Speedpay Limited v Puma Energy Plc (2024/HPC/0027) (7 February 2025) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA 2024/H PC/0027 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: SPEEDPAY LIMITED PLAINTIFF AND PUMA ENERGY PLC DEFENDANT CORAM: Hon Lady Justice Mrs. Irene Zeke Mbewe Appearances For the Plaintiff: Mr. Nkhata and Ms Chanda of Messrs Paul Norah Advocates For the Defendant: Ms. M Undi and Mr Chiyemba of Messrs Eric v Silwamba, Jalasi and Linyama Legal Practitioners JUDGMENT Cases referred to: 1. Mobil Oil (Z) Limited v Lato Petroleum Distributors Limited [1977] ZR 336 2. Wesley Mulungushi v Catherine Bwale Mizi Chomba SCZ Judgment No 11 of 3. General Wilford Joseph Funjika v The Attorney-General [2005] ZR 97 (SC) 4. Courtney and Fairbairn Limited v Tolaini Bros (Hotels) Limited [1975] 1 ALL E R453 5. Finance Bank Zambia Limited v Simataa Simataa Appeal SCZ No 11 of 2017 Jl!P age 6. YB and F transport Limited v Supersonic Motors Limited [2000] ZR 22 Legislation referred to: 1. High Court Act, Cap 27 of the laws of Zambia 2. Black's Law Dictionary, 9th Edition, Thomson Reuters 3. Mckedrick's Contract Law, 3rd Edition 4. Sangwani Patrick Ng'ambi and Chanda Chungu on Contract Law in Zambia, 2nd Edition 5. Edward Peel 'Law of Contract' 14th Edition, Sweet and Maxwell, 2015 [1.0] Introduction [1.1] On 13th January, 2024 the Plaintiff commenced legal proceedings against the Defendant by way of a writ of summons accompanied by a statement of claim. [1.2] The endorsement is as follows: 1. An Order for specific performance of clause 3.6 of the End Users Software License Agreement dated 1st August, 2016; 2. An order that an independent valuation over the End User Software Licence be conducted before the parties proceed with the intended sale; 3. An order that the Defendant pays the Plaintiff the value of the End User Software Licence as per the independent valuation issued by an independent valuer from the official list of Registered valuers/registered accounting firms in the Republic of Zambia; 4. Damages for breach of End user Software Licence; 5. Costs; and 6. Any other relief the court may deem fit. J2 I Page [2.0] Statement of Claim [2.1] In the statement of claim, the Plaintiff reveals that both parties are companies incorporated under the Companies Act and having their registered office in Lusaka, Zambia [2.2] The facts as pleaded are that Plaintiff entered into an End User Software Licence Agreement (hereinafter referred to as EUSLA) on 1st August, 2022 wherein the Defendant was granted a licence for usage of the Plaintiff's software at a consideration determined by the usage. [2.3] Reference was made to clause 3.6 of the EUSLA providing that upon expiry of the term thereby created, the licensee could elect to renew or purchase the licence at a pricing to be negotiated or agreed between the licensor and licensee. Should the licensee proceed with the purchase, the licensee shall cease to pay monthly use fees and commissions. [2.4] The Plaintiff avers that the EUSLA was terminated by lapse of time on 31st July 2023 and upon expiry the Defendant opted not to renew but to negotiate and purchase the licence. [2.5] By letter dated 28th July, 2023 the Plaintiff availed the Defendant with their standard fees for licensing arrangements in the following terms: (i) Non-recurrent initial annual license fees USD230,000.00 Bl Page (ii) Recurrent annual license fees (RALF) at 21 % of the NRIALF) This comes into effect on expiry of the NRIALF and runs in perpetuity or until the Defendant chooses to terminate. [2.6] By letter dated 28th August, 2023 the Defendant rejected the proposal of the standard fees for licensing arrangements but instead unilaterally decided to engage a neutral third party to conduct a fair assessment of the value of the licence. [2.7] After the expiration of the EUSLA, it was agreed that the Plaintiff provides management services to the Defendant relating to the licence up to 31st December, 2023 pending valuation of the licence by the Defendant. It followed through with the Defendant's unilateral decision and engaged a third party to conduct the assessment of the value of the licence without the involvement of the Plaintiff. [2.8] The Plaintiff avers the process was not transparent culminating in a zero value to the Plaintiff's platform and the report was never availed to them. The Plaintiff further avers the assessment was not supported by the value, efficiency and effectiveness of the software brought to the Defendant. Failure to take relevant factors into consideration could only be solved by involvement of an independent third party to provide valuation. [2.9] The Plaintiff further avers the Defendant is being dishonest in alleging that the value of the licence is zero when in fact not. I J4 Page [2.1 OJ The Plaintiff avers the result of the Defendant's verbal communication of the zero value triggered the Plaintiff to engage HLB an independent valuer who valued the licence in the sum of USD350,000.00. [2.11] The Plaintiff