National Social Security Authority v Trust Bank Corporation Limited and Transtobac (Private) Limited

On 17 May 2013, the applicant instituted legal proceedings against the first and second defendants jointly and severally seeking payment of US$4,058,380.02 (capital), US$25,696.87 (interest), further interest at 15% per annum, and costs. The first defendant consented to judgment on 2 January 2014 but was subsequently placed under liquidation. The second defendant filed a plea and contested the claim. Before the scheduled trial date in November 2014, the parties reached a settlement which was reduced to writing in a Deed of Settlement. The settlement provided that: (1) second defendant would pay US$4,297,170.33 to plaintiff in full and final settlement; (2) second defendant would pay US$80,000.00 for legal charges to the plaintiff's attorneys; (3) second defendant would sell immovable property (Remainder of Stand 14906 Salisbury Township) to plaintiff at US$5,940,000.00; and (4) the settlement amounts would be deducted from the purchase price with the balance payable to second defendant upon fulfillment of sale conditions. However, second defendant refused to sign the agreement of sale prepared to implement the settlement, introducing new conditions including a 15% VAT (US$891,000.00) and terms regarding redemption of class C shares, which were not part of the original settlement.

• Whether a deed of settlement filed with the court is enforceable by court order even in the absence of an express provision for enforcement in case of disagreement
• Whether the court can enforce part of a deed of settlement where the other part (relating to property sale) has not been fulfilled
• Whether a matter should be referred back to trial when a dispute arises regarding implementation of a settlement agreement

Judgment entered against the second defendant for payment of: (a) US$4,297,170.33; (b) US$80,000.00; and (c) costs of suit on the ordinary scale.

A deed of settlement filed with the court is enforceable by court order. Where parties have concluded a settlement agreement and one party refuses to execute documents necessary to implement the settlement or attempts to introduce new terms not contemplated in the original agreement, the court has jurisdiction to grant an order compelling compliance with the terms as originally agreed. The fact that a settlement agreement does not expressly provide for enforcement mechanisms in case of disagreement does not preclude the court from enforcing it. A party cannot frustrate the implementation of a settlement by unilaterally adding new conditions or terms that were not part of the original agreement.

The court noted that Mawadze J had previously signed a draft order on 18 May 2015 for judgment against the second defendant for the same amounts now being sought, which tallied with the order the applicant was seeking in this application. This suggests judicial recognition of the enforceability of the settlement at an earlier stage. While the court did not extensively discuss whether partial enforcement of a settlement agreement is permissible, the court's willingness to grant the monetary relief despite the property sale not being completed suggests that severable obligations in a settlement agreement can be enforced independently where one party is in breach.

This case establishes that settlement agreements (deeds of settlement) filed with the court in Zimbabwe are enforceable by court order, and parties cannot unilaterally introduce new terms or conditions that were not part of the original agreement. The case reinforces the principle of pacta sunt servanda (agreements must be kept) and provides that courts will not allow a party to frustrate the implementation of a settlement agreement by refusing to execute documents necessary to give effect to the settlement or by introducing new conditions. It demonstrates the court's willingness to enforce settlement agreements partially where one party refuses to fulfill their obligations, rather than automatically referring matters back to trial.