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Daniel Nemukuyu Senior Court Reporter
First Oil Company (Private) Limited, which lost $2,3 million in an unsanctioned money transfer by ZB Bank Limited, is now suing the bank for damages to the tune of $28 million.

The oil firm held an account with ZB Bank and the two parties agreed that the bank would transfer funds on instructions for the purchase of fuel.

However, First Oil accuses the bank of effecting a transfer to Micro Petroleum Global when no delivery had been made resulting in the company losing $2 360 000. As a result of the actions of the bank, First Oil failed to supply millions of litres of diesel to CMED Private Limited.

In summons filed at the High Court by Kachere and Guwuriro law firm on June 9 this year, ZB Bank Limited was cited as the sole defendant.

The company now claims the $2 360 000 as well as damages amounting to $28 million with interest.

According to the papers, First Oil and ZB Bank orally entered into an agreement where the bank would provide international banking services to the plaintiff including exchange control and advisory services. In terms of the agreement, the bank would honour any mandate by the oil company for international banking payments from the current bank account on condition it had sufficient funds. The bank would also provide a duty of care to the oil firm and advisory services on any international banking payments to be made from the current account.

At all times, First Oil claims, the current account had sufficient funds to meet any international banking payments to any third party. On March 1 2013, First Oil requested an international banking payment to Micro Petroleum Global in Hong Kong in the sum of $2 360 000 for the purchase of diesel. First Oil argued that it agreed with the bank’s representatives on several meetings that the money would only be released against delivery of fuel at the company’s Msasa Depot.

“Against the specific agreements of the parties with respect to the transfer of the funds as outlined in paragraph 9 hereof, the defendant bank debited the plaintiff’s account with the amount of US$2 360 000 and made payment to Micro Petroleum Global prior to confirmation of the delivery of the petroleum product at Msasa Petroleum Depot in Harare.

“Further to that and in breach of the duty of mandate, the defendant bank only debited the plaintiff account on the 7th March 2013 and not the 1st march 2013,” reads the plaintiff’s declaration.

First Oil argued that the bank had no right to debit the bank account in the manner it did. ZB Bank is yet to respond to the summons.