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But the High Court ruled on Wednesday that an indigenous investment company, Vakakora Capital (Pvt) Limited, could sue two private newspapers, NewsDay and the Daily News, for articles they published in May last year, saying there was political violence in the country.
Vakakora Capital argued that it lost $250 million after the stories scared away foreign investors who had shown interest in working with the company.
NewsDay tried to block the lawsuit arguing that there was no law prohibiting a newspaper from causing economic loss by publishing inaccurate articles.
NewsDay published a front page story on 5 May 2011 headlined: “Violence Erupts Countrywide”, while the Daily News edition of 11 May 2011 carried a story entitled: “SADC Troika Directive Violated Priorities Issue of Violence During Talks.”
The articles, according to Vakakora Capital, resulted in the firm losing a $250 million credit facility it had secured from a Namibian company, Crown Finances Corporation, to finance its projects in Zimbabwe.
The facility was cancelled shortly before the signing ceremony, which had been set for Sandton, Johannesburg.
Vakakora Capital is now claiming damages in the sum of $50 million from the two independent papers.
The company stood to earn $50 million if the investment deal was eventually signed.
Vakakora Capital claims that Crown Finance Corporation advised them of its decision to withdraw the loan facility, saying it was influenced by reports of violence in the two newspapers.
The CFC said it feared that the country risk would escalate to untenable levels and render the recovery of the loan impossible.
Vakakora Capital said as a result of the two daily newspapers’ misrepresentations of the situation in Zimbabwe, it suffered loss of the withdrawal of the facility. When the matter was brought to the High Court for hearing, NewsDay, which was being represented by Advocate Erick Morris, instructed by Atherstone and Cook raised an exception to the claim.
“Accordingly, the first huge barrier that the respondent has to surmount before it can move on to the other aspects of its claim, therefore, is that it is not prima facie wrongful and unlawful to cause a man economic loss, even if such loss was reasonably foreseeable as a result of a certain cause of action…” argued Adv Morris. He submitted that what was fundamentally important was the issue of press freedom.
Adv Morris said the role of publishers of a newspaper was to keep society aware of what was going on around it in the country.
In his counter argument, Mr Terence Hussein of Hussein, Ranchhod and Company, who is appearing for Vakakora Capital, objected to the exception plea.
He said for an exception to be upheld, the applicant should show that the pleading does not disclose a cause of action. He the newspapers’ application for exception was “vague and embarrassing”.
Justice November Mtshiya ruled that the company could go ahead and sue the newspapers for the financial losses. “What I seem to hear from the complainant is that because the plaintiff’s action relates to economic loss, then there should be a special way of pleading. I do not agree,” said Justice Mutshiya.
“The exception be and is hereby dismissed.”
Mr Hussein welcomed the court ruling, saying its effect was that a newspaper can be held accountable for publishing false stories that financially affect people.
“In this case, we were saying in terms of what we believed there was breach of a statutory duty imposed by AIPPA (Access to Information and Private Protection Act) on newspapers to report factually,” said Mr Hussein.
Online Reporter