Online Reporter
Fidelis Munyoro
Chief Court Reporter
The High Court Commercial Division has struck off an application by Zesa Holdings seeking to set aside a consent order entered into with software supplier Terrific Tech over a US$1,5 million Microsoft licencing dispute, while also dismissing a counter-application by the supplier seeking to compel payment exclusively in US dollars.
Justice Faith Mushure ruled that Zesa had relied on the wrong legal provision in bringing its application and, therefore, there was no valid application before the court.
The dispute arose from a July 2023 agreement under which Terrific Tech was to supply Microsoft software licences worth more than US$1,6 million to Zesa.
The supplier delivered six licences on July 24, 2023, but Zesa paid only US$106 000 towards the contract price.
Terrific Tech later sued under case number HCHC28/24 for payment of more than US$1,53 million, being the balance allegedly owed.
The parties eventually signed a deed of settlement in July 2024, which was made an order of court by consent on August 9, 2024.
Under the agreement, Zesa acknowledged the debt and undertook to pay it in six monthly instalments. The settlement also allowed payment in local currency at the prevailing official exchange rate.
Zesa subsequently made several payments in ZiG currency. Terrific Tech later wrote to Zesa’s lawyers saying it was facing difficulties converting the ZiG payments into US dollars needed to remit funds to Microsoft.
The supplier requested payment in US dollars instead and proposed supplying licences worth only US$20 000.
Zesa rejected the proposal, insisting the supplier had represented that it had already paid Microsoft and demanded restoration of the licences in line with the settlement agreement.
After the parties failed to resolve the dispute, Zesa approached the court seeking termination of the settlement agreement and rescission of the consent order.
Terrific Tech opposed the application and filed a counter-application seeking amendment of the settlement agreement so that all payments would be made exclusively in United States dollars.
Justice Mushure ruled that Zesa should have proceeded under Rule 19(6) of the High Court Commercial Division Rules rather than Rule 21(2) of the High Court Rules.
The judge found that the consent order had been granted during a pre-trial case management process under the Commercial Division Rules and any attempt to set it aside had to comply with the specific provisions governing such orders.
Citing Constitutional Court authority, the judge said failure to rely on the correct rule rendered the application fatally defective.
“There is none,” Justice Mushure said in reference to the existence of a valid application before the court.
The court nevertheless proceeded to determine Terrific Tech’s counter-application.
Justice Mushure rejected the supplier’s argument that the original contract required payment strictly in United States dollars, pointing to a clause permitting payment in Zimbabwean currency at the prevailing Reserve Bank exchange rate.
The judge also held that the deed of settlement constituted a compromise agreement that replaced the original obligations between the parties.
“The respondent cannot seek to revert to the original contract by amending the deed of settlement,” the judgment read.
The court further ruled that it could not rewrite contracts voluntarily entered into by parties and dismissed arguments based on shortages of foreign currency and market conditions.
Justice Mushure said the supplier had failed to prove that performance of the agreement had become impossible.
The judge also declined to uphold a plea of lis pendens raised against the counter-application, saying the matter had already been argued and further delays would undermine the expeditious resolution of commercial disputes.
The court ordered that the main application be struck off the roll, the counter-application be dismissed, and each party bear its own costs.
