The plaintiff's evidence, adduced
through its Managing Director, Jasper Nare, was to the following effect:
He holds a Bachelor of Science
Honours Degree in Chemistry, obtained from the University of Zimbabwe in
1993. He has work experience in the field of chemistry spanning over
twenty years. He joined Delta in 1993 as Production trainee in the Process
and Quality Assurance department. In 1995, he was appointed Process Chemist. In
1997 he was promoted to Quality Control Manager and in 1999 he was promoted to Plant
Manager, with overseer responsibility over water treatment till 2003 when he
left to form the plaintiff company.
The company is involved in the
distribution and selling of industrial chemicals to various clients in Zimbabwe
that include water utilities, power stations, mine houses etc. Prior to
the current dispute, the plaintiff had made deliveries to the defendant of ion
exchange resins similar to the ones in dispute now. Ion exchange resins
are water treatment chemicals used to remove hardness in water which is not
required in water used in boilers for power generation.
Page 3 of the parties' bundle of
documents (exhibit 4) is the purchase order sent by the defendant for mixed bed
cation exchange resin 1000H and page 4 (exhibit 5) is another purchase order
for mixed bed anion exchange resin 4200CL. Following receipt of the purchase
orders, the plaintiff contacted various overseas suppliers, and J H Resin in
China was the front runner in terms of ability to supply the chemical
timeously.The plaintiff had dealt with this supplier before, and, on 19
January 2012, the plaintiff had delivered a similar chemical to the defendant. The
plaintiff then placed an order with J H Resin which it received on 2 February
2012 and dispatched the consignment to the defendant on 3 December 2012 as per
exhibits 6 and 7 – the delivery notes on pages 5 and 6 of the bundle of
documents.
These delivery notes have a goods
return portion stipulating that goods not meeting the customer's requirements
must be returned intact within seven days.
Exhibits 8 and 9 are the respective
tax invoices for mixed bed anion exchange resin Amberjet 4200 CL for $5,623=50
and mixed bed cation exchange resin Amberjet 1000 H for $5,623=50 sent to the
defendant for payment within thirty days. On 3 January, 2013 one Zimuto,
who was in charge of the defendant's finance department, said the defendant
could not pay as it had no money. On 4 March, 2013 the plaintiff wrote the
defendant a letter of final demand for the payment within seven days – exhibit
10. On 8 March 2013, the plaintiff got a letter from Zimuto to the effect
that the defendant was not obliged to pay because the product did not meet
their specification. When he tried to engage James Muyambiri, the chemist, and
his superior, Freddy Magaisa, he hit a brick wall as both were demanding to be
bribed first.
Exhibit 12 is a picture of the
package of ion exchange resin Amberjet 1000 H which the plaintiff supplied to
the defendant while exhibit 13 is a picture of the package manufactured by
Dow. He explained that the difference in the packaging emanates from the
fact that the two are different products by different
manufacturers. Exhibit 14 is a picture of the packaging similar to the one
the plaintiff supplied to the defendant, that is, ion exchange resin Amberjet
4200 CL.
He commented on exhibit 15 – a
report by Rohm and Hass of the analysis of samples from the plaintiff's
consignment sent for chemical analysis by the defendant – saying the comparison
shows minor differences between their sample and what the plaintiff supplied but
the chemicals remain basically the same. He said the variations shown in
the report are acceptable margins in the chemical industry.
The plaintiff then closed its case.
The defendant led evidence from two
witnesses. Cooneous Jacobus Bester is the Dow Chemical Company Technical
Services Manager. The post is responsible for the products which the Dow
Chemical Company manufactures, quality control of those products, trouble
shooting and designing. He is a qualified analytical chemist and has done
twelve years with Rohm and Haas and four years with Dow Chemicals which is the
holding company.
His company is the manufacturer of
ion exchange resins, and, in particular the trade-marked product
Amberjet. In April 2013, he visited the defendant, upon request, to investigate
suspected resins which had been delivered to them. He inspected the
packages and labeling and photographed them and took samples of the resins
which were sent to their laboratory in France for analysis. A report
number, SA 13067, exhibit 15, was subsequently, on his instruction, prepared
under his supervision. The report states that two samples of new ion
exchange resins Amberjet 1000 H and Amberjet 4200 CL were received and the
objective was to identify the resins and confirm whether this was Amberjet type
or not.
