Yapi Merkezi Insaat Ve Sanayi A.S. and Anor v Zambia Railways Limited and Anor (2024/HPC/0230) [2025] ZMHC 13 (14 March 2025)

IN THE HIGH COURT FOR ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: 2024/HPC/0230 1 4 MA. R 2025 YAPI MERKEZI INSAAT VE SANAYI A. S. YAPIRAY DEMIRYOLU INSAAT SISTERMLERI SANAYI TICARET A. S. . ~F·lRST PLAINTIFF SECOND PLAINTIFF AND ZAMBIA RAILWAYS LIMITED INDUSTRIAL DEVELOPMENT CORPORATION LIMITED SECOND DEFENDANT FIRST DEFENDANT Before the Honourable Mr Justice K. Chenda on 14th March 2025 For the Plaintiffs For the First Defendant : Mr Z. Musonda and Mr M. Mwiba, In House Counsel. For the Second Defendant: Mr G. Kalandanya, Mr F. Tembo and Ms Y. Daka of_GM Legal Practitioners : Mr M. Ndalameta and Ms. H. Chileshe of MAY & Co. JUDGMENT Primary Legislation (1) (2) The Public Procurement Act, No. 8 of 2020 The High Court Act, Cap. 27 Rules of Court (1) The High Court Rules, under Cap. 27 Case Law ( 1) (2) (3) (4) Finance Bank Zambia Ltd. & Anr. v Simataa Simataa -Selected Judgment No. 21 of 2017 at p. J22-23 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Limited ( 1942) 2 All ER 122 at page 135] Konkola Copper Mines Plc v Mitchell Drilling Intematior:,,al Limited and Anr. (2015) 2 ZR 203 at p.221 Cavmont Capital Holdings Plc. v Lewis Nathan Advocates - SCZ Judgment No. 6 of 2016 at p. J35-36 (5) (6) (7) (8) (9) Zambia Oxygen Limited and ZPA v Paul Chisakula and Others (2000) ZR 27 at p30 Galaunia Farms Limited v National Milling Company Limited (2004) ZRl at pages 9-10 Friday Mwamba v Sylvester Nthenge & 2 Ors - SCZ Judgment No. 5 of 2013 (Appeal No. 174/2010) at p. J19 Base Chemicals Z. Ltd. v ZAF & AG (2011) 2ZR 34 The Rating Valuation Consortium & DW Zyambo & Assoc. v LCC & Anr. (2004) ZR 109 (10) Afrope Zambia Limited v Anthony Chate & Ors - Appeal No. 160/2013 at p . Jl6. INTRODUCTION 1.1 The need for robust infrastructure is indispensible for economic development of any country and for ultimately improving the quality of life for its inhabitants. 1.2 This is also reflected in the United Nations Sustainable Development Goals ("SDGs"), particularly SDG 9 whose target 9 .1 is couched as follows - "Develop quality, reliable, sustainable and resilient infrastructure, transborder to support economic development and infrastructure, human well-being, with a focus on affordable and equitable access for all." (Emphasis added) including regional and 1.3 Zambia is a member of the United Nations, making SDG 9 an imperative. The country is also land linked and it is no wonder that infrastructure development necessarily includes railways for bulk transportation and other purposeful use. J2 1.4 The dispute before Court emanates from an initiative by the Zambian government to develop its railways and it is a fall-out with the contractors that resulted in these proceedings. BACKGROUND AND MATERIAL FACTS 2 .1 The Plaintiffs were part of a consortium called Team Sweden Railway ·, ("TSR consortium") contracted to rehabilitate the railway infrastructure in Zambia. 2.2 The First Defendant is a state-owned enterprise responsible for the railway infrastructure in Zambia. 2.3 The Second Defendant is also a state-owned enterprise and overseer of inter alia industrialisation and related investments by the Zambian Government. 2.4 Following difference over contractual payments, and value added tax ("VAT") the Plaintiffs took out this action by writ of summons and statement of claim filed 28 th March 2024, seeking: (i) damages for breach of contract by the Defendants; (ii) an order for immediate payment of €4,956,323.89 by the Defendants as outstanding from interim payment certificates (!PCs) issued under phase 1 of the contract; (iii) an order that the Defendants are liable to · pay the Plaintiffs €1,433, 797.57 pursuant to interim payment certificate 6; (iv) an order that the Defendants are liable to indemnify the Plaintiffs for penalties that have become due on unpaid VAT as a result of non-payment by the Defendants; J3 (v) interest charged at 3% above the discount rate of the Euro determined by the Bank of Zambia calculated from the due date to date of payment in accordance with Claust:! 14.8 of the Contract; (vi) an order that the Defendants are required to specifically perform the contract; (vii) costs of and incidental to this action; and (viii) any other relief the Court may deem fit. 2.5 The First Defendant reacted with a defence filed on 22 nd April 2024, refuting the extent of work alleged by the Plaintiffs to have been done, contesting their treatment of VAT and ultimately .disputing their right to relief. 2.6 By amended defence and counterclaim filed 13 th August 2024, the Second Defendant aligned itself with the First Defendant's defence. 2. 7 The Second Defendant also alleged that the Plaintiffs were over paid for the extent of work actually done . The· -se·cond Defendant complained t hat it had paid one of the members of TSR consortium USD3,600,000 in 2014 for equipment which has never been supplied. 2 .8 The Second Defendant took the additional view that performance of the contract was impossible as a condition preceden t of provision of a sovereign guarantee could not be met. 2 .9 The Second Defendant thus counterclaimed for: J4 (i) an order repudiating the contract entered into between TSR consortium represented by the Plaintiffs, itself and the First Defendant due to it being impractical to perform and that fundamental terms of the contract as tcr ·"the· Government guarantee and performance security have not been fulfilled by either party; (ii) an order for repayment of the sum of USD3,600 ,000 owed to the Second Defendant being the money paid to Bombardier under the same project; (iii) an order for repayment of €6,742 ,354.29 or the value of the overpayment to be assessed by the Court; (iv) damages for breach of contract, (v) costs; and (vi) any other relief the Court may deem fit. 2 .10 In their general reply of 3 rd July 2024, the Plaintiffs took issue with the First Defendant's defence. The pleadings then closed on 27th August 2024 with the Plaintiffs' amended reply to the Second Defendant's defence and counterclaim. Therein the •·Plaintiffs averred that they and the Second Defendant were not privy to the contract under which USD 3,600,000 was paid, also that the payee was not part of TSR consortium. 2.11 The Plaintiffs also refuted the claim of over payment and asserted that payments were made on interim payment .certificates (IPCs) duly approved by the First Defendant and verified by the Second Defendant. Additionally, the Plaintiffs also disputed that the contract had become impossible to perform. JS CASE MANAGEMENT AND ISSUES 3.1 After close of pleadings, a scheduling conference_ .. ~was held and the characterist!c Bar-Bench consultation yielded fruit in form of streamlining the case into core issues for interrogation . 3.2 They were embodied in the order for directions of 6th September 2024 2024 as follows - (i) who were the parties to the contract pleaded in -paras. 