BRITISH investor Boustead Beef, has lost a High Court bid to get 420 head of cattle or US$193 000 from Triangle Limited as compensation for leasing properties belonging to the Cold Storage Commission (CSC) in Mwenezi.
In its application to the High Court Commercial Division, Boustead cited Triangle Limited as the respondent.
According to court papers, Boustead claimed delivery of 420 head of cattle or equivalent in the sum of US$193,660 being the value of the cattle.
In 2014, Triangle signed a 10-year lease agreement with the CSC to rent its Chivumburu Ranch located in Masvingo’s Mwenezi district.
Triangle wanted its cattle to graze at the ranch, and rentals were to be paid annually in the form of a certain number of cattle based on a formula fixed in the lease agreement.
In January 2019, Boustead took over the CSC as a going concern under an agreement with the government represented by the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement.
The agreement was titled the “Livestock Joint Farming Concession Agreement” or JLCA.
Clause 7 of the JLCA included arrangements for extant lease agreements between the CSC and various tenants.
- Cross: Why I wrote Mnangagwa book
- Cross: Why I wrote Mnangagwa book
- British investor bid to seize 450 cattle flops
Keep Reading
Empowered by the JLCA, Boustead approached Triangle on September 9, 2020, as the new lessor to Chivumburu Ranch.
Boustead later made a number of demands to Triangle including payment of annual rentals.
Triangle, however, did not accept the status of Boustead as lessor.
On December 13, 2020 CSC was placed under corporate rescue with Ngoni Kudenga appointed the corporate rescue practitioner.
Kudenga was replaced by Vonani Majoko, a legal practitioner.
Majoko was later involved in consultations between Boustead and Triangle to resolve the dispute as to who, between Boustead and the CSC`s corporate rescue practitioner, was the rightful lessor.
The dispute remained unresolved and the rentals were unpaid.
Boustead then instituted the present legal proceedings against Triangle.
High Court judge Justice Joseph Chilimbe was called to determine six issues that were raised on whether Boustead had locus standi and whether the LJFCA is valid and binding.
Boustead argued that it was entitled to receive the rentals, but Triangle argued otherwise, noting that the dispute between the parties was subject to an arbitration agreement.
Justice Chilimbe, however, ruled against Boustead.
Chimimbe said Boustead had acknowledged that it did not assume the corporate status and identity of the CSC under the JLCA.
"Whilst it placed the management and control of the CSC into Boustead, the agreement did not substitute the CSC with Boustead,” read the ruling.
"Noteworthy too, is the fact that the CSC was not a party to the JLCA.
“It is clear that the ministry, as the shareholder`s representative, formed a joint venture which involved the surrender of assets and operations of the CSC as a corporate entity.
“But the agreement leaves many questions unanswered on the legal framework of the joint venture concerned.”
The judge said the rights accruing to the CSC under the lease agreement would not, on the facts, devolve to Boustead.
"Boustead cannot claim to enjoy rights under an assignment because Triangle did not assent to such,” he said.
"On the basis of the aforegoing, it is my conclusion that Boustead`s claim is unsustainable.”
In August, the government terminated the US$130 million joint venture (JV) agreement with Boustead.
The 25-year agreement gave Boustead control over CSC’s ranches, meat processing facilities, distribution centres, and residential properties in Harare, Gweru, and Mutare, with the promise to invest about US$130 million to rebuild the firm.
Of this, US$45 million was supposed to be invested in the first year, along with an annual rental payment of US$100 000 during the initial five years.
