A landmark judgment by the Supreme Court that creditors who were owed before the enactment of Statutory Instrument 33/99 should no longer be paid at the prevailing interbank rate has thrown a lifeline to perennial debtors such as ZIFA and Highlanders.
The two organisations, who both have legally recognised constitutions, owe their creditors close to $10 million.
This is largely due to the figures being calculated at the interbank rate.
But, a judgment by Chief Justice Luke Malaba, sitting with Judges of Appeal Justice Susan Mavangira and Justice Nicholas Mathonsi in an appeal case by Zambezi Gas, means creditors who were owed before the coming into force of SI 33/19 on February 22, 2019, can only be paid at the rate of one is to one.
The judgment was released on Monday.
Zambezi Gas appealed against a High Court judgement passed on June 25, 2018 that it pay NR Barber (Pvt) Limited the amount claimed of US$3 885 000, together with interest at the prescribed rate, and costs of suit on an attorney client scale.
The appeal listed NR Barber as the first respondent and the Sherrif for Zimbabwe as the second respondent.
Despite noting an appeal against the initial judgment, the High Court dismissed it on May 13, 2019.
"On May 21, the appellant (Zambezi Gas) deposited an amount of RTGS$4 136 806,54 into the first respondent (NR Barber [Pvt] Limited) account as settlement of the judgment debt plus interest and costs of suit.
"The first respondent, through its legal practitioners, wrote to the appellant on the day of receipts of funds, complaining that the amount deposited was less the amount ordered by the court.
"The first respondent said that the amount deposited was equivalent to US$144 788,23. It used the interbank rate as at May 21, 2019.
"The contention was that the appellant still owed an amount of US$3 992 018, 31. The first respondent advised the appellant that it was instructing the second respondent to proceed with the attachment of its property for sale in execution.
"The appellant respondent by a letter dated May 24, 2019, stating that the payment of RTGS$4 136 806,54 satisfied the judgment debt. It referred to the provision of S4(1)(d) of SI 33/19 for authority that the payment was a full and final settlement of the judgment debt," read the court papers.
On July 4, 2019 the first respondent instructed the second respondent to attach the appellant's properties in Hwange to recover the US$3 992 018,31, forcing Zambezi Gas to file an urgent chamber application in the court seeking an order of stay of execution and a declaratory order to the effect that the judgment debt had been fully discharged in terms of SI 33/19.
"The matter of dispute between the parties was the correct interpretation of S4(1)(d) of SI 33/19," Chief Justice Malaba said.
It was the highest court's conclusion that the payment of RTGS$4 136 806,54 made by the appellant as settlement of the judgment debt was a full and final settlement of the judgment debt in terms of S4(1)(d) of SI 33/19.
"In the result it is ordered that the appeal is allowed with no order as to costs. The order of the court a quo is set aside and substituted with the following; the appellant's payment of RTGS$4 136 806,54 is a full and final settlement of the first respondent's judgment debt. There shall be no order as to costs," said Chief Justice Malaba with Justices Mavangira and Mathonsi in agreement.
Reacting to the judgement yesterday, ZIFA said while they sympathised with creditors, they remain guided by the law.
"We are now poised to use this opportunity (Supreme Court judgment) and settle everyone," said the association.