8 and 9 of the statement of claim (the "contract"); (ii) what percentage of the works under the contract did the Plaintiffs complete; (iii) does the First Defendant have any lawful cause for not honouring the amount of €4,956,323.89 or any component thereof; (iv) does the First Defendant have any lawfu,1: cause for not honouring the amount of €1,433,797.50 or any component thereof- ·, ' (v) have the Plaintiffs (or either of them) suffered any consequential loss from non-payment of the aforementioned sums (or any part lawfully due) for which loss the Defendants (or either of them) ought to atone; (vi) are the Plaintiffs and/ or Second Defendant p;t~J to the contract under which the Second Defendant paid USD3 ,600,000 as pleaded in para. 5 of the Second Defendant's amended defence and counterclaim and/ or ottierwise entitled to the rights or subject to any liability thereunder; J6 (vii) if issue 6 is determined in the affirmative, whether a claim based • ., .... t ., .... on the relevant contract is statute barred; (viii)was the total sum of €6,742,354.29 alleged to have been overpaid to the Plaintiffs approved by the First Defendant and verified by the Second Defendant based on interim payment certificates; (ix) did performance of the contract become impossible through no fault of the Defendants or either of them; and (x) in the circumstances, are the Plaintiffs (or either of them) entitled •. to relief against the Defendants (or either of them) and/ or is the Second Defendant entitled to relief against the Plaintiffs (or either of them). 3.3 After fulfillment of the preparatory directions, the matter was set down for trial. ...,. TRIAL AND SUMMARY OF EVIDENCE 4.1 Trial began on 11 th February 2025 and concluded on 12th February 2025. Commendably so because it was issue based and without unnecessary objections from the Bar, a practic::e, .that regrettably delays progress in many trials before our Courts. 4.2 The catalogue of witnesses was as follows: 4.2.1 1 witness for both Plaintiffs namely Mr. Serdar Erdinc Gedik (PW); J7 4.2 .2 3 Witnesses for the First Defendant namely Mr. Kennedy Zitha (DWI), Mrs Maureen Mwamba Mumba (DW2) and Mr. Chishimba Mutale (DW3); and 4 .2.3 1 witness for the Second Defendant namely Mr. Saviour Nyangu (DW4). 4.3 As for bundles of documents adduced, the parties commendably compiled and filed an agreed bundle of documents on 7th October 2024, in two volumes. The Plaintiffs later filed a supplementary bundle of documents on 11th February 2025, by consent order of even date. 4.4 Mention must also be made that the bundle of plea,.~ings filed by the Plaintiffs on 7th October 2024 was also utilised at trial. 4.5 A summary of the testimonies at trial is as follows, beginning with the Plain tiffs. 4.6 Mr. Gedik testified that he was a civil engineer and country representative of the Plaintiffs in Zambia. His testim ony in chief was based on his witness statement filed 21st October 2024 as well as on the agreed bundle and supplementary bundle. JS ..!,..,,;.·._ 4.7 In his testimony in chief, Mr. Gedik stated that the First Plaintiff was a Turkish company involved in heavy construction in Zambia and other countries, while the second Plaintiff, also Turkish, was a supplier of prefabricated concrete products for rehabilitation of railways. ' _ .. - 4.8 It was his testimony that in 2017, the Zambian government invited bids for rehabilitating the Chingola-Livingstone railway. Initially, a consortium TSR was formed, led by Bombardier Sweden and including the Second Plaintiff and PT Inka. Over time, the consortium's composition changed, and by December 2020, it consisted solely of the two Plaintiffs. This change was formally approved by the Second Defendant in a letter dated 21st December 2020 appearing at p.1 of the Plaintiffs' supplementary bundle. The Plaintiffs submitted a revised bid, which was successful. 4.9 He stated that on March 5, 2021, an Engineering, Procurement, and Construction contract for the rehabilitation and modernisation of the First Defendant worth EUR 978,093,639 (excluding VAT) was executed between the Plaintiffs and Defendants. Clause 4 of the Contract at p.3 of the agreed bundle outlined the following documents as constituting the Contract: (i) particular Conditions and Appendix to Tender; J9 (ii) (iii) (iv) (v) the General Conditions; the Employer's Requirements; the Preliminary Schedules; and the Contractor's Proposal. 4.10 It was his testimony that the Plaintiffs began work and provided a performance security guarantee through their parent company, Yapi Merkezi Holding A. S as evidenced by documents at p.344-366. 4.11 Mr Gedik stated that by March 2021, the Plaintiffs had completed 92.3% of Phase 1. He stated that the contract required the First Defendant to certify payments through Interim Payment Certificates (IPC), which the Defendants were obligated to set~le within 56 days. The First Defendant issued five IPCs approving amounts due, but the payments were either delayed or incomplete and the Plaintiffs are still owed EUR 4,956,323.89. Further that the Plaintiffs incurred VAT liabilities due to non-payment by the Defendants. 4.12 As for the counterclaim, Mr Gedik observed that the First Defendant claims a debt of USD3.6 million against the Plaintiffs, citing a 2014 contract involving Bombardier Denmark, Huawei International Pte Limited and GMC Technologies Zambia Limited. Mr Gedik stated that the Plaintiffs were not part of that agreement and should not be held liable. JlO 4.13 Mr Gedik also testified that the First Defendant rejected a portion (€906,257.17) of the Plaintiffs' IPC 6 claim, stating a lack of funds, which he dismissed as not a valid excuse for non-payment. 4.14 In conclusion he stated that the Defendants' failure to pay has caused significant financial strain on the Plaintiffs and the Plaintiffs seek full payment of EUR 4,956,323 .89 plus the disputed amount of EUR 1,433,797.57 for IPC 6 . They also reject the counterclaim of USD 3.6 million, stating it is unrelated to their contract. 4.15 Mr. Gedik was cross examined firstly by Mr, M.:'Niba for the First Defendant during which he testified that the contract was EPC and financing for rehabilitation and modernisation of the First Defendant. Further that it was signed on 5th March 2021 . 4.16 When referred to the recital of the contract at p.3 of the agreed bundle, Mr. Gedik testified that the Plaintiffs per~qr.p:1.ed their part of the financing obligation such as by providing a letter of intent from Citibank London while the rest of the obligation was for the sovereign not the Plaintiffs as contractors. 4.17 Mr. Gedik testified that appointment of an engineer was a fundamental term of the contract but that to his k~~,wledge none was appointed. The engineer's role would be to evaluate performance. Jll 4.18 He agreed that the contract required the Plaintiffs to remedy defects in works before payment could be made and that as far as he was aware the Plaintiffs remedied defects communicated to them by this employer. 4.19 He however conceded that there were no specific documents before Court to prove the remedial works but that it could be inferred from the invoices which show that the Plaintiffs worked according to the instructions of both Defendants. 