By 
Sums in accounts denominated in US dollars were legally converted to sums denominated in Zimbabwe dollars in terms of a Reserve Bank of Zimbabwe directive when the local currency was reintroduced, the Supreme Court has ruled, overturning a High Court decision last year that threatened a major financial crisis.
The High Court in May last year declared unconstitutional a Reserve Bank of Zimbabwe (RBZ) exchange control directive converting sums in accounts originally designated in US dollars into Zimbabwe dollar-denominated accounts if the money in the accounts originated locally.
The Supreme Court allowed the appeals by CABS, RBZ and Ministry of Finance and Economic Development challenging the lower court’s decision ordering CABS to pay business partners Ms Penelope Douglas Stone and Mr Richard Harold Stuart Beatie the US$142 000 deposited in their business account in US dollars.
The legal fight between the business partners and their bank spilled into the High Court following RBZ exchange control directive RT120/2018 issued on October 4, 2018.
The directive separated the RTGS account, even if it had been denominated in US dollars, from a nostro foreign currency account based on the source of funds, basically whether the money was earned locally or was the proceeds of an export deal.
The concept of the nostro foreign currency account came into existence following RBZ’s Monetary Policy Statement of October 1, 2018.
Aggrieved by the High Court decision CABS along with the RBZ and Finance Ministry took the matter up to the Supreme Court on appeal.
A panel of three judges, comprising Deputy Chief Justice Elizabeth Gwaunza, Justice Lavender Makoni and acting judge of appeal Justice Samuel Nyakudya, found a misdirection by the judge, warranting the superior court to interfere and quash the High Court decision.
Writing the judgment for the Supreme Court, Deputy Chief Justice Gwaunza said a court is duty bound to consider and determine every issue that is placed before it unless such issue has been resolved.
Comments