The report concluded, following
total volume analysis, that the resins samples were not Amberjet. For
instance, the samples had a high percentage of beads as compared to that of
Amberjet and in terms of particle distribution, the samples were found not
uniform whereas Amberjet has uniform particle distribution. Also, the
packaging pictures showed that the samples were not that of Dow Chemical on the
basis of colour of the bags, colour of the ink, absence of identification of
resins by means of trade mark, batch number, material number and labelling.
Page 17 of the report shows Dow
specifications in the right hand column which are the required minimum. For
instance, on chemical characteristics, the total volume exchange capacity
(which is the ability to exchange salt from water in relation to total resin
volume) the sample had 1.77 as opposed to 1,8 for Dow which is the minimum
acceptable specification. Under physical characteristics, for instance
uniformity coefficient for Amberjet should be less than 1.3 yet for the sample
it was found to be 1.74 which indicates that this was not a uniform size
resin. The second last line refers to less than 425 micron and Amberjet
1000 H has a specification of less than 2 per cent maximum whereas the sample
had 3.45 per cent.
Page 18 shows optical difference by
means of microscope between the sample beads and those of Dow for 1000 H.
Page 19 shows the chemical and
physical characteristic differences for resin 4200 versus the sample while page
20 shows microscopic analysis between sample beads and Amberjet 4200. The
sample has much difference between large and small beads as compared to
Amberjet 4200. There is also presence of cracked beads in the sample which
is absent in Amberjet 4200. Page 21 shows presence of bubbles in the beads of
the sample which is absent in the Amberjet resins.
Page 22 refers to photographs of the
packaging. The first two top bags are of resin sample which were compared
with resins bags by Dow. On the top pictures, the resin type, that is,
Amberjet 1000 H and Amberjet 4200 CL, are fixed onto the bag by means of a
label whereas the two bags below are photos of bags used as packaging by Dow
and can be clearly distinguished by a diamond which is a registered trade mark
of Dow. The bottom picture indicates product number, name and batch number
are shown by mean of a stencil on the side of the bag and this identifies
contents and enable traceability of product.
He
explained that Amberjet is used in water treatment purification for industrial
and power generation. In the defendant's case, it is used for
demineralization of water, to have purified water fed into the boiler to
generate steam which, in turn, is passed through a turbine and the turbine
generates electricity. The resin samples that were analysed are not
Amberjet and if anything not being Amberjet is used in the demineralization the
plant could suffer from:
(i)
High pressure drop.
(ii)
Loss of resin due to back wash.
(iii)
Locked strainers.
(iv)
Lower capacity,
(v)
Short of running cycles.
(vi)
Poor separation of mixed resins.
(vii)
Resultant poorly treated water to the boiler.
The effect on the boiler could lead
to transport of resin fines into the boiler, subsequent breakdown of the resin
fines could lead to boiler chemistry and outage in the boiler.
The peroration of his evidence dealt
with the manufacture of Amberjet and the ownership of its trademark. He
said Amberjet is a uniform manufacture of resins by means of proprietary
manufacturing techniques. Its manufacture is unique as compared to
conventional resins. Conventional resins are manufactured by means of batch
reactor (a glass-lined vessel with a stirrer) and the batch reactor has a heat
source and the bead formation is controlled by means of a suspension mechanism
in the batch reactor, the stirring speed and the temperature. From a batch
reactor, it is consistent that beads size ranges from 0,3mm to 1,2mm in
diameter. On the other hand, the Amberjet technique uses jetting where
beads are formed by means of jetting (copolymer). Using this chemical
process, bead formation occurs through an orifice which controls size of the
bead ranging from 0,6mm to 0,8mm in diameter.
Regarding the Amberjet trademark,
its registration was lodged in several countries including China. Rohm and
Haas is the registered proprietor of Amberjet so only it can legally
manufacture Amberjet resin.
The defendant's Station Chemist,
James Muyambiri, has been employed for six and half years. He holds a BSc
Honours Degree in Applied Chemistry from the National University of Science and
Technology. He is responsible for running the defendant's laboratory and
treatment plant and environment issues.