4.20 Mr. Gedik testified that the Plaintiffs charged VAT as advised by ZRA in a letter and that there was no double taxation. 4.21 Under continued cross examination this time by Mr. Musonda, for the First Defendant, Mr. Gedik admitted that the Parties to the contract appear at p.2 of the agreed bundle. He also testified that during the bid process, Bombardier Transportation of Sweden was the lender. , 4.22 When shown the letter in the Plaintiffs' supplementary bundle, Mr. Gedik testified that it related to changing the composition of TSR consortium and that the actual changes were in the letter of 11th December 2020 referenced therein. Jl2 4.23 When the cross examination progressed to the camp for the Second Defendant, Mr. Gedik proved to be a very uncredible witness . He was extremely evasive, wavery in his answers and app eared to want to advance his own narrative in avoidance of questions that required short answers of him, opting instead for extended pauses before offering unsolicited explanations seemingly at cross purposes with the short answer questions put to him. 4 .24 The first round of cross examination for the Secg~d Defendant was by Mr. Kalandanya during which Mr. Gedik testified that the Plaintiffs understood that they were contracting with the Defendants for EPC and financing also that the financing was as important as the EPC. He testified that there was no signed financing agreement obtained by the Plaintiffs but that they got a letter from Citibank London and provided it to the Minister of Finance, Minister of Transport and to a Special Adviser to the President. 4 .25 He conceded that in the absence of external financing, even the advance payment came from the Second Defendant not from any of the Plaintiffs' sources. J13 4.26 He evaded the question that if the Plaintiffs had performed their obligation the advance would have been from sources arranged by them and answered instead that all financing was provided for in the contract and the Second Defendant was required to pay the advance payment and be compensated in phase 2. 4.27 Mr. Gedik testified that the amount of EUR 487,188.92 which the :Plaintiffs seek as outstanding on the advance payment is the VAT component. He was not sure whether the invoice for the advance payment was before Court. 4.28 It was his testimony that 90% of the advance payment has been credited to the Defendants in subsequent invoices and approximately EUR 300,000 is remaining as unapportioned since the Plaintiffs have not done works to which it can be applied as a credit to the Defendants. 4.29 He testified that all the advance payment components factored in the subsequent invoices already had VAT applied such that the advance payment as a stand-alone should not have VAT added to it. Jl4 4.30 Under continued cross examination for the Second Defendant this time by Mr. Tembo, Mr. Gedik testified that the Plaintiffs have had EPC and financing contracts in other countries and from the way it works , financing is secured somewhere and given to the entity receiving the service from the contractor. 4.31 He agreed that the EPC and financing contract with the Defendants should have also operated that way but it did not··because the First Defendant i~ the one that paid the advance payment. He added that the employer had authority to elect to pay before or after financial arrangements were in place. 4 .32 Mr. Gedik agreed that Bombardier Sweden was part ofTSR as leader during some part of the bidding process. Accordin.giito the documents he has seen,. Bombardier Denmark had a prior contract with the First Defendant, did not perform it, received about USD 3.6m but part. 4 .33 He testified that the Plaintiffs were to together in a consortium and partners by virtue of their partnership agreement. He agreed that the TSR consortium with Bombardier Sweden was_ rn~ e the same way in 2018 under an agreement which expired in 2020 . Jl5 4 .34 Mr. Gedik admitted that in the letter at p.407 of _th.e agreed bundle, the Second Plaintiff was proposing that there be changes to the consortium to remove Bombardier which owed the First Defendant and to replace it with the First Plaintiff as leader. Also, that Bombardier would instead be appointed as sub contractor. He said the letter at p.407 was signed by the Defendants in acceptance of the changes. 4.35 He then testified that the issue of the USD3.6m debt was between Bombardier Denmark and First Defendant and that Bombardier Sweden was different from the former. 4.36 He agreed that the First Defendant had engaged the First Plaintiff ~-..... over Bombardier settling the USD3.6m debt but that no signed document followed. He accepted that the email at p.398 of the agreed bundle shows that the settlement agreement at p.399 between the First Defendant, Bombardier Denmark and First Plaintiff was sent over the USD3. 6 million. 4.37 Mr. Gedik testified that special condition 3 . 1 at p.111 of the agreed bundle showed that the Plaintiffs were to propose 3 possible engineers with the involvement of the Defendants who would then appoint an engineer under the contract. Jl6 4.38 It was his evidence that the Plaintiffs proposed 3 candidates and that informing the Defendants about them was the Plaintiffs discharging the requirement to involve the Defendants. The 3 listed in paragraph 2.1 .17 at p.641 of the agreed bundle were proposed by the Plaintiffs. 4 .39 Mr. Gedik testified that one of the duties of an appointed engineer would have been to ascertain the percentage of works done by the Plaintiffs. He admitted that there was no engineer eventually appointed who was certifying the Plaintiffs works. 4.40 He testified that in paragraph 29 of his witness statement he quotes the Minister of Transport as saying works were 86% complete as at 12th July 2023 while at paragraph 21 he stated that works were at 92 .3% completion when the Plaintiffs stopped on 31st July 2023. Mr . Gedik also read from the Auditor General's report at p.558 that the works were at 84% completion. When asked whether an appointed engineer could have given a more accurate assessment saying that it would depend on the qualification. 4.41 Mr. Gedik ~dmitted that documents at p.602,603,607 and 608 showed issues with the works being queried by First Defendant and less than 100% approved on ~ome items and corresponding deductions recommended for purposes of invoicing. J17 4.42 Mr. Gedik testified that the Plaintiffs attended to the queries on the works but avoided to answer if there was any proof on record. He instead said it could be inferred from the IPCs being paid in full. 4 .43 However, when queried why the recommended deductions were not reflecting in the invoices, Mr. Gedik dismissively a nswered that all invoices and payments were approved by the Defendants. 4.44 Mr. Gedik was not re-examined and on that note the Plaintiffs closed their case. 4.45 The First Defendant opened its case with the testimony of Mr. Zitha (DWI) whose evidence in chief was based on his' witness statement of 29th October 2024 and the agreed bundle of documents . His designation was director, technical services, at the First Defendant company. 