ZESCO Limited has filed a K1.4 million lawsuit against Savenda General Insurance Limited after a contractor failed to deliver cable fault locators and power transformer test systems, despite contractual agreements.
According to a statement of claim filed in the Lusaka High Court, Zesco invited suppliers to submit bids for the supply and delivery of cable fault locators and power transformer test systems.
A key requirement for prospective contractors was the submission of a Bid Security issued by a financial institution or insurance company.
Following the bidding process, Zesco awarded the contract to Tronex Contractors and Suppliers Limited under contract No. ZECO/033/1/2022, dated August 26, 2024.
This decision was based, among other factors, on Performance Guarantee No. SG/02/23/08002-000392, issued by Savenda General Insurance on October 14, 2024.
Under the terms of the guarantee, Savenda undertook to pay up to K1, 387, 360 in the event of contract termination due to a breach by the contractor.
The guarantee was set to expire on March 31, 2025, with provisions stating that any claim for payment had to be submitted before this date. The guarantee also stipulated that payments would be made in the currency specified in the contract, upon receipt of a written demand from Zesco confirming the contractor’s breach, without requiring further proof.
Zesco stated that the contract expired on November 26, 2024, with the contractor having only delivered 50 percent of the agreed goods, in violation of the contractual terms mandating full delivery. “The plaintiff reiterates that the contract between Zesco and the contractor expired in November 26, last year and the contractor is in breach,” he said.
In a demand letter dated March 20, 2025, Zesco requested payment from Savenda under the performance bond, requiring settlement within seven days.
Despite this demand, Savenda refused to honour the claim, arguing that the contractor’s intentions to co
