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US Dollar debts payable in RTGS Dollars: Supreme Court

By Albert Nxumalo

The Supreme Court of Zimbabwe has made an unprecedented verdict to the effect that debts which were incurred in United States Dollars before 22 February 2019 can now be repaid in RTGS Dollars at the rate of 1:1.

This means that people owed or owing money in US$ transactions dating back to that date can now simply pay them off in ZW$ regardless of the actual value of goods or services.

Chief Justice Luke Malaba sitting  with Justice Susan Mavingira and Justice Nicholas Mathonsi made the ruling in the case of Zambezi Gas Zimbabwe (Private) Limited V N.R Barber (Private) Limited and The Sheriff for Zimbabwe.

“This is an appeal against the decision of the High Court (“the court a quo”) dismissing an urgent chamber application for an order declaring that the payment made to the first respondent in terms of a court order was a full and final settlement of the liability owed by the appellant. The appeal succeeds,” reads the judgment in part dated 20 January 2020.

“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 judgment 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 judges added that the order in terms of which the appellant was obliged to pay the judgment debt owed to the first respondent, denominated in United Stated dollars, was made before the effective date.

“The judgment debt and its evaluation fell within the ambit of the provisions of…of S.1. 33/19. The payment made by the appellant in fulfilment of the judgment debt and final settlement of the liability owed by the appellant”.

However, the use of foreign currency for domestic transactions remains in place in both the formal and informal sectors over six months since the government outlawed the system.

On June 24 last year the government through Statutory Instrument 142 of 2019 banned the multicurrency regime which had been operational for a decade following the ditching in 2009 of the inflation-ravaged Zimbabwe dollar.

The ban meant a return to mono currency – exclusive use of RTGS dollars (bond coins, notes and electronic balances).

Ends/////

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