4.46 Mr. Zitha stated that in 2017, the First Defendant sought to rehabilitate the Chingola-Livingstone railway line -a nd. a consortium (TSR), led by Bombardier Transportation of Sweden AB, submitted a bid which TSR was later represented by the Second Plaintiffs. · r t " ' Jl8 4.47 He stated that in March 2021, the Plaintiffs, on behalf of TSR, executed an engineering, procurement, and construction contract, including financing, for the modernization of the First Defendant valued at EUR 978,093,639 (excluding VAT) . 4.48 Mr. Zitha stated that the contract consisted of two phases: Phase 1 ,, ( which involved track assessment, and Phase 2 covering engineering, procurement, and construction. The Plaintiffs acted as contractors, while the First and Second Defendants were the employers . 4.49 It was his testimony that the employer was to appoint an engineer to certify works, however due to resource constraints, the First Defendant acted as the engineer. 4.50 Mr. Zitha testified that certified works under Phase 1 were submitted for payment, totaling EUR 9,914,490.26 but only EUR 6,742,354.29 was paid inclusive of VAT and the advance payment of EUR 3,044,930.75. 4.51 He stated that some claims remained unpaid due to inconsistencies in sleeper assessment data (EUR82,443, 128), non-compliance in a bridge structural report (EUR 128,782.15) , pending validation of mapping reports (EUR 553,139.18), and an uncertified engineer selection (EURl00,000). J19 4.52 In conclusion he stated that the First Defendant is not indebted to the Plaintiffs as claimed as the said claims were not approved by the First Defendant. 4.53 When cross examined by Mr. Ndalameta for the Piaintiffs, Mr. Zitha testified that indeed as stated in paragraph 10 of his witness statement, the Plaintiffs did some work under phase 1 of the contract and issued IPCs. Also, that as stated in paragraph, 11 the Plaintiffs would submit a statement of work done and were paid amounts fairly determined by the employer to be due under an If>C.. . •. r 4 .54 Mr. Zitha disagreed that the First Defendant would issue the IPCs but agreed that the First Defendant could approve the amounts in the IPCs . 4.55 He agreed that as stated in paragraph 5 of his witness statement, the contract price of EUR 978,093,639 was exclusive of-VAT but insisted on the allegation in paragraph 11 of the First Defendant's defence that when the amount is grossed up to include VAT the advance payment component should not iriclude VAT. J20 4.56 He then conceded that a progress report by the First Defendant at p.645 of the agreed bundle, paragraph 12 refers to the Defendants as the employer and that they were required. ~-o apply for tax exemption. 4.57 Mr. Zitha conceded that contract clause 14. l(d) at p.120 of the agreed bundle stipulated that the contract price does not include VAT. 4.58 Also, that clause 14.17(b) at p.121 of the agreed bundle stated that . . ... '-~ the employer shall pay contractor VAT with each IPC. 4.59 Mr. Zitha also admitted that the final letter of tender at p.254 of the agreed bundle stated at the bottom that the Plaintiffs would not bear the cost of VAT. 4.60 Mr. Zitha was not cross examined by the Second Defendant. 4.61 When re-examined by Mr. Musonda, it was Mr. Zitha's testimony that based on the contract, the contractor not the First Defendant would issue IPCs 1 the First Defendant as employer would then verify whether the claim met the agreed methodology or whether the deliverables were met. Adjustments may thereaft~r .. pe done, followed by payment. J21 4.62 DW2, Mrs. Maureen Mumba testified in chief based on her witness statement of 29th October 2024 supported by the agreed bundle of documents. She was the director of finance for the First Defendant. 4.63 A summary of her statement is that in 2017, the First Defendant sought to rehabilitate the Chingola-Livingstone railway line. Team Sweden Railway (TSR), led by Bombardier Transportation of Sweden AB, submitted a bid and was later represented by the Second Plaintiffs. 4.64 Mrs. Mumba stated that in March 2021, the Plaintiffs executed an engineering, procurement, and construction contract for the modernization of the First Defendant, valued at EUR 978,093,639 (excluding VAT). The contract had two phases: track assessment and engineering, procurement, and construction. The Defendants were the employe~s, and an engineer was to be appointed. 4.65 She further stated that the Plaintiffs completed Phase 1 works and issued payment certificates as per contract. The contract required that the Plaintiffs submit a statement of work done and be paid mounts fairly determined by the First Defendant. through an IPC. J22 4.66 She also stated that the First Defendant's records indicate an outstanding balance of EUR 6,296,784.49, with EUR 1,340,460.60 uncertified. 4.67 Mrs . Mumba concludes by maintain that the First Defendant is not indebted to the Plaintiffs as claimed. 4.68 When cross examined by Mr. Ndalameta for the Plaintiffs, Mrs. Mumba testified that she is in charge of the finant'ial affairs of the First Defendant. 4.69 She agreed that paragraph 10 of her witness statement suggested that there is an amount in the books showing as owed to the Plaintiffs whilst paragraph 11 stated that the First Defendant does not owe the Plaintiffs. She insisted that no money is owed to the Plaintiffs by the First Defendant. 4.70 Mrs . Mumba was not cross examined by the Second Defendant. 4.71 Upon re-examination, Mrs. Murnba clarified that the First Defendant does not owe the Plaintiffs as all sums claimed which were certified have been paid. The balance showing in the booies · is for sums not certified and relates to work not done . J23 4.72 Mr. Chishimba Mutale (DW3), the First Defendant's track maintenance manager testified in chief based on his witness statement of 29th October 2024 supported by the agreed bundle of documents. 4 .73 Mr. Mutale echoed DWl's testimony in chief and stating that the Defendant is not indebted to the Plaintiffs as the extent of the claims were no approved by the First Defendant. 4.74 When cross examined by Mr. Ndalameta for the Plaintiffs, Mr. Mutale testified that the First Defendant acted as engineer and would fairly determine what was due to the Plaintiffs. 4. 75 He admitted that going by paragraph 17 of his witness statement, he accepts the First Defendant's indebtness of amounts which the First Defendant approved. 4. 76 Mr. Mu tale was referred to the Auditor General 's report featured at p.678 of the agreed bundle and read p.661 which states that as at 31st December 2022 !PCs totaling EUR 8 ,308,877.27 had been certified out of which EUR 3,121,508.59 was paid, leaving a balance of EUR 5,187,368 .68. 4.77 He confirmed that as at 31st December 2022 !PCs totally Euro 8,308,877.27 had been certified. J24 4.78 Mr. Mutale was not cross examined by the Second Defendant. 4. 79 Mr. Mutale was re-examined during which he clarified that strictly following clause 6.4 of the contract at p. 77 of the agreed bundle, there was no FIDIC engineer, so the First Defendant acted as interim engineer. 