avers that had the license intended to be sold to the Defendant had no value, the Defendant would not have entered into the contract and the Defendant would not have been receiving substantial deposits into the Defendant's bank account on account of the license. [2.12] The Plaintiff avers up to date the Defendant is still using the Plaintiff's license in their daily operations. Despite several reminders from the Plaintiff, the Defendant failed, neglected and or refused to adherently perfect the license agreement or pay for the license fees. By reason of the foregoing, the Plaintiff has incurred damage, loss of profit and revenue. [3.0] Defence [3.1] The Defendant responded by entering a memorandum of appearance and filing a defence on 2nd February, 2024. [3.2] The Defendant avers the Defendant opted not to renew the agreement once it expired on the 31st July, 2023 and the reason was based on an investigation conducted by the Defendant's internal audit team wherein it was discovered the Plaintiff had been crediting itself without matching the deposits causing a discrepancy on the Defendant's system. This exposed the Defendant to a potential financial loss. JS I Page [3.3] The Defendant avers it rejected the proposal of the standard fees for licensing arrangements. [3.4] In compliance with clause 3.6 of the agreement which stipulated that both parties are to negotiate and agree on the purchase price of the licence, the Defendant took steps to engage a neutral third party called lnnovatia Africa to conduct a fair assessment of the value of the licence. [3.5] The Defendant further avers it sought the services of lnnovatia Africa to value the license for the Defendant to purchase. In the process of engaging with this developer it came to light that the Defendant was actually not purchasing the software and therefore a valuation could not be done. [3.6] Further, that purchasing a licence in the manner the Plaintiff suggested would be to purchase the right to use it, which is in effect the same as what the Defendant was already doing. The Defendant would not have possession of the platform, no transfer of ownership would occur and the developer and owner of the software license would be at liberty to use the exact platform with any other OMC as the EUSLA was non exclusive. [3.7] The Defendant avers it paid for services up to the 31st December, 2023. The decision to allow the platform to keep operating after the 31st December, 2023 was a sole decision made by the Plaintiff unbeknown to the Defendant who had already started making arrangements and communicating to I J6 Page its customers that they would be transitioning from the Plaintiff's platform to an internal platform owned by the Defendant. [3,8] The Defendant avers that despite efforts to ensure its customers were made aware it would no longer be using the Plaintiff's platform, the Plaintiff sent contradictory and parallel messages to the Defendant's customers through phone calls advising them there was no transition happening even though the Plaintiff was fully aware of the Defendant's intention to move its customers to its own internal platform. [3.9] The Defendant denies the Plaintiff's allegation that the process was not transparent and avers the transaction as intended by the Plaintiff was for the Defendant to pay to use the license as opposed to the Defendant paying to own the license as prescribed by the EUSLA and therefore a value could not be placed on the software license. [3.1 O] On the zero value of the license, the Defendant avers the license had value while it was being used by the Defendant. The Defendant had no intention of continuing to use the license and therefore had placed no value to it. [3.11] On the Plaintiff's allegation that the Defendant failed or ignored to complete the license agreement, the Defendant denies this as the Plaintiff had paid all amounts due to them as all payments for use of the license had been made up to the period of 31st December, 2023. Thereafter, the platform I J7 Page remained operational at the insistence of the Plaintiff despite the Defendant's efforts to remove the customers off this platform and onto their own internal platform. [4.0] Reply [4.1] In its reply to the defence, the Plaintiff contends the Defendant was granted a license for usage of the Plaintiff's software at a consideration determined by usage. [4.2] The Plaintiff disputes the allegations of discrepancies and self crediting which were addressed and were as a result of the Defendant's failure to pay monthly subscription fees being recovered from the Plaintiff's fees. [4.3] The Plaintiff avers that contrary to the signed EUSLA between it and the Defendant, the Defendant opted to reject fulfilling their obligation to purchase the license at a standard fee, [4.4] Further, the Defendant communicated with the Plaintiff about choosing appraisers but ultimately opted to unilaterally select the valuer responsible for assessing the licence value. [4.5] The Plaintiff disputes the Defendant possessed knowledge