Glenix Enterprises (Pvt) Limited v Zimbabwe National Roads Administration

The defendant (ZINARA) issued an email invitation on 20 August 2018 to suppliers to attend a pre-bid meeting for concept and stand design for the agricultural show. The plaintiff, through its managing director Ms Charuka, attended the meeting and submitted a quotation of US$19,962.00 (later revised to US$16,814.00). On 23 August 2018, Mr Moyo, ZINARA's Public Relations Manager, allegedly invited the plaintiff to sign a contract and receive a purchase order, but due to delays, instructed the plaintiff to commence work while the purchase order was being processed. The plaintiff completed the work by 27 August 2018 and submitted an invoice. ZINARA refused payment, claiming no contract existed and that the plaintiff was stopped from working by the acting CEO. The plaintiff sued for US$16,814.00 for services rendered. ZINARA defended on grounds that: (1) no contract was concluded; (2) Mr Moyo had no authority to engage the plaintiff; and (3) the alleged contract was void for non-compliance with procurement laws, specifically the absence of a purchase order required under the Public Procurement and Disposal of Public Assets Act and Regulations.

• Whether a valid contract existed between the parties for the design and setup of the defendant's exhibition stand
• Whether Mr Moyo had ostensible authority to bind the defendant to a contract with the plaintiff
• Whether non-compliance with public procurement legislation (specifically the absence of a purchase order) rendered any alleged contract void and unenforceable
• Whether the plaintiff was entitled to payment for services rendered despite non-compliance with procurement procedures

The plaintiff's claim was dismissed. Each party was ordered to bear its own costs.

A contract entered into with a procuring entity in violation of the Public Procurement and Disposal of Public Assets Act [Chapter 22:23] and the Public Procurement and Disposal of Public Assets (General) Regulations SI 5/2018 is void and unenforceable. Specifically, section 17(2)(f) of the Regulations requires a procuring entity to place a purchase order with the successful bidder, and this is a mandatory prerequisite to a valid contract. A contract that does not comply with statutory procurement requirements is proscribed by law and therefore illegal and void, even in the absence of an express declaration of nullity in the statute. An employee of a procuring entity who lacks express authority to contract cannot bind the entity through ostensible authority unless the plaintiff demonstrates representations by the principal (the entity itself), not merely by the agent/employee, that would reasonably lead a third party to believe the agent had the requisite authority.

The court observed that the conduct of ZINARA's officials, particularly Mr Moyo and Mr Boterere, was highly reprehensible and deserving of censure. These officials appeared to have given tacit approval for the work to proceed, ignored the plaintiff's emails and telephone calls seeking clarity on payment and the purchase order, and prevaricated in their testimony. The court expressed its displeasure by denying costs to the successful defendant, noting that the litigation could have been avoided had ZINARA taken decisive action at an early stage. The court also noted that while the Turquand rule (codified in section 12 of the Companies Act) creates a presumption of regularity for company dealings, it does not apply to procuring entities governed by public procurement legislation. The court further observed that but for the legal impediments (lack of ostensible authority and statutory non-compliance), the only remaining issue would have been quantum, as it was clear that services were in fact rendered to ZINARA.

This case is significant in Zimbabwean law for establishing the strict requirements for public procurement contracts and the consequences of non-compliance. It reinforces that: (1) contracts with procuring entities that do not comply with the Public Procurement and Disposal of Public Assets Act and its Regulations are void and unenforceable, even where services have been rendered; (2) the issuance of a purchase order is a mandatory prerequisite to the valid engagement of a supplier by a procuring entity; (3) the principle that contracts prohibited by statute are illegal and void applies to procurement law; (4) ostensible authority in the context of public entities requires clear evidence of representations by the principal, not merely the agent's actions; and (5) the court retains discretion on costs and may deny costs to a successful party where its officials' conduct was reprehensible and contributed to unnecessary litigation. The judgment serves as a warning to suppliers dealing with procuring entities to ensure strict compliance with procurement procedures before commencing work, and holds procuring entities accountable for the conduct of their officials.