Liquidators of South African company Petter Trading are involved in a legal battle with Schweppes Zimbabwe Limited concerning the rights over the assets the company bought before it was placed under reconstruction. The dispute between the two companies involves ownership of injection moulding equipment, blow moulding machine and bottling equipment.
Petter Trading was a South Africa incorporated company whose role in the project was pursuant to an agreement it concluded with Africa Resources Limited – the parent company registered in the British Virgin Islands.
In 2003, Fidelity Life Asset Management entered into an agreement with Coca-Cola Central Africa and Schweppes Zimbabwe Limited by terms of which it would purchase SZL for a price of US$1 on top of a 100 per cent equity ownership price. This upgrade was to meet international standards. Since FLAM had no access to hard currency it approached ARL which then instructed Petter Trading to procure the equipment.
It is the contention of Petter Trading that the letter claiming that FLAM was in default was written after the reconstruction laws had taken effect, and they were just hiding behind the letter to seize equipment. It was submitted that Coca-Cola Central Africa’s rights to recover the shares in SZL from FLAM arose not from the implementation of the reconstruction laws but rather from the breach of the agreement.
In papers filed before the court, SZL argued that Peter Trading had no legal right to bring the case as SZL had entered into the agreement with Fidelity Life Asset Management, which had the obligation to procure the equipment, according to their agreement.