and comprehension of the EUSLA clause that stipulated the Defendant at the expiration of the term was to renew or purchase the licence at a pricing to be negotiated or agreed between the licensee and licensor. I J8 Page [5.0] Hearing [5.1] At trial, the parties presented a witness each. Both parties sought to rely on expert evidence and did not comply with Order 38 rule 36 (1) Rules of the Supreme Court, 1999 Edition. Following an objection from either party, the expert reports were expunged from the record for being improperly before Court. [6.0] Plaintiff's evidence [6.1] PW was Darlington Kutenha who adopted his witness statement with similar averments as in the statement of claim and I need not regurgitate the same. The witness produced the Plaintiff's bundle of documents (hereinafter referred to as "BOD"). [6.2] In cross examination, PW told the Court the parties entered into a one year agreement which expired on 31st July, 2023. When referred to clause 3.6 of EUSLA, PW told the Court it provided for 2 options and was subject to negotiations and both parties were to have a say in the pricing. [6.3] He admitted there was no clause in the agreement that prevented the Defendant from engaging a third party. PW denied the assertion that the Defendant had paid for the license but paid for management fees and not the license fee which two are different. I J9 Page [6.4] In further cross examination, PW referred to clause 3.6 of the EUSLA which required negotiations and consultation and required involvement with a third party. PW testified the third party required the Plaintiffs involvement with a view to evaluate figures and determine performance on the platform. [6.5] OW testified it was imperative for the Plaintiff to be involved in the valuation and therefore had an issue when this was not done. OW explained a valuer was appointed by the Plaintiff for its own consumption, and had misgivings on the zero-value valuation which was unacceptable to the Plaintiff. PW further testified the engagement of an independent valuer offered objective advise. [6.6] He explained that when a licence is purchased, the purchaser has a right of use though clause 3.6 of the EUSLA did not stipulate that. He could not pinpoint any clause relating to exclusive use of the platform. He agreed the Plaintiff refused to cooperate with the Defendant regarding the transition of the licence. [6.7] In re-examination, PW explained that with the purchase of a licence, the purchaser acquired the right of usage of the software. [7 .O] Defendant's evidence [7.1] Wingani Vinkhumbo was the sole witness for the Defendant who produced his witness statement as his evidence in chief and produced the Defendant's bundle of documents. JlO I Page [7.2] In cross examination, DW testified that going by clause 3.6 of the EUSLA, the Defendant was to purchase the platform and the licence and monthly fees and commission would cease to be payable and the response to the non-recurrent licence fees and recurrent license fee was contained in the letter dated 28th August, 2023. [7.3] DW admitted that the offer given to the Plaintiff was declined and the Defendant committed to timelines to reach the milestones. [7.4] DW confirmed there were no requests made to different valuers and the purported valuation undertaken was not done by a valuer registered in Zambia nor was there any proof the Defendant engaged a listed valuer. He admitted that at the material time the licence had value to the company. [7.5] DW testified that the Defendant was paying the Plaintiff for using its platform pending valuation. DW told the Court the Plaintiff had not been availed a copy of the valuation as it was not a requirement though they were informed of the result and what action would take place. The valuation report was not in the bundle of documents. [7.6] In further cross examination, DW could not confirm whether the valuation report was concluded at the same time the Plaintiff demanded for specific performance vide a letter dated 22nd December, 2023. Jll I Page [7.7] DW testified clause 3.6 of the EUSLA was unfavourable and gave two options to purchase and enlist a valuer to determine the value and were advised the Defendant would not owe anything but rather it would have the right to use the already existing software until 31st December, 2023. [7.8] DW testified the Defendant paid for using the licence pending the valuation though such payment was not towards its purchase. DW maintained the Defendant was not in breach of clause 3.6 of the EULA as it paid up to 31st December, 2023 and it followed would not pay for something not in use. [7.9] On queried as to whether the Defendant was amenable to performing clause 3.6 of the EUSLA, the response was in the affirmative. [8.0] Written submissions [8.1] Both parties filed written submissions for which I am most grateful and give an insight into the issues. [8.2] The parties are rest assured I have considered the submissions in the determination of the issues at hand and reference shall be made in the course of the Judgment. [9.0] Law and analysis [9.1] I have considered the pleadings, evidence and rival arguments by both Counsel. Having heard the learned Counsels and considered the written submissions filed therein, this Court is Jl21Page of the view, the following questions arise for consideration, namely: 1. Whether there was a valid enforceable agreement between the Plaintiff and Defendant following termination of the EUSLA. 