Delta loses multimillion rand appeal

THE Supreme Court has confirmed as legitimate, a multi-million dollar agreement in which a South African conglomerate, Blakey Plastics Investments, signed a contract to supply plastic products to Delta Beverages Holdings Pvt Ltd for a period of five years.

The five-year supply chain agreement was signed in March 2018 by Blakey Plastics Investments and a representative of Delta Beverages, but Delta made a U-turn in 2019 and disregarded the contract.

Blakey Investments then asked for payment of R150 million for goods sold and delivered pursuant to the agreement.

Delta refused to pay and approached the High Court in 2020 seeking an order nullifying the agreement, arguing that Ms Cynthia Malaba, who signed on its behalf, had no lawful authority to do so.

Delta also contended that the company’s senior officials were not aware of such an agreement and that it only came to light through an audit conducted in 2019.

The company was also uncomfortable with the terms of the agreement which is governed by South African law, among other issues.

The High Court threw out Delta’s appeal arguing that the agreement was valid. Delta approached the Supreme Court, which yesterday upheld the High Court decision and confirmed the agreement as valid and legitimate.

“The court a quo’s (High Court) finding that the written agreement was an act of the appellant cannot be faulted given the evidence placed before it,” ruled Justice Alphas Chitakunye. “The applicant is bound to the contract that it entered into.

“As the contract provided for amendment, if the appellant realised it had not bargained well, its recourse was to seek amendments in terms of the contract. The appeal is without merit. Accordingly, it is ordered that the appeal be and is hereby dismissed with costs.”

JusticesChinembiri Bhunu and Lavender Makoni concurred.
Delta Beverages’ major subsidiary, Schweppes Zimbabwe (Pvt) Ltd, also recently lost a Supreme Court appeal in an attempt to wriggle out of another R265 million existing supply chain agreement involving the same supplier, Blakey Plastics (PTY) Ltd.

Earlier this year in February, Justice George Chiweshe sitting with Justice Chinembiri Bhunu and Justice Joseph Musakwa dismissed their appeal and upheld the High Court decision by Justice Tawanda Chitapi with an extempore judgment.

In both matters, Delta Beverages was represented by Advocate Thabani Mpofu instructed by Scanlen & Holderness legal practitioners, while Blakey Plastics was represented by Advocate Feroz Girach instructed by Atherstone & Cook legal practitioners.

Dismissing Delta’s appeal, Justice Chitakunye said there was nothing to show that Ms Malaba, being Delta’s supply chain director, had no authority to sign the agreement on behalf of the beverages firm.

The court also held that Delta top management was aware of the agreement.

“In casu, Cynthia (Malaba) was an agent of the applicant as she was employed as its Supply Chain director and there was nothing to show that she did not have the authority to sign the agreement on behalf of the appellant,” he said.

“In any event, the respondent submitted previous agreements between the parties which the appellant did not dispute. These agreements include a finance credit agreement signed by H Huruva on October 25 2013 as procurement manager for appellant.

“The second one is a procurement agreement signed by Cynthia on behalf of the appellant on October 28 2017, effective October 1 2017, for the procurement of similar goods as in the disputed contract.

“That prior contract was apparently honoured by the appellant without any disputation.

It was at its expiry that the contract in issue was then entered into in March 2018 by Cynthia.”
The court also shot down another claim by Delta that the senior managers were not aware of the contract in question.

“The appellant’s contention that it was not aware of the contract in question till its internal audit of July 2019 is without merit,” said Justice Chitakunye.

“The audit report itself shows that other senior employees were aware of this contract.
For instance, a Mrs Mbelegwa, whose designation was general manager-procurement, acknowledged that she knew of the contract . . . ”

Email correspondences produced in court also confirm the management was in the know. The court also held that the parties had agreed to have their agreement governed by South African law and Delta cannot now cry foul over use of a foreign law.

“The parties were alive to their freedom on choice of law and they chose that the agreement was to be governed by and must be interpreted and construed in accordance with the laws of the Republic of South Africa,” reads the 22-page judgment.

Contacted for comment, Mr Suman Panday of Blakey Plastics said: “We are extremely grateful and ecstatic after receiving this long awaited, well articulated and brilliant judgement.”

The prominent South African businessman and billionaire said like anywhere else in the world, it was encouraging to note that Zimbabwe’s superior courts fairly exercise jurisprudence without any fear or favour.

“With such an impartial judiciary, Zimbabwe is a safe destination for investment and indeed the mantra “Zimbabwe is open for business” and the National Development Strategy 1 main goal to develop your country into a middle class economy by 2030 is achievable against all odds,” he said.-The Herald