Parliament of Zimbabwe v MCT Investments (Private) Limited t/a Motor City Toyota

The plaintiff (Parliament of Zimbabwe) entered into a verbal agreement with the defendant (MCT Investments t/a Motor City Toyota) for the purchase of three Toyota Hilux motor vehicles for US$104,849.99. Payment was made by the plaintiff on 17 April 2017 through the RTGS platform. The defendant, which imports vehicles from South Africa, applied to its bank (BancABC) on 18 May 2017 for foreign currency allocation to pay its South African supplier (ZAR1,187,614.00). Despite repeated attempts and support letters from the plaintiff to the bank (dated 17 May 2017 and 20 September 2018), the defendant failed to secure foreign currency allocation from the Reserve Bank of Zimbabwe through its bankers to pay the supplier. The vehicles were therefore never delivered. The plaintiff sued for specific performance, claiming delivery of the three vehicles or alternatively recovery through the Sheriff.

• Whether the plaintiff had locus standi in judicio (abandoned during trial)
• Whether in terms of the agreement between the parties, the delivery of the motor vehicles was conditional upon the defendant obtaining an allocation of foreign currency from the Reserve Bank of Zimbabwe or any other financial institution
• Whether the defendant's failure to obtain foreign currency constitutes a supervening impossibility which would discharge it from its contractual obligation

The plaintiff's claim was dismissed with costs.

Where parties enter into a contract for the sale of goods to be imported, and it is apparent from the parties' conduct and circumstances that both parties were aware that performance was conditional upon obtaining foreign currency allocation from the Reserve Bank through banking channels, the failure to secure such allocation through no fault of the debtor constitutes supervening impossibility that discharges the debtor from contractual obligations. A party's conduct, including providing support letters to assist with foreign currency applications, can demonstrate knowledge of and agreement to conditions precedent, even where such conditions are not expressly stated in a verbal agreement. Where performance becomes impossible due to circumstances beyond the debtor's control (such as failure to obtain required foreign currency allocation from regulatory authorities), and the debtor has taken all reasonable steps to perform, the debtor is discharged from the obligation to perform.

The court observed that if the plaintiff genuinely believed the defendant had the vehicles in stock at the time of contracting, it would have been expected to either cancel the agreement upon discovering otherwise or place the defendant in mora after the promised 6-week delivery period expired. The plaintiff's failure to take such action and instead its continued support of the defendant's foreign currency applications was inconsistent with its pleaded case. The court noted that the plaintiff had not prayed for any alternative relief, and the court could not formulate one for the plaintiff.

This case is significant in Zimbabwean commercial law as it addresses the doctrine of supervening impossibility in the context of foreign currency shortages and government-imposed exchange controls. It demonstrates how economic conditions and regulatory constraints (such as Reserve Bank of Zimbabwe's control over foreign currency allocation) can constitute supervening impossibility that discharges contractual obligations. The case also illustrates the importance of party conduct in determining the true terms of verbal agreements, particularly regarding conditions precedent. The principle applies where performance becomes objectively impossible due to circumstances beyond the debtor's control and for which the debtor cannot be blamed.