The High Court has lifted the corporate-rescue moratorium protecting OK Zimbabwe Limited, allowing landlord Savvas Investments (Private) Limited to continue ev...
The High Court has lifted the corporate-rescue moratorium protecting OK Zimbabwe Limited, allowing landlord Savvas Investments (Private) Limited to continue eviction proceedings over a commercial property in Mount Pleasant.
Justice Lucy Mungwari ruled that Savvas had shown sufficient grounds for its case against the financially distressed retailer to proceed despite the statutory moratorium that generally freezes legal proceedings against companies under corporate rescue.
The ruling does not mean that OK Zimbabwe has been ordered to vacate the property. The main dispute, including whether the lease was validly cancelled, whether eviction should be granted and whether damages are payable, will still be determined in the substantive proceedings.
The dispute concerns commercial premises at 48 Bond Street, Mount Pleasant, which Savvas leased to OK Zimbabwe in December 2024. Savvas alleges that the retailer repeatedly breached the lease by failing to pay rent and other charges on time and by failing to properly maintain the premises.
According to Savvas, it cancelled the lease on December 12 last year and demanded that OK Zimbabwe vacate the property. The retailer remained in occupation, leading Savvas to issue summons on February 17 this year seeking confirmation of the cancellation, eviction, holding-over damages and payment of municipal rates.
Seven days later, on February 24, OK Zimbabwe entered voluntary corporate rescue. The move triggered the statutory moratorium, requiring Savvas to obtain leave from the court before its pending legal action could continue.
OK Zimbabwe opposed the application, arguing that allowing the case to proceed would undermine the corporate-rescue process and prejudice thousands of creditors, employees and other stakeholders. The retailer also disputed the allegations made by Savvas and challenged the legality of the lease cancellation.
Mungwari J, however, found that the circumstances justified lifting the moratorium. “Corporate rescue cannot be converted into a substantive extension of a contested lease,” the judge said.
A significant consideration was the uncertainty over how long OK Zimbabwe’s corporate-rescue process would continue. The retailer had previously indicated that it expected to emerge from corporate rescue by July 31, but that deadline passed without the company exiting the process.
When the matter was argued, OK Zimbabwe could not provide the court with a new date for its expected exit from corporate rescue. Its counsel ultimately accepted that the duration of the process was unknown.
The judge found that Savvas was continuing to suffer prejudice while its case remained frozen. “The prejudice to the applicant is immediate, continuing and capable of increasing,” Mungwari J said.
Savvas alleged that arrear rentals, holding-over damages, municipal charges and electricity liabilities continued to accumulate while OK Zimbabwe remained in occupation. The landlord also alleged that the property had deteriorated and that it had incurred repair costs.
The court did not determine whether those allegations were proven. OK Zimbabwe disputed the claims and challenged the legality of the lease cancellation, leaving those issues for determination in the main proceedings.
Mungwari J said the issue before the court was not whether Savvas had already succeeded in its eviction claim, but whether the interests of justice justified allowing the existing case to continue.
The fact that Savvas had issued its summons before OK Zimbabwe entered corporate rescue was also significant. The landlord was seeking permission to continue an existing dispute rather than beginning fresh proceedings against a company already protected by the moratorium.
The judge further found that Savvas’ position differed from that of an ordinary creditor seeking payment of a debt. The landlord was asserting rights over its property, which it alleged was being occupied after the cancellation of the lease.
OK Zimbabwe argued that its rescue plan addressed the disputed premises. However, the company did not produce the plan or demonstrate that the property was indispensable to its restructuring programme. Mungwari J found that the retailer had not shown that allowing the litigation to continue would necessarily destroy the rescue process.
“The respondent has not sufficiently demonstrated that continuation of the already pending proceedings will fatally disrupt its rescue plan,” the judge said.
The court also rejected concerns that granting Savvas leave would automatically open the floodgates to other creditors. Mungwari J said each applicant would still have to satisfy the requirements of section 126 of the Insolvency Act.
Savvas had sought punitive attorney-and-client costs, arguing that the matter had been delayed amid assurances that OK Zimbabwe would leave corporate rescue by July. The court declined the request.
Mungwari J found that OK Zimbabwe was entitled to defend the corporate-rescue process and contest the alleged cancellation of the lease. The company’s opposition had not been shown to be dishonest, vexatious or an abuse of court process.
OK Zimbabwe was therefore ordered to pay costs on the ordinary scale, while the court granted Savvas leave to continue with case HCHC 110/26.
The substantive dispute will now return to the main case, where the court will determine whether the lease was validly cancelled, whether OK Zimbabwe has a right to remain at the Mount Pleasant property and whether Savvas is entitled to eviction and damages.