4.80 On that note the First Defendant closed its case. _, 4.81 The Second Defendant's sole witness, Mr. Nyangu (DW4) testified in chief based on a witness statement filed 15th November 2024 and the agreed bundle of documents. His designation was head of portfolio at the Second Defendant. 4.82 A summary of his testimony in chief was that on 5th May 2021, the Plaintiffs, on behalf of Team Sweden Railway Consortium, entered into a contract with the Defendants for the engineering, procurement, and construction (EPC) of the rehabilitation, maintenance, and modernization of the First Defendant's line from Livingstone to Chingola. The contract, valued at -EUR 978,093,639, was structured into two phases, with work completed only under ' Phase 1. J25 4.83 Mr. Nyangu stated that clause 3.1 of the contract required the Second Defendant to appoint an engineer to oversee project implementation. This clause was modified by the special conditions of the contract, stipulating that the contractor, with the involvement of the employer, was to propose three candidates for the engineer role, from which the employer would appoint one . However, the Plaintiffs submitted three candidates without involving the employer, leading to the rejection of their proposals as evidenced at p.632 of the agreed bundle. 4.84 He stated that since no engineer was appointed, the certification and issuance of !PCs under clause 14.3 and clause 14.6 of the contract became problematic. According to the contract, the engineer was responsible ,for verifying work completion and issuing !PCs for payments. Without an appointed engineer, the Plaintiffs issued !PCs themselves, violating the contract's stipulated process as evidenced by the invoices at p.447-501 of the agreed bundle. Consequently, payments amounting to EUR 6,742 ,354.29 were . made irregularly under Phase 1. 4.85 He stated that several work activities under Phase 1 have either been incomplete or questioned for their accuracy. These include: J26 4.85.1 a preliminary report on camp locations was rejected due to inaccurate assumptions based on a desktop study rather than a site survey (€383,215 worth of work remains unapproved). 4.85.2 a visual check report on bridges and culverts, valued_ at €257,564.30, was found insufficient as it lacked a detailed site assessment. 4.85.3 several other activities, including signaling survey reports (€1,370,843.20), telecommunications and power survey (€1,183,956.80), market study (€216,786.71), and mapping of the line corridor, remained incomplete or insufficiently evaluated. 4.85.4 an assessment of the railway line survey showed that while 99% of the work was done, only 19.2% was certified, raising concerns about overpayment for incomplete work. 4.86 It was his testimony that due to the lack of an appointed engineer, the First Defendant resorted to engaging multiple independent evaluators. However, this approach was in~o:q{,istent with the contract. Several instances in the project report highlight that the Defendants lacked the technical capacity to assess the reports accurately, further complicating the evaluation process as evidenced by documents at p.378 and 379 of the agreed bundle. J27 4.87 He further stated that his claim is based on a separate contract between the First Defendant and Bombardier Transportation Denmark A. S. for upgrading the signaling and telecommunications system, where it paid an advance of USD 3,600,000. However, the project never materialized, and the amount remained unrecovered. The contract appears at p . 647 of the agreed bundle. 4 .88 Mr. Nyangu stated that when the Plaintiffs secured the EPC contract, Bombardier was included as a subcontractor and it was mutually agreed that the unpaid sum would be offset from the EPC contract through a debt settlement agreement. 4.89 Despite this agreement, the Plaintiffs and Bombardier failed to execute the settlement agreement, prompting the Defendants to withhold an equivalent amount from the Plaintiffs' payments. The evidence of this appears at p.407,681,697 and 392 of the agreed bundle. 4.90 He further stated that payments made to the Plaintiffs need to be thoroughly scrutinized due to procedural violations and incomplete work. J28 4.91 In conclusion it was his testimony that the Plaintiffs should refund the USD 3,600,000 paid to Bombardier and prayed that the Court grants the Second Defendant's reliefs in its defence and counterclaim. 4.92 When cross examined by Mr. Ndalameta, Mr. Nyangu testified that he was the desk officer overseeing the First Defendant, and had that position even before the dispute arose. 4.93 He admitted that he was aware that the First Defendant performed the function of engineer in the contract and that he did not dispute that the First Defendant was reviewing and approving IPCs for payment. 4.94 Mr. Nyangu agreed that he referred extensively to the report by the First Defendant at p.632-646 of the agreed bundle and that he accepted the contents of the report. 4.95 In paragraph 34 of his witness statement, he spoke of a contract between the First Defendant and Bombardier Denmark for upgrading signaling and telecommunications equipment and looking at p.64 7 of the agreed bundle, he agreed that the First Defendant was not party to it. J29 4.96 In it the First Defendant had contracted with a consortium called BHG Zambia Alliance composing Bombardier Denmark, Huawei International Limited and GMC Technologies Zambia Limited. He however insisted on maintaining paragraph 35 of his witness statement. 4.97 He testified that according to him BHG Zambia Alliance and TSR are not the same. 4.98 Mr. Nyangu testified that according to p.392 of the agreed bundle the sum of USD 3 .6m was paid by the First Defendant to Bombardier Denmark on 24th April 2014. 4.99 He testified that Bombardier Denmark was the lead of TSR during negotiations and relied on the letter at p .328 of the agreed bundle as proof. He admitted that the letter was addressed to Bombardier Sweden. ',.l ,lo ._ 4.100 Mr. Nyangu testified that in paragraph 38 of his witness statement, he meant that TSR and the Defendants agreed that the USD 3.6m be offset under the EPC contract and that a debt settlement agreement would be linked to the EPC contract. J30 4.101 The settlement agreement is the one appearing at p.399-406 of the agreed bundle and he admitted that it was not signed by the First Plaintiff. 4.102 He stated that he was not aware that the EPC contract did not allow for such set off. When referred to clause 1.14 at p.16 of the agreed bundle , on joint and several liability, he agreed that it did not refer to the contract with BHG Zambia Alliance . 4.103 Mr. Nyangu stood by paragraph 4 of the counterclaim but accepted that the BHG Zambia Alliance project and that of the EPC are different. He however insisted that under both, Bombardier was to s~pply signaling equipment. 4.104 Mr. Nyangu was not cross examined by the First Defendant. 4.105 When re-examined, Mr. Nyangu clarified that the USD 3.6m was paid under the BHG Zambia Alliance project but that under the EPC contract, Bombardier was again contracted to supply the signaling and that is where the USD 3. 6m was to be offset from . 