Following receipt of the resin
consignment from the plaintiff, the stores staff advised him that the packaging
was not the usual one. He went and saw that indeed the packaging was
unusual. There were stickers written Amberjet stuck on the bags. He
advised his superiors accordingly. The plaintiff was requested to supply
further information regarding the packages. The plaintiff supplied data
sheets indicating that the product was Amberjet. One data sheet had a Dow
letterhead while the other a different letterhead. Samples of the resin
were then forwarded to Dow South Africa for analysis in February 2013. The
analysis results came indicating that the resins were not Amberjet resins. He
denied ever communicating with Mr Nare of the plaintiff before issue of
summons. He only met him at the pre-trial conference.
The gravamen of the defendant's
refusal to pay for the supplied resins is simply that the resins do not meet
the defendant's specifications. The question that begs the answer is; what are
those specifications?
The answer to the question must
necessarily derive from the two purchase orders – exhibits 4 and 5. The
description of the item to be supplied is stated in exhibit 4 as mixed bed
cation exchange resin 1000 H and in exhibit 5 as mixed bed anion exchange resin
4200 CL. This description does not specify that the resin type must be
Amberjet and manufactured by Dow Chemical or J H Resin Technology Co. Ltd or
some other manufacturer.
The plaintiff supplied a water
treatment chemical named Ion Exchange Resin Amberjet 1000 H and Ion Exchange
Resin Amberjet 4200 CL. James Muyambiri said what raised the defendant's
eyebrows was the difference in the usual packaging of the resins. But he
said he does not know whether the plaintiff had previously supplied water
treatment resins to the defendant, let alone in different packaging. The plaintiff's
witness said they had previously, and as recent as 19 January 2012, supplied
the defendant with the same chemicals in similar packaging without any query.
This evidence was not disputed. It then baffles logic as to how he managed
to tell that the packaging was this time unusual or different without basis for
comparison. This raises eyebrows and tends to lend credence to Jasper Nare's
averment that the real reason for the dispute between the parties is his
refusal to pay the demanded bribe by Freddy Magaisa and James Muyambiri – an
elongation from his earlier alleged refusal to bribe Freddy Magaisa in 2011
after he had supplied chemicals for Reverse Osmosis project to the
defendant.
This is one strand of evidence
(circumstantial), which, together with others…, will make such inference irresistibly
the only reasonable one.
The consignment was delivered on 3
December 2012, as per delivery notes exhibits 6 and 7.
These delivery notes clearly state
that goods that do not meet customer requirements must be returned within seven
days intact.
Despite the alleged unusual
packaging, whose date of discovery has not been disclosed, the defendant did
not return the goods. Even after discovering that the chemicals did not
meet the alleged specifications following the laboratory analysis, the goods
were not returned, and, as we speak, the defendant still has not returned them
- a year later.
Tax invoices for the consignment
exhibits 8 and 9 were also issued by the plaintiff on 3 December 2012 and
received by the defendant on that date.
Jasper Nare, who I must say gave his
evidence in a clear and straight forward manner and I have no reason not to
believe him, said he contacted Zimuto, of the defendant's finance department,
telephonically, after the 30 day period within which the money was supposed to
be paid had expired and was told that the defendant had no funds at the time to
pay its creditors. He continued pestering Zimuto for payment on a weekly basis
getting the same explanation. After ninety days, exhibit 10, a letter of
final demand, was written on 4 March 2013 to the defendant threatening legal
action. Only then did the defendant start alleging that it would not pay
for the chemicals because what the plaintiff supplied did not meet its
specifications.
I find this unreasonable and it
tends to lend credence to the bribery allegations alluded to supra….,.
The pith of the defendant's defence
seems to be hinged on the fact that Amberjet is a registered trade mark of Rohm
and Haas and only they can legally manufacture Amberjet resin. The dispute,
however, is not one involving infringement of trademark. It involves
non-payment for water treatment chemicals which the defendant ordered and the
plaintiff supplied. No specifications for the water treatment chemicals were
stipulated apart from they being mixed bed cation exchange resin 1000 H and
mixed bed anion exchange resin 4200 CL. This, the plaintiff substantially
complied with as the product was the same as it had supplied the defendant
previously from 2003 without any complaints from the latter.
In the event, the plaintiff has
managed to prove its case on a balance of probabilities and I make the
following order:
Judgment be and is entered for the plaintiff
against the defendant in the sum of US$11,247= with interest at the prescribed
rate calculated from 3 January 2013 to date of full payment plus costs of suit.
