In September 2019, the applicant (Curcuma Investments) and the 1st respondent (Icon Alloys) entered into a written mining agreement whereby the applicant was authorized to carry out mining activities on Prince 3 mine (Registration Number 15124BM) in the Mashava area of Masvingo district, in return for an 18% royalty fee. The contract was to subsist for 60 months. Disputes arose in October 2021, resulting in an urgent application which was resolved by consent order on 27 October 2021, declaring the agreement valid and binding subject to an addendum. Shortly thereafter, further disputes arose over the interpretation of clause 4.2 of the addendum concerning when royalties were payable (in advance versus after marketing). The 1st respondent purportedly unilaterally cancelled the contract on 21 January 2022 on the basis of alleged material breach (failure to pay royalties) invoking clause 5.7 of the contract. The applicant brought an urgent application for a provisional order interdicting the respondents from interfering with its mining operations pending the return date.
The application for a provisional order was dismissed with costs awarded to the respondents.
Where a contract has been unilaterally cancelled by one party, the other party cannot obtain a provisional order for specific performance (or an interdict amounting to specific performance) based on that contract unless and until the cancellation has been set aside by a court of law. Cancellation is a unilateral act that takes effect upon communication to the other party and terminates the primary obligations under the contract. A party seeking relief under a cancelled contract must first obtain an order setting aside the cancellation before being entitled to specific performance or interdictory relief enforcing the contract's terms.
The court observed that it has discretion in every application for an interdict pendente lite, which discretion is exercised upon consideration of all circumstances, particularly the injury which the respondent will suffer if the application is granted and ultimately turns out to be wrong, versus the injury the applicant might sustain if refused and ultimately turns out to be right. The court noted out of an abundance of caution it had invited parties to submit supplementary heads on whether the balance of convenience favoured suspending all mining activities by both parties pending the return date, though this was not ultimately determinative given the finding on the absence of a clear or prima facie right.
This case is significant in Zimbabwean law (applicable in South African context by analogy) for establishing that a party seeking interim interdictory relief in the form of specific performance cannot succeed on the basis of a contract that has been unilaterally cancelled, even if only on a prima facie basis, unless and until the cancellation has been set aside by a court order. It reaffirms the principle that cancellation of a contract is a unilateral act that takes immediate effect upon communication, terminating the primary obligations between parties. The case demonstrates the strict approach courts take to applications for provisional orders where the underlying right itself is disputed, requiring that foundational legal issues (such as validity of cancellation) be resolved before specific performance can be ordered.