4.106 On that note the Second Defendant closed its case. J31 CLOSING SUBMISSIONS FROM THE BAR 5.1 After conclusion of trial, the parties tendered final written submissions as follows- i) ii) iii) iv) the Plaintiffs on 19th February 2025; the First Defendant on 24th February 2025; the Second Defendant on 26th February 2025; and the Plaintiffs' reply on 5th March 2025. 5.2 I propose to dispense with a copious reproduction of their content as the parties departed from directly addressing the core issues agreed upon at scheduling conference, embodied in the order for directions of 6th September 2024. ANALYSIS AND FINDINGS 6.1 I have closely studied the material on record, evidence and supmissions and after a careful consideration, my decision is as set out below. The contention of who the parties were to the contract pleaded in paras. 8 and 9 of the statement of claim. 6.2 Paragraphs 8 and 9 of the statement of claim read: Sweden Railway "8. As a result, on 5th March 2021, the Plaintiffs representing Team an Engineering Procurement and Construction contract for the rehabilitation and modernisation of Zambia Railways Limited at the Contract Price of €978,093,639 exclusive of Value Added executed J32 Tax (the "Contract"). The Contract was in two Phases. Phase 1 of the Contract covered only the final assessment of the track and Phase 2 of the Contract covered all Engineering Procurement and Construction works. 9. The terms of the Contract were outlined m the following documents: (i) (ii) (iii) (iv) (v) particular Conditions and Appendix to Tender; the General Conditions; the Employer's Requirements; the Preliminary Schedules; and the Contractor's Proposal. The Plaintiffs will rely on the Contract for its full terms and effect." 6.3 The contract has been produced in the agreed bundle and perusal of its cover, its parties clause and signature page show that the parties were TSR consortium as contractor and the two Defendants jointly as employer. See p.2,3,4 and 5 of the agreed bundle. 6.4 I therefore find that all the litigants in this action were party to the contract. 6.5 For convenience, the phrase "the employer" shall be used herein interchangeably with the Defendants, whilst "TSR consortium" and "the contractor" shall be used interchangeably with the Plaintiffs. J33 The contention of percentage of works completed by the Plaintiffs under the contract. '--: ·,' 6 .6 In para. 11 of the statement of claim, the Plaintiffs allege that they completed 92.3% of the works under phase 1 of the contract which has been denied by the Defendants in paras. 8 and 9 of their respective defences. 6. 7 In Finance Bank Zambia Ltd. & Anr. v Simatcia.'Simataat 11 Malila . CJ, then as JS) guided that a core principle of English law applicable to Zambia is the need to preserve the value and sanctity of contracts. He went on to echo the Supreme Court's endorsement of jurisprudence canvassing the point that contracts freely and voluntarily entered into shall be held sacred a:n.d , enforced by the Courts. 6.8 In the case at hand, perusal of the contract had a two step process for evaluating the extent of work: 6.8 . 1 submission of a statement by TSR consortium to the engineer, complete with a self assessment 0cof extent of work done and the value thereof {clause 14.3 at p.74 agreed bundle); and 6.8.2 vetting {by the engineer) of the submission by TSR consortium and certification in form of an IPC {clause 14.6 at p. 77 agreed bundle). J34 6.9 The engineer as a role player was defined in clause 1.1.2.4 of the r . .. i, 1·· contract as 'the person appointed by the employer ... ' (see p .8 of agreed bundle). The appointment process was for its part explained in clause 3.1 (at p.111 agreed bundle) as a consultative process triggered by TSR consortium: "The Contractor shall, with the involvement of the Employer, propose to the Employer three alternatives to be assigned as Engineer and the Employer shall appoint one of those." 6.10 The engineer was further enjoined under the contract to 'act reasonably, fairly and impartially taking into account equally the I • • • ~ .• interests of both the employer and contractor' ( see clause 3. 1 at p 111- 112 of agreed bundle). I 6.11 What can be discerned from the contract is that the power to certify the extent of work done by TSR consortium (and value) was to vest in the engineer as an independent third party expert, instead of in ~ither TSR consortium {Plaintiffs) or the employer (Defendants}. 6.12 The record shows there was no engineer appointed under the contract and by implication no works (and values) were certified by the engineer as envisaged thereunder. J35 6.13 Infact the record shows that the appointment process for the engineer was actually abrogated by both camps as: 6.13.1 there is no evidence to show that TSR consortium involved the employer in the process of identifying ·3 candidates for possible appointment, instead there is a report by the First Defendant inter alia complaining that employer was bypassed in the process (see p.641 of agreed bundle); 6 . 13.2 Mr Gedik (PW) admitted in cross examination that the role of the engineer was fundamental and included evaluating performance, but none was appointed; and C 6 . 13.3 Mr Zitha (DWl) admitted in para 8 of his witness statement that the employer also did not do its part in the appointment process owing t_o financial constraints and instead the First Defendant acted as engineer to avoid having to pay a third party neutral. 6.14 I have combed through the contract and not fou~d a provision that empowers any other person to certify the extent (and value) of works. 6 .15 It is no wonder therefore that there are even varying 'opinions' of the percentage of works completed under the contract, namely: 6.15.1 92.3 % according to the Plaintiffs' pleadings (para. 11 statement of claim); 6.15.2 86 % allegedly attributed to the Minister of Transport (see para. 29 of Mr Gedik's witness statement) ; and J36 6.15 .3 84 % attributed to the Office of the Auditor General in its report on the First Defendant (see p.678 agreed bundle). 6.16 All of this lends credence to the cardinal role of having an objective third party neutral in form of the engineer as prescribed by the parties in their bargain under the contract. 6.17 This Court is duty bound to enforce the contract and find, as I do, tqat in the absence of involvement of the engineer, the self assessment (by either TSR consortium or the emplQyer) of the extent (and value) of work done in Phase 1 of the contract is unreliable. 6.18 I h13-sten to add that it was not prudent for TSR consortium to proceed with works in the absence of the engineer being appointed nor was it prudent of the employer to allow works to be done in that vacuum. 