2. Whether the Plaintiff is entitled to specific performance of the EUSLA 3. Whether on the facts, the Defendant is in breach of the EUSLA. 4. Whether the Plaintiff is entitled to the reliefs sought. [9.2] I have thought it helpful to being by giving a brief analysis on the law of contract as the reliefs sought relate to that facet of the law. [9.3] The learned author Evan McKedrick's Contract Law, 3rd Edition cited by Counsel for the Plaintiff, provides a generic statement on the law of contract at page 3 as follows: "The law of contract is perceived as a set of power conferring rules which enable individuals to enter into agreement of their choice on their terms. Freedom of contract and sanctity are the dominant ideologies. Parties should be free as possible to make arrangements on their own terms without the interference of the courts or parliament and their agreement should be respected, upheld and enforced by the Court." Jl3 I Page [9.4] The learned author Edwin Peel in 'The law of contract', 14th Edition at page defines a contract as follows: "An agreement giving rise to obligations which are enforceable. " [9.5] The above authorities are sound at law. Undisputed facts [9.6] It is common cause the Plaintiff and Defendant had a contractual relationship consummated through the EUSLA which was duly executed by both parties. [9.7] It is not in dispute the Defendant terminated the user licence on 31st July. 2023 and the Defendant was to continue using the platform until 31st December, 2023. [9.8] It is not in dispute the Defendant opted to purchase the license upon termination of the EUSLA pursuant to clause 3.6 of the EUSLA. [10.0] Specific Performance [10.1] The Plaintiff se.eks an Order for specific performance of clause 3.6 of the EUSLA dated 1st August, 2016. [10.2] Specific performance is an equitable and discretionary remedy. The Courts have consistently and constantly emphasized that specific performance is not an automatic right and is granted at the discretion of the Court. I J14 Page [10.3] As rightly submitted by Counsel for the Plaintiff, before a Court can venture to deal with and issue an order of specific performance, it is important to ascertain or authenticate whether there exists a valid and enforceable agreement between the parties capable of being implemented and or enforced by a Court of law. [10.4] Specific performance may be granted where an agreement is enforceable against both parties so as to ensure fairness, or there is inadequacy of damages as a remedy. The party seeking specific enforcement as a remedy should come with clean hands. [10.5] Counsel for the Plaintiff placed reliance on the case of Mobil Oil (Z) Limited v Loto Petroleum Distributors Limited (1l where it was held inter alia that a Court will not grant a decree for specific performance of a contract if the party seeking the decree can obtain a sufficient remedy for damages and such decree will not be made when it would be impracticable to secure compliance. This case demonstrates that a Court will not be inclined to grant specific performance where it is impracticable to secure any form of compliance. [10.6] In the case of Wesley Mulungushi v Catherine Bwale Mizi Chimba (2l the Supreme Court held: "The court will decree specific performance only if it will do more perfect and complete justice than the award of d amages .... " J15 I Page [10. 7] The above cases serve to illustrate the rationale behind the equitable remedy of specific performance. [;I 0.8] It is not in dispute the EUSLA terminated by effluxion of time as garnered from the letter from the Defendant to the Plaintiff dated 2nd October 2023 (page 25-26 Defendant's BOD). It states inter alia: " From the time the contract between Puma and Speedpay terminated by effluxion of time, Puma has acted professionally within the legal boundaries of the Agreement. .. " [10.9] The expectation in the law is that specific performance calls for specific adherence to all the terms of an agreement. The pertinent question is whether there was a complete enforceable agreement between the Plaintiff and Defendant following the termination of the EUSLA. [10.10] Counsel for the Plaintiff submitted that pursuant to clause 3.6 of the EUSLA, the Defendant took the option of purchasing the licence at a negotiated price. It is not in dispute this option was communicated during the subsistence of the EUSLA. [10.11] I hasten to add that even if the option to negotiate for the licence pricing was exercised during the subsistence of the EUSLA, I find it did not create a separate and independent