About a week ago Chief Justice Luke Malaba (along with Justice Susan Mavingira and Justice Nicholas Mathonsi) issued a landmark ruling that cemented the government position that US dollar-denominated debts incurred before February 2019 were payable in Zimbabwean dollars at 1:1. I will get into some few details of the ruling but first, let us look at the matter for which the ruling was made. There was a case before the courts in the case of Zambezi Gas Zimbabwe Private Limited, V N.R Barber Private Limited and The Sheriff for Zimbabwe. The Chief Justice ruled that debts in US dollars can be settled at a valuation of 1:1 with the RTGS dollar. The debts in question are those that were incurred prior to the 22nd of February 2019.
A Look At A Portion Of The Ruling
“The Court holds that the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act & Issue of Real-Time Gross Settlement Electronic Dollars (RTGS Dollars)) (“S.I. 33/19”)” expressly provides that assets and liabilities, including judgement debts, denominated in United States dollars immediately before the effective date of 22 February 2019 shall on or after the aforementioned date be valued in RTGS dollars on a one-to-one rate.
The order in terms of which the appellant was obliged to pay the judgement debt owed to the first respondent, denominated in United States dollars, was made before the effective date. The judgement debt and its evaluation fell within the ambit of the provisions of S.I. 33/19…”
Implications Of This Landmark Ruling
I am not going to dwell on how this ruling sets to benefit some bigwigs in privileged circles lest I get all political. Rather I am going to touch on how this ruling actually benefits you (if you are in arrears of some sort). Here is a little practical example to put my point into perspective. I have got a colleague of mine who, some time back, had a tiny disagreement with ZESA. This culminated in him deciding not to pay bills. In the same vein he stopped paying council bills too – he did not see the point of paying for water that is barely ever available. At the end of the day, he ended up with arrears amounting to US$8000. Taking into account this recent court ruling it means he can clear that debt by paying ZWL$13000 instead – which roughly becomes US$300. So it suffices to say that a lot of people can actually benefit from this landmark ruling.
Question Of Widespread Enforceability
It is an interesting thing to observe that many people can leverage on this ruling to settle long-standing debts. However, is this ruling going to be honoured by all or any party involved? There are several factors to look at in terms of this subject. For instance, some (if not, most) of the people might not even be aware of this recent ruling. Those owed might know but capitalize on the ignorance of those who owe them. In some cases, both parties might not be even aware of.
The other issue stems from referencing past events. Consider how a statutory instrument was enacted banning the use of the multicurrency regime. It literally indicated that using foreign currency as a medium of exchange became illegal. Despite that, it was business as usual with business players demanding foreign currency payments or consumers offering to pay using foreign currency. I am saying that to say this, of course, there is this recent court ruling but it can still be defied by some players when it suits them best. This is not surprising because numerous times we have seen some players conducting themselves above the law.
It is worth noting that it took a court case for the obvious to be stated and enforced. How then was this not being followed since it has been so for a while? “…assets and liabilities, including judgement debts, denominated in United States dollars immediately before the effective date of 22 February 2019 shall on or after the aforementioned date be valued in RTGS dollars on a one-to-one rate” – this has been true all along remember. One wonders whether or not that will be honoured without the need to battle it out in court in every case out there. Has anyone of you already settled debts in line with this recent ruling? Kindly let us know in the comments below.