Adherechem Chemicals (Private) Limited v Grain Marketing Board

In April 2018, the plaintiff (Adherechem Chemicals) and defendant (Grain Marketing Board) entered into a written contract (GMB/PROC/37/03/18) for the supply of 1,000 bitumised tarpaulins at USD 3,622.50 per unit, totaling USD 3,622,500. The tarpaulins were required to meet Zimbabwe Standard Specifications and be tested by the Standards Association of Zimbabwe (SAZ). The plaintiff submitted samples for testing, which failed a leaking test. The defendant initially cancelled the contract on 1 October 2018 due to the failed test. After the plaintiff appealed to the defendant's CEO, the contract was reinstated on 22 October 2018 subject to conditions including that the plaintiff meet all testing costs. An addendum was prepared but never signed by the defendant. The plaintiff submitted further samples, but these also failed water resistance tests. On 10 April 2019, the defendant cancelled the contract purportedly under section 42(1)(b) of the Public Procurement and Disposal of Public Assets Act (PPDPA Act), citing budgetary constraints. The plaintiff instituted action seeking a declaration that the cancellation was void, specific performance or damages totaling USD 355,000 for capital outlay, R785,000 for deposit on sample cloth, and USD 905,625 for lost profits.

• Whether the cancellation of the contract under section 42(1)(b) of the PPDPA Act was valid
• Whether the plaintiff was entitled to specific performance of the contract
• Whether the plaintiff was entitled to damages and loss of profit, and if so, what amount

The plaintiff's claim was dismissed with costs awarded to the defendant.

The binding legal principles established are: (1) Section 42(1)(b) of the PPDPA Act, which permits cancellation of procurement proceedings due to insufficient funding, applies only to the procurement process from pre-bid stage up to and including contract award. It does not extend to cancellation of contracts after award. A purported cancellation of an awarded contract under this provision is void and of no legal effect. (2) A party seeking specific performance must first demonstrate that it has performed, or is ready, willing and able to perform, its own contractual obligations. A party in material breach of contract cannot obtain specific performance. (3) Even where a contract termination is invalid, the court retains discretion to refuse specific performance where circumstances render it impractical or inappropriate. (4) A plaintiff claiming damages must prove both that damage was suffered and its quantum by adducing all reasonably available evidence. Where documentary evidence of transactions exists but is not produced, the court will not award damages based solely on oral testimony.

MUSHURE J made several non-binding observations: (1) The judge noted that the contract, entered into in 2018 in US dollars, had been exposed to two significant currency changes in Zimbabwe (SI 33/2019 converting USD to RTGS at 1:1, and the 2024 conversion to ZiG), which could have severely affected the contract's value. (2) The judge observed that it would be inappropriate for the court to order specific performance in circumstances that would amount to rewriting the contract for the parties, particularly where the plaintiff suggested the contract might not be performed on the same basis as originally agreed. (3) The judge commented that it was "disingenuous" for the defendant's counsel to base an absolution application on section 42(1)(b) after previously conceding it was not applicable, noting the unexplained volte-face. (4) The judge observed that producing samples required for contract compliance inevitably involves costs to the supplier, though the parties had not agreed on reimbursement of such costs in this contract.

This case illustrates important principles in Zimbabwean contract and procurement law: (1) It clarifies the limited scope of section 42(1)(b) of the PPDPA Act, confirming it applies only during procurement proceedings (pre-bid to contract award) and not to cancellation of already-awarded contracts. A cancellation purportedly made under an inapplicable legal provision is void ab initio per McFoy v United Africa Co principles. (2) It reinforces that specific performance, while the primary remedy for breach of contract and a right rather than a mere discretion, will not be granted where the claimant has itself materially breached the contract or failed to perform its obligations. The court retains discretion to refuse specific performance even where a contract was invalidly terminated, particularly where performance has become impractical. (3) It emphasizes the evidentiary burden on plaintiffs claiming damages: while mathematical precision is not always required, plaintiffs must adduce all reasonably available evidence to enable the court to assess damages. Mere oral testimony without documentary corroboration is insufficient where such documentation exists. The case demonstrates that invalidity of a contract termination does not automatically entitle the innocent party to relief if it cannot prove either its readiness to perform or its actual losses.