enforceable contract as will become apparent. Jl61Page [10.12] In my view, there was an incomplete agreement as it was dependent on the parties negotiating for the pricing of the license fee and coming to an agreement. There was disagreement between the parties leading to the present action. In between, the Defendant advised the Plaintiff it would not be proceeding with the purchase of the license. [10.13] For the above reasons, in the absence of an enforceable contract between the Plaintiff and Defendant, I decline to exercise my discretion to grant an order of specific performance. The claim is without merit. [11.0] An order that an independent valuation over the End User Software License be conducted before the parties proceed with the intended sale [11.1] The Plaintiff claims for an order that an independent valuation over the End User Software License be conducted before the parties proceed with the intended sale. [11.2] Counsel for the Plaintiff submits that the Court is clothed with jurisdiction to appoint an independent valuer to ascertain the value of the license. Counsel for the Plaintiff placed reliance on section 13 High Court Act, Cap 27 of the laws of Zambia which enjoins this Court to administer law and equity concurrently. I agree. [11.3] Further, Counsel contends the Plaintiff has an equitable right to claim that an independent valuer be appointed to ascertain the value of the license and based on the value, the Court has J171Page the discretion to order the Defendant to pay the value of the license as per the valuation report. [11.4] In putting matters into context, it is my understanding that the software user licence is a contract between a licensor and licensee and grants the licensee the right to use the software under specific conditions without transferring full ownership of the software. A licensor generates recurring revenue on it. [11.5] The Plaintiff's claim is centered on clause 3.6 of the EUSLA which provides as follows: "3.6 Upon expiry of the term hereby created, the licensee shall elect to renew or purchase the license at pricing to be negotiated or agreed between the Licensor and Licensee. Should Licensee proceed with the purchase option, Licensee shall cease to pay monthly use fees and commissions." [11.6] In construing the above clause, it is trite law that the primary rule of interpretation is to apply a literal interpretation. The legal basis upon which Counsel for the Defendant's submission sits is the case of General Wilford Joseph Funjika v The Attorney-General (3 where the Supreme Court ) stated as follows: "It is trite law that the primary rule of interpretation is that words should be given their ordinary grammatical and natural meaning. It is only if there is ambiguity in the J18 I Page natural meaning of the words and the intention of the legislature cannot be ascertained from the words used by the legislature that recourse can be had to the other principles of interpretation." [11.7] I adopt the above passage as my own. It is my understanding that the Court's usual role in contractual interpretation is, by resolving ambiguities or reconciling apparent inconsistencies, to attribute the true meaning of. the language in which the parties themselves have expressed their contract. [11.8] In dissecting clause 3.6 of the EUSLA, where the Defendant exercises the option to purchase, the pricing of the purchase of the license is to be negotiated or agreed between the licensor and licensee, that is the Plaintiff and Defendant herein. The two operative words are "negotiated and purchase". What is the meaning of negotiated? [11.9] In simple terms, to negotiate is a strategic discussion that resolves an issue agreeable or acceptable to both sides. [11.10] On the other hand, the word 'purchase' is defined in the Black's Law Dictionary 9th Edition as follows: "Transmission of property from one person to another by voluntary act and agreement, founded on a valuable consideration." [11.11] Having defined the two operative words, to provide context, I reproduce the relevant parts of a letter dated 28th August, J19 I P a g e 2023 from the Defendant to the Plaintiff (page 17 of the Plaintiff's BOD). It reads as follows: " .... Your fee of $230,000.00 is not acceptable, For purposes of agreeing on the license fee, at this stage, we will be proceeding to engage a neutral third party to conduct a fair assessment of the value of the license. We will furnish you with the timelines as to when the assessment report will be furnished to us, once the Valuer avails the same to us [11.12] In a subsequent letter dated 9th October, 2023, from the Defendant to the Plaintiff, the relevant part is reproduced (page 19 of the Plaintiff's BOD). It is worded as follows: Our commitment to observe clause 3.6 is unwavering and is contractual. Therefore given this position we, cannot go back on it. For your comfort, we intend to achieve the following milestones in the month of October, 2023 following which we will consider making our formal offer: 1. Request for quotations for valuer 2. Valuer selection; and 3. Valuer will commence work. We reiterate that Puma as a business must continue to operate and cannot be held to ransom while it complies J20 I Page with the due process of exercising its options under clause 3. 