Fidelis Munyoro Chief Court Reporter
First Oil, facing a lawsuit by CMED to recover $2,7 million it was paid for fuel never delivered is now applying to have ZB Bank and two of its managers joined to the suit, alleging first that the bank made an error when processing a payment instruction and then claiming that the two managers had been part of a set of transactions to swindle First Oil.
First Oil applied on Monday to have ZB Bank, its finance director Phanuel Kapanje and Kiliana Bangure joined in the civil suit. The company said an undisclosed South African private investigating company had carried out the investigations.
The application hearing had been set for Monday, but Advocate Webster Chinamhora, who stood in for Advocate Lewis Uriri, who is representing the company, was involved in another matter in the Supreme Court sitting in Bulawayo and asked for the matter to be removed from the roll.
It is the contention of First Oil that a joinder was necessary, arguing that Kapanje and Bangure would be liable to indemnify the company from any judgment the court may enter against it.
ZB Bank, Kapanje, Bangure and CMED were cited in the latest application as respondents with six others. The First Oil application for joinder was a response to CMED lawsuit against fuel supplying company and its directors, Maxwell William Katunga, Lynon Gilbert Katunga, Alex Kudakwashe Mahuni, Gavin Allen Katunga, Davison Mhaka and Brian Manjengwa.
They are accused of swindling the Government of $2,7 million in the failed fuel deal.
CMED is suing for damages resulting from First Oil’s breach of contract.
“The first defendant (First Oil), hereby prays for a stay of the present action pending the third party joinder of ZB Bank Limited, Phanuel Kapanje and Kiliana Bangure under rule 93 of this Court’s rules,” said First Oil in its papers.
“The first to third respondents (ZB Bank, Kapanje and Bangure) are directly responsible for the applicant’s failure to fulfil certain of its contractual obligations to the 4th respondent (CMED).”
The contractual dispute arose in 2013, after First Oil concluded a contract with CMED to supply diesel.
CMED transferred $2,7 million to the credit of First Oil’s account with ZB Bank’s Avondale Branch.
In the meantime, First Oil entered into a contract with Micro Petroleum Inc. of Hong Kong, which was to supply it with the diesel consignment to service the deal.
On March 1, 2013, First Oil allegedly executed an MT 103/23 instruction to the ZB Bank requiring it to transfer $2 360 000 to Micro Petroleum Inc. as the purchase price of the CMED’s diesel consignment.
The transaction at ZB Bank’s Avondale Branch, involved the attention of Kapanje and Bangure– as senior banking officials, said First Oil.
“On the basis of ordinary banking practice and custom, the 1st Respondent (ZB Bank) was enjoined to only effect transfer to Micro Petroleum Inc. after the applicant had first confirmed that the diesel consignment from Micro Petroleum Inc. had arrived at Msasa, Harare,” said First Oil.
“But the first respondent deliberately ignored the MT 103/23’s requirement to await confirmation of delivery. Rather, the first respondent effected an EFT transfer — immediately effected transfer — to Micro Petroleum Inc.”
First Oil, went further. The company said Kapanje and Bangure had an underlying bad faith arrangement, with Richard David Myburgh of South Africa, to defraud the company of those funds.
“The 2nd and 3rd respondents connived, schemed and colluded with Richard David Myburgh to immediately transfer the funds to Hong Kong,” alleged First Oil.
“They transferred those funds to the credit of Micro Petroleum Inc.’s nominated beneficiary — EBG Hong Kong — a bureau de change. From EBG Hong Kong, the money was transferred to an account with ABSA Bank in South Africa.”
The money, said First Oil, was subsequently transferred from the ABSA account into the accounts of several persons, including one PV Sachar — into which was deposited some 7 million rands.
PV Sachar then allegedly transferred the money to another account with FNB Bank South Africa. From that FNB Bank account, 3 million rands was transferred to the Kapanje and 4 million rands to Bangure.
“Micro Petroleum Inc. did not supply the diesel consignment. The risk which the applicant sought to avert by executing an MT 103/23 — which emphasis on prior delivery before transfer — has thus eventuated because the respondents breached their duties of care to the applicant.”
First Oil said because of that failure, CMED has instituted a legal proceedings against it under HC 8721/2014 for restitution and damages for loss of profit, together with interest.