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The High Court has granted an order staying the execution of a ruling compelling Premier Diamonds to settle a $4,6 million loan advanced by BancABC

Martin Kadzere and Fidelis Munyoro
LOCAL firm, Premier Diamonds got a reprieve last week after the High Court granted an order staying the execution of an order compelling it to settle a $4,6 million loan advanced by BancABC to finance its diamond deals. Early this month, BancABC, secured a High Court order to recover the outstanding funds and three properties in Harare which Premier had pledged as security against the loan.

The default judgment was granted by Justice Chinembiri Bunhu on April 1 this year after lawyers representing Premier Diamonds failed to show up at the court to defend the claim. Premier Diamonds immediately made an urgent application, seeking a stay of execution on the basis that there is a pending application for recession of the judgment. Through its lawyer Mr Jonathan Samukange of Venturas and Samukange law firm, Premier on Thursday approached the High Court seeking an order to stay the execution of the judgment granted against the diamond firm.

Justice November Mtshiya heard the urgent application sitting in his chambers and granted a stay of execution after Mr Samukange clarified his absence in court when the judgment was issued against his client. Mr Samukange confirmed that the relief, which his client sought. “We went to court seeking  an order that the default judgment granted under case No HC8991/ 2013 on 01 April 2014 be set aside pending the filing of an application for rescission of judgment,” he said.

BancABC is represented by Chambati and Mataka Attorneys. According to court papers, BancABC advanced $10 million loan to Premier Diamonds in the form of a one year loan facility, which attracted an interest’s at 38 percent per annum. In the event that Premier defaulted, the outstanding money would be transferred to a default account which would attract interest at the rate of 58 percent per year. Premier, through several companies and individuals, who have also been cited as defendants signed written unlimited guarantees for the loan. The diamond firm also pledged $7 million, held in cash security account by the BacnABC in favour of the bank as further security.

Premier Diamonds breached the facility agreement after failing to repay the loan including interests. Of the $10 million, BancABC has recovered $7 million by offsetting the cash pledge.

To date the amount due is $4,6 million broken down as $3 million capital and $1,6 million interests. The interest on $1,6 million was calculated at an annual rate of 38 percent.