6 of the Agreement. We trust that we can move on in the separation process to meet the closure deadline of 31st October and a smooth transition for the customers. " [11.13] From the contents of the above letters, the Defendant provided a roadmap to the Plaintiff on how it would go about actualizing clause 3.6 of the expired EUSLA. However, the Defendant opted out. The reason being that certain information came to its attention which was detrimental as opposed to beneficial to it. [11.14] DW testified that in purchasing the licence, the Defendant could have continued paying recurrent fees as was obtaining during the subsistence of the license. Hence, in their view there was no benefit and was no different from the existing arrangement. At this point, the Defendant informed the Plaintiff it would not proceed with the purchase of the license. Prior to that, each party appointed a valuer to come up with the value of the license. [11.15] Following the withdrawal of the Defendant from negotiations, on what basis is the Plaintiff seeking an order for appointment of an independent valuer? I form the view that the Plaintiff cannot rely on clause 3.6 of the expired EUSLA as it provided for negotiations as a process which fell through. J21 I P a g e [11.16] To shed more light on negotiations and the legal effect, Lord Leggart in a talk given in 2018 remarked extra judicially, "that parties who agree to negotiate do not agree to agree. They agree to engage in a process - a process of holding discussions with a view to trying to reach an agreement. They give no undertaking about what the result of the process will be. They do not promise that the negotiations will be successful and that they will then enter into a contract." [11.17] In the case of Courtney and Fairbairn Limited v Tolsini Bros (Hotels) Limited (4l Lord Denning on the legal status of negotiations inter alia stated as follows: "If the law does not recognize a contract to enter into a contract (when there is a fundamental term yet to be agreed) it seems to me it cannot recognize a contract to negotiate. The reason is because it is too uncertain to have any binding force ... It seems to me that a contract to negotiate, like a contract to enter into a contract, is not a contract known to the law. .. I think we must apply the general principle that when there is a fundamental matter left undecided and to be the subject of negotiations, there is no contract" [11.18] I adopt the above reasoning as my own and find it persuasive. [11.19] Both parties had an obligation to negotiate the pricing of the license under clause 3.6 of the expired EUSLA. This cardinal matter was left undecided, and became difficult to achieve as J22 I P a g e the Defendant opted out of the negotiations. It then proved impossible to proceed and conclude the negotiations. This meant there was no agreed terms as earlier alluded to, hence no enforceable agreement in place between the Plaintiff and Defendant on which the Plaintiff can anchor the present claim. [11.20] For the above reasons, in the absence of any legal foundation, I decline to order that an independent valuation over the End User Software License be conducted before the parties proceed with intended sale in line with the provisions of clause 3.6 of the agreement. The claim is without merit. [12.0] An order that the Defendant pays the Plaintiff the value of the End User Software License as per the independent valuation issued by an independent valuer from the official list of registered valuers/registered accounting firms in the Republic of Zambia [12.1] The Plaintiff seeks an order that the Defendant pays the Plaintiff the value of the End User Software License as per the independent valuation issued by an independent valuer from the official list of registered valuers/registered accounting firms in the Republic of Zambia. [12.2] Having made a finding that the negotiations cannot be termed as legally binding following the termination of the EUSLA, I decline to grant an order for the Defendant to pay the Plaintiff the value of the End User Software License as per the independent valuation issued by an independent valuer from J23 I P a g e the official list of registered valuers/registered accounting firms in the Republic of Zambia. The claim is without merit. [13.0] Breach of contract [13.1] The Plaintiff seeks damages for breach of contract. Under the law of contract, a breach of contract occurs where a party fails to perform its obligations under a contract or license in this case. This principle is aptly stated in a plethora of legal authorities such as Finance Bank Zambia Limited v Simataa Simataa < 5l where the Court stated: "A breach of contract usually, but not always causes a loss. In either cases, there is