The Agricultural Development and Marketing Corporation (Admarc) has not yet made an official communication to the Grain Millers Association (GMA) of Zimbabwe about the cancellation of the $22 million maize export deal they entered into in May 2022.
GMA Corporate Affairs Manager Andrew Kunambura disclosed this in an interview on Monday.
Board Chairperson for Admarc Alexander Kusamba Dzonzi also confirmed the development in a separate interview, saying they are in a legal dilemma and are consulting on how to go about it.
“We have no communication yet…and we have no comment about that at the moment. We will advise as, and when, need arises,” Kunambura said.
Dzonzi said, on his part, that the cancellation has, to an extent, affected other contracts they had with other Kenyan and Malawian firms.
“We are consulting on how to deal with the legal exposure Admarc is finding itself in following the maize selling suspension because we have other contracts with a Kenyan and Malawian firms. Our duty is to bring to their attention the ramifications of the suspension of sales on the existing contracts where payments have already been made,” he said.
But a copy of the contract between the two-grain traders, which we have seen, states that the deal may not be terminated prematurely by any of the parties unless either of them commits a serious breach of the terms of the contract or undergoes liquidation.
The terms of the contract, which would run up to July 31 2023, however, do not place clear liability on a party that terminates the agreement before time.
Some stakeholders have faulted the procedures that were followed in the signing of the contract, arguing the contract was signed prematurely.
The board was also accused of not involving management when negotiating the deal, which saw Dzonzi and his GMA counterpart Tafadzwa Musara co-signing the contract on behalf of their institutions.
But Attorney General Thabo Chakaka Nyirenda said Tuesday that the board did not breach any law in signing the agreement.
“The board is entrusted with management of the company and delegates that role to employees. Such huge transaction ought to be concluded by the board. Mind you, we are a country governed by laws and not emotions or assumptions. There is no statutory or common law breach that the board has committed here,” he said.
The deal, which would have seen the State-owned grain trader exporting up to 100,000 metric tonnes of maize to Zimbabwe, was suspended two weeks ago on recommendations from the Parliamentary Committee on Food and Agriculture.