$8m lawsuit for Hwange Colliery

$8m lawsuit for Hwange Colliery Hwange Colliery is seeking a loan of $7,5 million to ramp up production

Daniel Nemukuyu Senior Court Reporter
Hwange Colliery Company Limited’s woes have mounted with a United Kingdom-based engineering firm slapping the local mining concern with an $8,6 million lawsuit over unpaid debts.

Otto Simon Limited, a company registered under the British laws, carried out some repairs and refurbishment at Hwange’s coke plant but the local mining company did not pay for the expert work done.

Through its lawyer, Mr Vusani Bangidza of Tavenhave and Machingauta Legal Practitioners, Otto Simon is claiming $8 636 393 plus interest calculated at the rate of 5 percent per annum from the date of issuance of summons to the date of payment of the debt.

According to the plaintiff’s declaration, Otto Simon in 2010 carried out an inspection at Hwange Colliery’s coke plant and it was found to be in poor condition.

The two companies’ representatives met and developed a strategy for the progressive stabilisation, repair and eventual through wall rebuild of the coke oven battery along with various recommendations for the necessary repairs and replacements required to the machines and by-products plant.

An agreement was signed by both parties, resulting in all the work being done by the foreign company at an agreed cost.

The parties signed several contracts including the “services contract”, in which Otto Simon would bring coke oven specialists for the refurbishment and repair of the plant.

They also signed the “rolling rebuild contract” that was aimed at the rebuilding of the coke oven battery.

Hwange and Otto Simon also signed another contract dubbed “six wall contract” that would see the foreign firm supplying material and equipment needed for the wall repair.

On all the contracts signed by the two companies, Hwange Colliery failed to meet its financial and other obligations.

“The defendant has not only defaulted on its financial obligations but it has defaulted on its material obligations.

“Those obligations include the supply of labour, site equipment, services and carrying out supplementary work on replacement and refurbishment of associated areas of the coke plant.

“In fact, the defendant’s contractual obligation to provide a crane on site for the duration of the rolling rebuild contract have led to significant problems with the erection of mechanical equipment, which impacted on the programmes,” the foreign company argued.

Hwange Colliery is yet to respond to the summons.

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