6 .19 In fact, what TSR consortium and the employer. did was prime breeding ground for two possible extremes: 6.19 .1 undervaluation of extent of work leading to underpayment to TSR consortium and unjust enrichment of employer; or 6.19.2 overvaluation of extent of work, resulting in overpayment by employer and unjust enrichment of TSR consortium. - •. L 6.20 In Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Limitedl2 l Lord Wright aptly stated: J37 "It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a m·an from retaining the money of, or some benefit derived from, another wh:ich it is against conscience that he should keep." 6.21 It follows that in determining the case, this Court is duty bound to avoid inadvertently sanctioning unjust enrichment of either TSR consortium or the employer. The contention of whether the First Defendant has any lawful cause for not honouring the amount of €4,956,323.89 or any component thereof. and The contention of whether the First Defendant has any lawful cause foi;- not honouring the amount of €1,433,797.50 or any component thereof. 6.22 According to paras. 13 to 16 of the statement of claim, the allegedly outstanding sums of €4,956,323.89 and €1,43.3 .,797.50 are rooted i11 IPCsl-6. Thus they are ; by implication, dependant on the validity of the !PCs. 6.23 In the preceding parts of this judgment, I alluded to the fact that certification of works and their value was a preserve of the engineer (14.6 at p.77-78 agreed bundle), who could then ,i~·sue an IPC. 6.24 To that can be added that payments to TSR consortium had to be anchored on !PCs issued by the engineer (clause 14.7 at p.78-79 agreed bundle). J38 6.25 In short, a pre-condition to triggering the employer's payment obligation to TSR consortium was issuance of IPCs_ }?y the engineer. ., . . ..,. ~ 6 .26 According to the index of the agreed bundle, the IPCs appear at p.441, 447, 465, 472, 482 and 492, and contrary to the statement of Mr Gedik that they were issued by the First Defendant, they instead bear the Plaintiffs' endorsement at the foot. Whatever the case, the engineer (under the contract) had no hand in the IP~s. -~t ,~-, . 6.27 It follows that in the absence of the expert oversight role of the engineer, none of the IPCs exchanging hands between TSR consortium and the employer had the seal of approval envisaged by the contract. 6.28 Consequently, from the material before Court, the) ?laintiffs are not entitled to the sums of€4,956,323.89 and €1,433,797.50 as the very !PCs on which they are based are not valid under the contract. So I find. The contention of whether the Plaintiffs (or either of them) have suffered any consequential from non-payment of the lo$s aforementioned sums (or any part lawfully due) for which loss the Defendants (or either of them) ougltt to atone. 6.29 This issue is now moot given the invalidity of the IPCs and absence of the contractual trigger for the epiployer's payment obligation. J39 6.30 Proceeding to do works (TSR consortium) and to allow works to be ::u,, done (the employer) without having the oversight role player (the engineer) was risky and it would be unconscionable to allow either camp to benefit from it. 6 .31 I am fortified by the case of Konkola Copper Mines PLC v Mitchell Drilling International Limited and Anr.13 1 where the Supreme Court endorsed the principle that a party should not be allowed to benefit from circumstances brought about by its own wrongs . 6.32 Therefore, I cannot make a finding that the Plaintiffs suffered any consequential loss from non-payment by the Defendants for which the Defendants ought to atone. The contention of whether the total sum of €6, 742,354.29 alleged by the Second Defendant to have been overpaid to the Plaintiffs was approved by the First Defendant and verified by the Second Defendant based on interim payment certificates. 6.33 In Cavmont Capital Holdings Plc. v Lewis Nathan Advocates(4 1 the Supreme Court guided that a court is duty bound to interpret a written contract within its four corners instead of in light of or in .. conjunction with extrinsic evidence. J40 6.34 I have already made a finding that the employer (First and Second Defendants) had no contractual power to vet the IPCs or even certify the extent and value of works under the contract. Thus irrespective of what animated the omission to appoint the engineer, this issue is now moot. 6.35 Consequent to that, neither the Second Defenda nt nor the First D~fendant is competent under the contract to reliably conclude that there was an overpayment to the Plaintiffs. 6.36 Furthermore, to accept their self assessment that there was an overpayment would be to allow them benefit from their own wrong (as partially to blame for not appointing . th~. ii engineer, whose inclependent assessment may possibly have been different). 6.37 The principle from Konkola Copper Mines PLC v Mitchell Drilling International Limited and Anr.13 1 is again applicable, albeit against the Defendants (as employer). The contention of whether the Plaintiffs and/ or Second Defendant are privy to the contract under which the Second Defendant paid USD3,600,000 and/ or otherwise entitled to the rights or subject to any liability thereunder. "' ··-],,., and The contention (if the preceding issue is determined in the affirmative), of whether a claim based on the relevant contract is statute barred. J41 6.38 When cross examined, Mr Nyangu (DW4) admitted that the contract pursuant to which the USD3,600,000 was paid is the one appearing at p.647 of the agreed bundle. Further that its parties are the First Defendant and a consortium called BHG Zambia Alliance .. comprising: 6.38.1 Bombardier Transportation Denmark AS; 6.38.2 Huawei International Pte. Ltd; and 6.38.3 GMC Technologies (Z) Ltd. 6.39 Mr Nyangu also conceded that BHG Zambia Alliance and TSR consortium are different. 6.40 Still in cross examination, Mr Nyangu admitted that the settlement agreement drawn up for recovery of the USD3.6m appeared at p.399- 406 of agreed bundle and that it was not signed by the First Plaintiff. 6.41 In Zambia Oxygen Lim·ited and ZPA v Paul Chisakula and Others<51, the Supreme Court endorsed the doctrine of privity of contract that only parties to a contract can sue or be sued on it. 6.42 In the case before Court, the Second Defendant is not party to either the contract that gave rise to the USD3.6m nor the settlement agreement generated for its recovery. J42 6.43 Furthermore , the Plaintiffs are not party to that contract, the First Plaintiff did not sign the settlement agreement and the Second Plaintiff is not indicated as an intended party to it. 6.44 It follows that the Plaintiffs and Second Defendant are not privy to the contract under which USD3.6m was paid. Further, it has not ,. been establi~hed (in the circumstances of this case) that the Second Defendant is otherwise entitled to the rights (or the Plaintiffs subject to any liability) under that contract. 6.45 With that finding, it becomes otiose to determine whether the Second Defendant's counterclaim for USD3.6m from the rPlaintiffs is statute barred. The contention of whether performance of the contract became impossible through no fault of the Defendants or either of them. 6.46 In Galaunia Farms Limited v National Milling Company Limited!6 l, the Supreme Court re-affirmed that the burden of proof in a civil case lies with the alleger of a fact. 6.4 7 The Defendants (employer) have argued that since the contract was for EPC and financing, the absence of financing secured by the Plaintiffs (TSR consortium) constituted a repudiatory breach. J43 6.48 They have also argued that it rendered the contract illegal in terms of s .56 of the Public Procurement Actl 11. 