamonds was not within the control of the defendant and this has affected our performance on our part of the agreement, and this cannot be termed and categorised in the normal case of breach. The story of the seizure of diamonds is in public domain and there is no basis upon which the defendant can be penalised even by an order of costs in such a case,” said the firm. Mbada Diamonds however, acknowledged that it owed Eagletron International and pleaded with the court to be given more time to settle the amount owed.

“The defendant prays for an order that plaintiff be ordered to revisit its accounts, and secondly on the correct account, the defendant be given more time to pay the amount due and owing,” said Mbada Diamonds.

The diamonds company has fallen on hard times with several other cases pitting the mining firm and some of its clients yet to be determined by the High Court.

Last year in November, the Harare High Court ordered the mining company to pay up debts amounting to $700, 000 after the firm failed to defend claims by Tandamanzi Drilling and Hennem Investments for $230, 000 and $469, 365. This prompted Justice Joseph Mafusire to rule in favour of the creditors. Tandamanzi Drilling was engaged by Mbada to undertake core drilling services at Marange diamond fields.

In terms of the agreement, Mbada was supposed to foot all the costs incurred by Tandamanzi in the execution of the task and payment for actual service.

Mbada would pay for the incurred costs upon production of invoices by Tandamanzi.

The bill, according to the invoices, totalled $570, 742 but Mbada Diamonds only paid $340,000, leaving a balance of $230,742 which was not paid on demand. Mbada acknowledged the debt and promised to settle it through monthly instalments, but failed.

In 2012, two widows who lost their husband when he was hit by a dumper in Chiadzwa also filed a lawsuit claiming $700,000 in compensation.

Egna Nyanzou and Mwanyara Njanji blamed Mbada Diamonds for the death of their husband.

The widows want the company to compensate them for loss of support, pain and suffering following the death of their husband on December 18, 2012.

Mbada Diamonds, one of the largest diamond mining companies in Zimbabwe, is also embroiled in a long running dispute with former employees over unpaid salaries and exit packages.