HARARE – A Harare lawyer has said serious political consequences were looming for Zimbabwe if Standard Chartered Bank Zimbabwe (StanChart) fails to pay $47 000 owed to a Chinese engineering company.
Tendai Masawi said this on Monday while addressing Supreme Court judges in a case in which China Shougang International is demanding its $47 789,86 from the bank.
In an appeal heard on Tuesday, the bank is contesting a High Court order compelling it to pay the Kwekwe-based Chinese firm.
The bank, through its lawyer Adrian de Bourbon, said the funds had been remitted to the Reserve Bank of Zimbabwe (RBZ) in 2007 at the height of hyperinflation.
De Bourbon said this followed RBZ’s directive for all commercial banks to lodge their foreign currency account balances with the central bank.
“When banks came back to claim their money, the RBZ said they no longer had it, it was gone. The commercial bank here is not liable because of supervening impossibility of performance,” said de Bourbon.
He said action should be taken against RBZ since the funds were not available at StanChart.
However, Masawi told Supreme Court judges Vernanda Ziyambi, Paddington Garwe and Ben Hlatshwayo that there was no nexus between the Chinese company and RBZ.
He told the court that StanChart ought to have sought legal advice before remitting the funds to the central bank.
“It (StanChart) should not have followed blindly to such an illegal directive,” Masawi said.
He further told the court the bank had acted recklessly and has not taken any action against the RBZ to get back the money.
Judges handling the case yesterday reserved their ruling.
Several companies lost funds after their banks sent their money to the RBZ following the central bank’s directive and most have not recovered their cash to date.
In the High Court ruling, Justice Francis Bere said: “It has not been demonstrated to me by respondent’s (StanChart) counsel that the directive by the RBZ was lawful or above board.
“It occurs to me that what respondent did in this case was to blindly expropriate the applicant’s (China Shougang International) deposits without due regard to the law and this was obviously ultra vires.”