AfrAsia challenges court's decision on RioZim

AfrAsia challenges court's decision on RioZim
Published: 19 July 2017
AfrAsia Bank has filed an appeal at the Supreme Court challenging the High Court's decision to nullify the deed of settlement signed between the bank and mining company RioZim.

This comes as the bank lost its bid to force RioZim to settle over $4,5 million in interest charges and loans after it emerged the financial institution could have unfairly bloated interest and bank charges on the debt. In its notice and grounds of appeal, AfrAsia represented by Mr Farayi Siyakurima of Sawyer and Mkushi law firm argues that the lower court erred at law in refusing to confirm the deed of settlement.

"The court a quo (Lower Court) misdirected itself in law in finding that the respondent (Rio Zim) had been overcharged on interest when the issue was not properly before it and in any event would have been best dealt with in a trail or through viva voce (oral evidence)," argues Mr Siyakurima.

"The court a quo erred in law concluding that there was an error in justice on the part of the respondent when it entered into the deed of settlement when such an issue could only be disposed of in proceedings seeking to set aside the deed."

Mr Siyakurima urged the court to consider his grounds of appeal and reverse the High Court decision in favour of his client. Rio Zim declined to honour its obligation on the loans following the findings of the Interest Research Bureau (IRB) — an independent and privately-owned firm that helps companies to re-compute borrowed loans — to audit the debt due to AfrAsia Bank (formerly Kingdom).

IRB made findings that the mining giant was overcharged. High Court judge Justice Lavender Makoni nullified the deed of settlement entered between the parties' bank and the gold miner. She ruled that RioZim was not aware at the time the company concluded the deed that it had been overcharged on interest.

The matter only spilled into the courts after AfrAsia sought to enforce payment of the contract.

The court heard that in 2012 after RioZim refused to honour its obligation citing unjust enrichment on the part of AfrAsia, the latter subsequently instituted a $8,6 million (plus interest) claim against the resources firm, which was strenuously resisted. The two parties then agreed to enter into a deed of settlement in August 2013 through which RioZim agreed to pay $4,6 million through instalments.

After appointment of a new board of directors, the mining giant then engaged IRB in a quest to independently verify the amount. The IRB report showed that AfrAsia had overcharged the mining firm on both interest and bank charges.

RioZim then stopped making payments to the bank against the terms of the deed.
- the herald
Tags: AfrAsia, RioZim,


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