Court Rules Against Mujuru's 1:1 Debt Settlement Plan

THE Supreme Court has ordered former Vice President Joice Mujuru and her company, Ruzirun Investments to settle US$226 000 owed to a farming equipment procuring company, Peppy Motors owned by Sabrina and Tony Sarpo.

Parties have been at loggerheads over the debt which has been outstanding since 2015.

Following a protracted legal battle, Mujuru was ordered to pay the debt by the High Court but failed to do so resulting in her property being attached. She then successfully appealed against the High Court decision prompting Tony and Sabrina to appeal at the Supreme court.

According to court papers, sometime in 2012, the Sarpos obtained a loan from Steward Bank which they used to obtain various farming machinery.

They sold the equipment to Mujuru’s company and an agreement of sale was entered into on July 25, 2015. Mujuru failed to honour the agreement and the couple issued summons under HC2954/18 for payment of outstanding amounts and interests.

Parties had entered into a deed of settlement on May 25, 2019 after Statutory Instrument 33 of 2019 had been gazetted. Mujuru interpreted that the debt, though denominated in US$, could be paid in RTGS dollars. First payment of ZW$76,000 was made on June 5 2019.

Four days later, Mujuru requested payment at interbank rate. Peppy Motors argued that parties entered into a consent order denominated in USD which at the time was legal tender. The company also argued that payment was supposed to be at the prevailing interbank rate.

In their appeal they submitted that the court erred at law and grossly misdirected itself in finding that the Deed of Settlement entered into by the parties on 20 May 2019 and consent order granted on 20 May 2018 fell within the provisions of S.I. 33 of 2019 notwithstanding the deed of settlement and consent order having been entered and granted respectively after the effective date of S.I. 33 of 2019.

The Supreme Court upheld Peppy motors arguments ruling that the High Court had erred in allowing Mujuru to pay in RTGS at a rate of one as to one.The judges said the argument by Mujuru that the deed of settlement and the consent order were merely based on the agreement of sale executed in 2014 therefore lacks merit.

“The court a quo therefore erred when it held that the order by consent did not create any new liabilities but merely pronounced on the existing liabilities of the respondents.

“The respondents were therefore required to discharge their indebtedness by converting the United States dollar judgment to RTGs dollars at the prevailing interbank rate.

“Payment made by the respondents at the one-to-one rate therefore did not discharge their indebtedness to the appellants.

It merely constituted part payment with the balance remaining due and payable. We therefore find that this appeal has merit and ought to succeed.”

Mujuru and her company were also slapped with costs.