ZESA Holdings (Private) Limited v Terrific Tech (Private) Limited

The parties entered into a 12-month contract on 18 July 2023 whereby the respondent would supply the applicant with Microsoft software licences worth US$1,616,832.14. The respondent delivered six licences on 24 July 2023, but the applicant only paid US$106,000 towards the contract price. The respondent sued under HCHC28/24 for the balance of US$1,532,558. After several case management conferences, the parties entered into a deed of settlement on 9 July 2024, which was granted as an order by consent on 9 August 2024. The deed provided for payment in six monthly instalments, with the applicant having the right to pay in local currency at the prevailing official rate. The applicant made three payments in ZiG currency (Zimbabwe Gold). The respondent then advised it could not convert the ZiG payments to US dollars to remit to Microsoft and requested payment exclusively in US dollars. When the applicant refused, the respondent alleged breach and the applicant sought to set aside the order by consent.

• Whether the application to set aside the order by consent was predicated on the wrong law
• Whether the counter-application was lis pendens
• Whether the court has power to amend a deed of settlement to revert to original contract terms
• Whether supervening impossibility justified alteration of the deed of settlement
• The proper rule under which an order by consent granted during pre-trial case management can be set aside

1. The main application is struck off the roll. 2. The counter application is dismissed. 3. Each party shall bear its own costs.

The binding legal principles established are: (1) An application to set aside an order by consent granted during a pre-trial case management conference in the Commercial Division must be made in terms of Rule 19(6) of the High Court (Commercial Division) Rules, not Rule 21(2) of the High Court Rules. (2) Failure to cite the correct rule in terms of which an application is made renders the application fatally defective. (3) A compromise agreement (deed of settlement) replaces the disputed obligations with new obligations created by the settlement, and precludes action on the original debt unless the compromise specifically provides that the original claim shall revive upon non-performance. (4) Courts will not rewrite contracts that parties have freely and voluntarily entered into, even where terms prove onerous or oppressive. (5) Shortage of foreign currency does not constitute absolute supervening impossibility justifying alteration of contractual obligations; impossibility must be final and complete, not temporary difficulty or increased expense. (6) The plea of lis pendens may be ignored where the balance of convenience and interests of justice favour proceeding with determination of the matter.

The court made several non-binding observations: (1) Rule 19(1) permits a judge to hold a pre-trial case management hearing at any time before a case is tried, even if the matter has been set down for trial. (2) A matter remains at the case management stage until issues for trial have been identified. (3) The court expressed concern about the lack of follow-through by the respondent in pursuing advice from the Reserve Bank of Zimbabwe regarding accessing foreign currency through the interbank market. (4) The court noted it would be inappropriate to take judicial notice of acute foreign currency shortages without an official statement or certificate from the Executive or Reserve Bank, as such pronouncements may reduce confidence in those transacting business with Zimbabwe. (5) The court observed that deteriorations in financial strength or commercial circumstances that make contractual obligations difficult, expensive or unaffordable are foreseeable in the business world and do not constitute impossibility. (6) The court commented that nothing precluded the respondent from prosecuting its counter-application under the previous case number, and it was disingenuous to blame the applicant for the "mess" created by filing duplicate counter-applications.

This case is significant in Zimbabwean commercial law for several reasons: (1) it clarifies the procedural requirements for setting aside orders by consent granted during pre-trial case management conferences in the Commercial Division; (2) it reaffirms the strict approach to citing the correct legal provision when making applications, following the Constitutional Court's guidance in Minister of Mines v Fidelity Printers; (3) it reinforces the principle that compromise agreements (deeds of settlement) replace original obligations and courts will not rewrite contracts to revert to original terms; (4) it confirms that shortage of foreign currency does not constitute supervening impossibility justifying alteration of contractual obligations; and (5) it demonstrates the court's flexibility in dealing with lis pendens where the balance of convenience favours proceeding in the interests of justice and expeditious resolution of commercial disputes.