6.49 However, close perusal of contract lends credence to the Plaintiffs' counter argument that their financing obligation ,vas not a condition precedent to phase 1 but only phase 2 of the works. This can be distilled from clause 8.1 at p.116 of the agreed bundle which stipulated as follows over commencement of works - " 8. Commencement Delays and Suspension 8.1 Commencement of work the GCC's by deleting Vary substituting with the following: first paragraph and 'The Commencement Date for Phase 1 Works shall be the date when the Contractor has received the full amount of the Advance Payment for Phase 1 Works, which is 25% of the Contract Price for Phase 1 Works against advance payment guarantee. The Commencement Date for Phase· 2 ·works shall be subsequent to the completion of Phase 1 Works, subiect to the fulfilment of the below stated conditions to be realised in the following order: (a) the Employer submits to the Contractor written evidence demonstrating approval by the legal authorities that financial arrangements have been made and are ready to utilise in payments for Phase 2 Works,· (b) the Contractor has provided advance payment guarantee for Phase 2 as defined in Sub-Clause 14.2; . ~ .t-1· ;"!ti . . ·. and J44 the Contractor has received full amount of the Advance Payment for Phase 2 Works, which is 20% of the Contract Price for Phase 2 Works." (Emphasis added) 6.50 It follows that the Defendants cannot (during phase 1 of the works) rely on the absence of financing secured by the Plaintiffs as constituting a repudiatory breach. 6.51 Accordingly I decline to make a finding on the limited material before me that performance of the contract became impossible. 6 .52 That notwithstanding, this finding is no bar to proper invocation of release clauses like 19. 7 of the contract if indeed there are genuine circumstances that have made it impossible for either of TSR consortium or the employer to fulfil the contract. See p.100 of agreed bundle. The contention of whether in the circumstances, the Plaintiffs (or either of them) are entitled to relief against the Defendants (or either of them) and/ or whether the Second Defendant is entitled to relief against the Plaintiffs (or either of them). 6.53 In Friday Mwam.ba v Sylvester Nthenge & 2 0rs(7l Mumba Ag. DCJ observed as follows on behalf of the Supreme Court- "The la w of contract regarding contracts entered into voluntarily by legal persons has been honoured since time immemorial." J45 6.54 Accordingly, the Plaintiffs and Defendants cannot be allowed to resile from their bargain reduced into writing in form of the contract. 6.55 Instead, they must be taken to be bound by its terms and this Court will look to \ the contract for solutions notwithstanding that the parties strayed from it in their dealings with each other. 6.56 In that regard, a reconciliation exercise is inevitable, albeit at the hands of the duly authorised neutral expert role player under the contract. 6.57 Case law such as Base Chemicals Z. Ltd. v ZAF & AG8 1 and The Rating Valuation Consortium & DW Zyambo & Assoc. v LCC & Anr.191 have been cited by both camps in trying to steer this Court into the realm of quantum meruit for the Plaintiffs' services. However, I will show in the concluding parts of this judgment that the solution is less complex than that. 6.58 For avoidance of doubt, it is also noteworthy that the obligation to pay VAT was cast on the employer as can be gleaned from the agreed terms that - 6.58.1 the contract price was stipulated as exclusive of VAT (see clause 6 at p.4 and clause 14.1 (d) at p.120 agreed bundle); and J46 6.58.2 the employer would bear and pay VAT (see clause 14.17 at p. 121 agreed bundle). 6.59 It follows that if the Zambia Revenue Authority (ZRA) determines that VAT is applicable to the services offered by TSR consortium (under the contract) then the reconciliation should also factor VAT. CONCLUSION AND ORDERS 7 .1 In the quest,.to develop the country's infrastructure (to aid economic development and improve the quality of life), the state enterprises responsible should neither overspend the limited public resources no~ short-change contractors for their services. 7.2 ln achieving a balance, it is not enough to simply have robust contracts to .guide but also prudent to: 7.2.1 have the discipline to adhere to contractual stipulations; and 7.2.2 have responsiveness to amend contractual provisions if genuine challenges are encountered in performance. 7.3 Where contracting parties opt to casually stray, these Courts will remind them that they are bound to honour their bargain. J47 7.4 The Plaintiffs' claim and the Second Defendant's counterclaim are unsuccessful and here by dismissed save for the respective prayers for any other relief deemed fit by this Court, which I pronounce, pursuant to s. 13 of the High Court Actl 11. That is to say that, unless agreed otherwise by the parties in writing: 7.4.1 TSR consortium should consultatively initiate and the employer appoint the engineer under the contract. The engineer should evaluate the extent of works and assess the value thereof in accordance with the contract. Thereafter a reconciliation should be done of the account between TSR consortium and the employer. 7.4-.2 If the amounts paid to TSR consortium are less than the value assessed by the engineer, it shall constitute a judgment debt payable to TSR consortium. 7 .4. 3 If however, the assessed value of works reveals that TSR consortium has been overpaid, the Second Defendant shall be reimbursed the difference by TSR cortsortium as a judgment debt. 7.4.4 Any of the parties is at liberty to approad."J..~~zRA in writing to conclusively guide over the applicability of VAT to the services offered by TSR consortium (under the contract). If VAT is found applicable then the cluly certified value of works should be grossed up by addition of VAT, to be paid by the employer. J48 7.5 Turning now to the issue of costs. They are a matt er· of discretion for the Court under Order 40 Rule 6 of the High Court Rulesl 11, in Cap. 27. Further, in terms of exercise of that discretion, I heed the Supreme Court's judgment in A/rope Zambia Limited v Anthony Chate & Ors 1101. 7.6 The guidance from Wood, JS in the said auth-0±-it"tJ was that a successful pfirty should not normally be deprived of his costs unless there is something in the nature of the claim or in the conduct of the party which makes it improper for him to be awarded costs. 7.7 Therefore, given the somewhat balanced outcome of this case and the need for further engagement amongst the paFties ,. I deem it fair and just to C?rder that each of the parties shall bear their own costs thereof. So it shall be. 7.8 Hopefully that will leave room for the spirit of good will to germinate and for genuine dialogue to thrive towards amicable closure. Dated at Lusaka this ----------------· day of---------------------------------------- 2025. {4,}; ll!10-l'~'W ············~ ············· K. CHENJ>A Judge of the Hlgh Court J49