Zimbabwe: Zitac Faces Eviction

Source from:  All Africa 11/04/2010

BOKA Investments (Private) Limited is seeking to bounce back into tobacco marketing business and is now making efforts to bar Zitac from using its tobacco floors during next year's tobacco marketing season citing a number of contractual breaches. Zitac has been renting Boka premises for the past nine years and the lease agreement expires in 2015. However the deal went sour after Zitac allegedly breached numerous clauses in the agreement, resulting in the cancellation of the agreement. Now Boka, which had won two arbitral awards against Zitac in April and September this year, has issued summons at the High Court barring the Tobacco Industry Marketing Board from issuing Zitac with an auction floor licence for the 2010/2011 tobacco marketing season. Both parties have since applied for auction floor licences for the next tobacco-selling season that begins in the first quarter of 2011. However, TIMB has given the parties until tomorrow to amicably resolve the issue of who should be given the licence. On Tuesday, Zitac lawyer Mr Johannes Muchada of Dube, Manikai and Hwacha wrote to Boka Investments lawyers expressing concern over its move to apply for a licence to operate an auction floor during the next tobacco selling season. "While we acknowledge that your client has instituted eviction proceedings on the basis of an Arbitration Award, our view is that until the eviction proceedings have been finalised in your client's favour, our client should continue to operate the auction floors," read part of the letter dated November 2, 2010. "In the event that your client emerges as a winner in the eviction proceedings they can always claim damages from our client." Mr Muchada said the balance of convenience favoured Zitac because it is still in occupation of the premises on the strength of the lease agreement which expires in six years. He said his client should be licensed to operate the auction floors. However, Mr Joseph Mafusire of Scanlen and Holderness, who is acting for Boka Investments, dismissed the letter by Mr Muchada saying it had nothing to offer. Said Mr Mafusire: "The lease having been determined by reason of your client's breach your client should forthwith vacate our client's premises. But your client is playing for time." He said the lease agreement provided that in the event that Zitac failed to pay rentals as it did, Boka Investments was entitled to cancel the lease without further notice and evict the firm from its premises. "Consequently, there is no conceivable basis upon which our client may consider that the 2010/2011 tobacco auction floor licence may be issued in your client's favour," said Mr Mafusire. "Your client has no business being in our client's premises for any day longer. It is merely taking advantage of the fact that the wheels of justice turn ever so slowly and is therefore bent on exploiting every minute of it. We have very firm instructions to evict your client from our client's premises." In April and September this year, after a protracted process of arbitration as provided for in the lease agreement, an independent arbitrator Mr Benjamin Mutiti made a finding that Zitac failed to pay rentals due to Boka Investments during the Zimbabwe dollar era from April 2004 to February 2009. He ruled that such kind of a breach went to the "root" of the lease. Both arbitral awards were registered at the High Court for purposes of enforcement. However, Zitac is challenging the registration of the final arbitral award to Boka Investments. In its opposing papers Zitac argues that the arbitrator failed to consider its submissions and that it was not given an opportunity to be heard among other grounds of appeal. In its summons, Boka Investments cited TIMB, Third Line Trading (Private) Limited and Onclass Investments (Private) Limited trading as Zitac as defendants. Boka Investments, who are owners of the giant auction floors wants TIMB interdicted from issuing Zitac with tobacco trading licence for the coming season. Boka is claiming that Zitac has caused wanton destruction of the auction floors and turned them into a centre of vice and other degenerating activities. This, Boka Investments says, has brought its image and the tobacco industry into disrepute. "The second and third respondents (Third Line Trading (Private) Limited and Onclass Investments (Private) Limited trading as Zitac) have created conditions conducive for prostitution to thrive at the floors. This is by inter alia operating disorderly and confusing marketing method which has forced tobacco growers to spend several days and nights in, on, at and around the floors without accommodation and sanitary facilities," says the summons filed at the High Court on October 15 this year. Zitac is also accused of promoting multifarious vending activities at the floors by indiscriminately and illegally sub-letting portions of the premises to illegally petty traders. It is further accused of depriving tobacco growers of a significant income by engaging in fraudulent and underhand marketing activities allegedly threatening the viability of the entire tobacco industry and destroying the reputation of the auction floors. "The … defendants' activities are ruining the investment by plaintiff (Boka Investments)'s vision of turning the area around into a world class trade and business opportunities for indigenous Zimbabweans." To this end Boka Investments says it would not be in the best interests of the orderly and efficient marketing of tobacco in the country to grant Zitac the trading licence. This was on the basis that activities of the defendants are causing irreparable harm to the plaintiff and the industry which it says could not be cured by any other remedy. Boka Investments' interdict is also predicated on the fact that it has taken an action to evict the defendants from its premises. This it argues the auction floors are no longer licensable at the defendants' instance as contemplated in the Tobacco Industry and Marketing (Marketing) Rules, 2000, SI 29 of 2000. Enditem