Avim Investments (Pvt) Ltd v Hwange Colliery Company Limited and Zhong Jiang (Private) Limited

On 13 March 2018, the applicant and first respondent entered into an Equipment Hire Agreement for mining equipment and labour for coal mining at the first respondent's Chaba Pit, with a duration of 6 years. The applicant transported mining equipment including excavators, dump trucks and bulldozers to the first respondent in April 2018. During the first quarter of 2019, the first respondent unilaterally stopped the applicant from operating, alleging that the contract violated the Public Procurement and Disposal of Public Assets Act (Chapter 22:23) as it did not comply with procurement procedures. The applicant was ordered to remove its equipment. The first respondent subsequently awarded the same contract to the second respondent, purportedly in line with procurement provisions. The applicant only became aware of this arrangement on 5 January 2022 when a police report confirmed that the first respondent was not a Procurement Entity bound by tender procedures, and the matter should be pursued as a civil case.

• Whether the matter was urgent
• Whether leave of the administrator was required to proceed against a company under administration
• Whether the second respondent was properly joined to the proceedings
• Whether the application was fatally defective
• Whether the requirements for an interdict were satisfied

The application was granted. The respondents were ordered to bear the costs of suit.

The binding legal principles established are: (1) In urgent matters where an applicant seeks protection of rights, the court has discretion to entertain the matter even where leave of an administrator under the Reconstruction of State Indebted Insolvent Companies Act has not been sought, particularly where the administrator has an interest in the outcome and could hardly grant such leave. (2) Urgency is established when the need to act arises from receipt of official confirmation that changes the legal position, even if the underlying contract was entered into years earlier - the applicant cannot be expected to act while matters are under criminal investigation. (3) For an interdict to be granted, the applicant must establish: (a) a prima facie right, though open to some doubt; (b) a well-grounded apprehension of irreparable injury; (c) the absence of any other adequate remedy; and (d) that the balance of convenience favours the applicant. (4) Damages are not an adequate alternative remedy where they are not easily quantifiable. (5) Where a contract has been unilaterally terminated on the basis of an incorrect assertion of law (that procurement procedures applied when they did not), and that contract has been awarded to another party, the balance of convenience favours restoring the position to the original contracting party.

The court observed that the first respondent's and second respondent's assertion that the applicant had an alternative remedy in the form of damages contradicted their own averment that there was no valid contract between the applicant and first respondent. The court also noted that the second respondent's assertions on misjoinder contradicted its conduct in raising strong opposition to the order sought on the merits. The court commented that in urgent matters, the court has discretion to amend the interim or final relief sought, in response to arguments that the order was not competent.

This case is significant in Zimbabwean jurisprudence as it clarifies the principles applicable to urgent applications where a company is under administration, particularly regarding the court's discretion to grant leave to proceed in urgent matters. It also reinforces the principles governing interdicts in contractual disputes, particularly where a contract has been unilaterally terminated on the basis of incorrect legal grounds (that the party was subject to public procurement procedures when it was not). The case demonstrates that where a party's rights have been undermined based on a factual error regarding legal status, and that error is later officially confirmed, urgency arises from the date of confirmation. It also illustrates the application of the balance of convenience test in mining contract disputes.