Credcorp Ordered To Pay Seed Co $1.1 Million For Breach Of Contract
The High Court has ordered Credcorp, a local company in Zimbabwe to pay Seed Co Limited US$1.1 million after Credcorp failed to fulfil a seed production contract.
Seed Co is a Zimbabwean company that supports seed crop production by providing sponsorships to growers. They supply farmers with parent seeds and cover the production costs associated with growing new seed crops. The farmers cultivate the seed crops according to specified practices, and after harvest and processing, they deliver the seed-produced to Seed Co.
The value of the newly produced seed is determined through negotiation, The Herald reported. Seed Co deducts the initial production costs and the cost of the parent seed provided, and the remaining profit is shared with the grower.
The Case
Seed Co took legal action against Credcorp after the latter breached their agreement for seed production in the 2018/19 season. Credcorp failed to deliver the contracted seed crops of soya bean, sugar bean, and sorghum from its four farms. Instead, Credcorp sold a significant portion of the seed to third parties, which is known as “side marketing.”
Seed Co alleged that at a meeting between the parties, it was agreed that Credcorp would trace the side-marketed seed and repay the production costs plus the cost of some equipment. However, Credcorp denied these claims and argued that a settlement agreement had been reached, which Seed Co allegedly did not fulfil.
The High Court ruled in favour of Seed Co, stating that Credcorp did not provide sufficient evidence to support its claims. Justice Joseph Mafusire ordered Credcorp to pay Seed Co US$1,014,483 with interest, as well as cover the costs of the lawsuit.
