Zimbabwe Power Company (Private) Limited v Intratrek Zimbabwe (Private) Limited

The appellant, Zimbabwe Power Company (Pvt) Ltd, a state-owned subsidiary of ZESA Holdings, awarded a tender to the respondent, Intratrek Zimbabwe (Pvt) Ltd, a private engineering company, to construct a 100MW photovoltaic solar plant at Gwanda. The parties concluded an engineering, procurement and construction contract on 23 October 2015. The contract contained conditions precedent under clause 5 that had to be satisfied within 24 months, which could be extended by 6 months at the appellant's discretion. The respondent failed to meet the prescribed conditions precedent within the stipulated period. Despite an extension to 23 April 2018, the conditions precedent remained unfulfilled. On 4 April 2018, the appellant notified the respondent of its intention not to extend the contract beyond 23 April 2018 and threatened termination and a refund of advance payments. To pre-empt termination, the respondent approached the High Court by way of application on 6 September 2018 seeking specific performance and extension of the conditions precedent satisfaction period, alternatively damages of US$25 million. The High Court upheld the respondent's application. The appellant appealed, arguing inter alia that the matter involved material disputes of fact unsuitable for determination by application proceedings.

• Whether the respondent used the correct procedure by approaching the court by way of application instead of action proceedings given the existence of material disputes of fact
• Whether the contract between the parties had lapsed by operation of law due to non-fulfillment of conditions precedent
• Whether the court a quo erred in making factual findings on disputed issues without hearing viva voce evidence
• Whether specific performance of the contract could be ordered in circumstances of alleged breach

The appeal succeeded with costs. The judgment of the High Court was set aside and substituted with an order dismissing the application with costs.

Where serious and intractable material disputes of fact exist between parties that cannot be resolved on the papers alone, application proceedings (motion proceedings) are inappropriate and the matter must proceed by way of action with viva voce evidence. A material dispute of fact arises when material facts alleged by the applicant are disputed and traversed by the respondent in such a manner as to leave the court with no ready answer to the dispute between the parties in the absence of further evidence. Where an applicant deliberately chooses application proceedings despite knowing that serious disputes of fact are bound to develop, the court may exercise its discretion to dismiss the application with costs.

The Court made observations about the protracted contractual disputes between the parties that had prevented progress on an important electricity generation project for Zimbabwe for approximately five years, noting that it was of utmost importance that their contractual disputes be resolved expeditiously for the common good given the country's critical shortage of electricity. The Court also commented that the respondent's choice of procedure gave the impression that it had something to hide that could be unearthed in trial proceedings, and that this was a borderline case for punitive costs, though it ultimately declined to award such costs but issued a severe warning.

This case reinforces the fundamental principles of civil procedure in South African and Zimbabwean law regarding the proper use of application proceedings versus action proceedings. It emphasizes that litigants cannot circumvent proper trial procedures by using motion proceedings when material disputes of fact exist. The judgment serves as a warning to litigants and legal practitioners against deliberately choosing incorrect procedures to avoid full trials where complex factual disputes require viva voce evidence for proper resolution. The case is also significant in the context of public interest litigation involving critical infrastructure projects, demonstrating that even matters of national importance involving electricity generation must follow proper procedural requirements.