Former president Robert Mugabe company’s Gushungo Holdings (Private) Limited has turned the tables against a potato producing company that supplied it with seed on credit in 2015, accusing the firm of breaching a verbal contract entered between the two parties.
This comes after Seed Potato Co-op (Private) Limited approached the High Court demanding over $174 000 for potato seed supplied to Mugabe’s company.
However, in its papers filed last Friday, Mugabe’s company claimed that the potato seed that was delivered was substandard and defective and resulted in the company incurring losses instead of profits.
“Defendant (Seed Potato Co-op Private Limited) breached the agreement in that it delivered seeds which were substandard quality, defective and not as per the agreed standard. The defendant further breached the contract by delivering locally obtained seeds instead of imported seeds as per its undertaking. The defendant further charged the plaintiff the price for imported potato seed and yet it had delivered locally obtained seeds,” Gushungo Holdings said.
The company owned by the former first family, also said that the seed firm failed to produce any documentation for certification and approval of the seeds, in breach of the contract.
“As a result of the breach, the seeds supplied did not produce the expected harvest and consequently plaintiff suffered huge losses. When the agreement was concluded, the parties were aware of the following: that plaintiff was farming potatoes as a business, that is to make profits out of the farming, should the seeds be not of quality, the plaintiff would suffer a loss from the potato farming venture,” Mugabe’s firm said.
The company said it planted the potato seeds with all the necessary requirements.
“It had the red soils which is the best for potato farming and all the necessary inputs and machinery. Plaintiff employed qualified and experienced workmen and expertise for the potato farming.
“After harvesting the crop, the plaintiff realised that it had suffered losses instead of getting profits. The potato seed failed to yield even the expected minimum yield. The defendant supplied the plaintiff with a total of 6 262 bags of potato seed. The seeds were planted on a 52,5 hectares piece of land,” the court heard.
According to Gushungo Holdings, a minimum of 70 tonnes per hectare was expected, translating to 3 675 tonnes for the 52,5 hectares, with an expected outcome value of $428 385.
“However, plaintiff harvested 314, 55 tonnes and realised only $114 344, 71. The total cost for farming the potato seed including the costs for buying potato seed amounted to the sum of $398 489, 91. As a result, plaintiff suffered losses in the total sum of $284 145, 20.
“Plaintiff’s loss is calculated by the difference between the revenue acquired from the potatoes harvested and the production costs incurred,” the court was told.
The potato seed company is still to respond to the application, which is still pending before the High Court.
In the main application, the seed company told the court that it had delivered seeds at several farms, listed as Mwenewazvo, Gushungo Dairy, Highfield, Vusumuzi, Kaseplan and Iron Mask.
“In July 2015, the parties entered into a verbal agreement in terms of which plaintiff (in the main application) (Seed Potato Co-op (Private) Limited) was to supply to defendant (Gushungo Holdings (Private) Limited), stock of potato seed on credit at a unit cost of $30 per pocket.
“Between 21 July 2015 and 24 September 2015, plaintiff duly supplied via 11 deliveries to defendant’s various farms, a total of 12 761 pockets of potato seed worth a total value of $382 830…,” the court heard.
The seed company claims Gushungo Holdings owes $174 193, an amount which excludes interest.
“Despite several demands, defendant has neglected, failed and/or refused to pay plaintiff the sum of its indebtedness,” the seed company said.