• Section 32 (4) of the Companies Act (No. 10 of 2017) sets out the manner in which a document is validly executed by a company in Zambia. In particular it sets out that:
“A document or deed shall be validly executed by or on behalf
of a company –
• by affixing of the common seal; or
• if the document or deed bears the signatures or signature of –
• two authorised signatories; or
• a director whose signature is attested by a witness.”

• With this in mind, what happens where companies execute an agreement but fail to ensure compliance with section 32 (4) of the Companies Act?
• This issue was recently dealt with by the High Court in the case of Investor Link Minerals Ltd v. Prospect Resources Limited (2024/HPC/0481), where the plaintiff had brought an action against the defendant founded upon a purported agreement that the 2 alleged entered into. The purported agreement was not signed in accordance with section 32 (4) of the Companies Act as it was signed by only one representative of each company and this was not done in the presence of a witness.

• The defence on the matter was led and attended to by our Charles J. Mumba through which defence, the honourable court saw it fit to attend to a hearing of preliminary issues concerning, among others, the enforceability of the purported agreement in light of its non-compliance with section 32 of the Companies Act. In support of the hearing of preliminary issues, it was submitted that the purported agreement is not enforceable by the courts of law in light of it having been executed in breach of section 32 (4) of the Companies Act.
• Delivering its Ruling, the court upheld the preliminary issue by stating in part that, if the formalities under section 32 (4) “…are not met then quite frankly, it cannot be said that the relevant company has actually entered into the contract.” 

• The court therefore, proceeded to dismiss the action founded on the purported agreement for the reason that the purported agreement was not a valid agreement for want of execution in accordance with the prescriptions of section 32 (4) of the Companies Act. 
• It is therefore very important for companies to ensure that agreements entered into are executed in accordance with the provisions of section 32 (4) of the Companies Act, failing which, the agreement will not be enforceable by the courts of law. See below link, a ruling by the High Court of Zambia, for your ready reference.