a right of action against the contract breaker" [13.2] The learned authors Sangwani Patrick Ng'ambi and Chanda Chungu on Contract Law in Zambia, 2nd Edition at page 334 in giving instances of breach of contract as follows: "i) There is failure or refusal to perform their obligations under the contract, that is, the due date of the performance arrives, and the other party does not perform their obligation or part of the bargain; ii) provision of defective performance - that is, the performance is not precise or exact; or iii) one party disables himself from performing his promise or part under the contract." J24 I P a g e [13.3] The above principles are sound at law and adopt the above. [13.4] The basis for the Plaintiff's claim for breach of damages is that the Defendant has wronged the Plaintiff for failure to adhere to clause 3.6 of the EUSLA, and is therefore entitled to damages for breach of agreement. The Plaintiff also point to the fact that considering the economic value of the license and the time it has taken the Plaintiff to successfully pursue their rights from August, 2023 when the Defendant ought to have perfected the EUSLA, it has suffered loss and damage. [13.5] In refuting the above, Counsel for the Defendant takes the view that the issue is whether the Plaintiff has discharged the burden of demonstrating the Defendant did in fact breach the EUSLA by failing to purchase the software license owned by the Plaintiff. [13.6] Counsel for the Defendant further argues purchasing the license in the manner the Plaintiff suggested would be to purchase the right to use it, which is in effect the same as what the Defendant was already doing under the EUSLA. As rightly observed by PW, the user license is a proprietary license which is authorised by the proprietor under specific terms. [13.7] Another limb of argument advanced by Counsel for the Defendant is that if the option to purchase the software license was available to the Defendant, the Plaintiff failed to provide a valuation of the software license and instead provided a valuation report for the Plaintiff's entire company. On this - I J25 Page I. , r score, DW gave conflicting evidence as to whether the Defendant was purchasing the business or the platform. [13.8] Following my earlier findings on the non-existence of a validly binding agreement between the parties following termination of the EUSLA on 31st July, 2023 followed by the Defendant withdrawal at the negotiation stage of purchasing the license, it follows the Plaintiff has no legal legs to stand on. This would have been avoided had there been clear terms of the process to be followed and the consequences of failure to follow through. [13.9] Therefore, a party cannot be awarded damages for breach of contract where parties were in the middle of negotiations and the Defendant opted out of the negotiations to agree on any agreement. The simple reason being that parties had no valid and binding contract in place. Therefore, the claim for damages for breach of contract is without merit. [14.0] Costs [14.1] The Plaintiff seeks costs of the action. Counsel for the Plaintiff usefully referred to the case of YB and F transport Limited v Supersonic Motors Limited where the Supre,mnbme (G) Court inter alia held as follows: "The general principle is that costs should follow the event, in other words a successful party should normally not be deprived of his costs unless the successful party I J26 Page did something wrong in the action or in the conduct of it." [14.2] I accept that the rationale for award of costs by Courts is to indemnify a successful party to a suit for expenses they would have reasonably incurred because of the action. [14.3] I see no reason to deviate from the above practice. It follows a unsuccessful party should be ordered to pay costs to the successful party. [14.4] The Plaintiff having failed to prove its claims, I award costs to the Defendant to be taxed in default of agreement. [15.0] Decision [15.1] By way of disposal, the Plaintiff has failed to prove its case on a balance of probabilities. Therefore, as a result of my findings and conclusion: 1. I decline to grant an Order for specific performance of clause 3.6 of the End Users License Agreement dated 1st August, 2016. 2. I decline to grant an order that an independent valuation over the End User Software License be conducted before the parties proceed with the intended sale. 3. I decline to grant an order that the Defendant pays the Plaintiff the value of the End User Software License as per the independent valuation issued by an independent J27 I Page valuer from the official list of Registered valuers/registered accounting firms in the Republic of Zambia. 4. I decline to award damages for breach of End User Software Licence. 5. Costs to the Defendant to be taxed in default of agreement. 6. I decline to grant any other relief. 7. Leave to appeal granted. Delivered at Lusaka this 7th day of February, 2025 \ HIGH COURT JUDGE ~--_,.;~-- (\ ",_) , ~-0 --r:,O, 4' J28 I P a g e