Zambia top bank ordered to pay US$139 million to Zimbabwe tycoon

LUSAKA, Zambia – A Zimbabwean business mogul Jayesh Shah has won a 24-year legal battle against the Bank of Zambia which has been ordered to pay him US$139,191,386 as replacement for money seized from his company back in 1998.

Shah, who has vast business interests in Zimbabwe, Zambia and India, among other countries, had taken the Zambian central bank to court seeking to have the money back but the case was tossed between the High Court and Supreme Courts of Zambia in a manner described as ‘abuse’ by Justice Edward Luputa Musona sitting at the Zambian High Court.

The businessman initiated litigation together with his company, Al Shams Building Materials Limited.

“Now therefore, I am satisfied that the defendant (Bank of Zambia) breached the agreement of 18 July, 2014 made between themselves and the plaintiffs.

“I order that the agreement be specifically performed by the Bank of Zambia by way of liquidating the judgement debt now standing at US$139,191,386.74 owed to the plaintiffs by the Bank of Zambia as at June 30 202.

The judge ruled, “This is proper particularly that the history of litigation in this case dates back to the year 1998.

“It is 24 years old in courts. It is the Bank of Zambia which has unduly and unjustly perpetuated this case.

“This dispute has been in a back and forth movement, from High Court to Supreme Court.

“This is sad. Litigation must have an end. 24 years in court is too long.

“Bank of Zambia has abused its immunity against execution. This should end because it is not good governance.

“Now therefore, I order that leave to appeal is granted but subject to a deposit by the Bank of Zambia into court of 30% of the judgment sum being US$139,191,386 within the period during which an appeal may be lodged. Parties may proceed to uplift this judgment,” ruled the judge.

According to court documents, on January 16, 1998, Zambia’s Drug Enforcement Commission (DEC) informed Al Shams Building Materials Limited’s bankers, First Merchant Bank Zambia limited and the Attorney General that it had seized the firm’s accounts with over US$1 million pending investigations.

Months later, the bank was placed under receivership and on March 16, 1999, the Bank of Zambia ordered its liquidation.

The businessman and his company then instituted legal proceedings in the Zambian High Court.

On October 12, 1999, the High Court of Zambia ruled that the money should be returned to the owners since the seizure was unlawful and illegal.

The court also ruled that in the case of First Merchant Bank failing to reimburse Shah and his company, the Bank of Zambia would be held liable and in the alternative, the Attorney General was ordered to pay if the funds could not be found.

The bank and the Attorney General appealed against the ruling the Zambian Supreme Court in November 2000.

The appeal was dismissed and the Supreme Court held that Shah’s monies did not form part of the liquidation process and thus liquidation laws did not apply in Shah’s case.

The Supreme Court of Zambia dismissed Bank of Zambia two further appeals on 28th March, 2006 and 31st December, 2012.

Fourteen years later, the Bank of Zambia again approached the Supreme Court, and its case was once again dismissed on May 2, 2014.

After being unsuccessful on appeal four times, thereafter, the Bank of Zambia appealed judgment, 157 days out of time in terms of the laws of Zambia seeking to re-open the 2000 Appeal.

Zambian rules stipulate that a motion should be filed within 14 days of judgment and thereafter a Court Order should be obtained to file the motion after the lapse of the 14 days statutory period prescribed by Statutory Instrument No. 26 of 2012.

Documents show that regardless of a court order granting extension of time, the Supreme Court of Zambia heard the matter and on July 6, 2018, delivered its judgment and held that all issues are res judicata and refused the re-opening of the 2000 Judgment or any other previous decisions.

However the Supreme Court of Zambia in its 2018 judgment after dismissing the Bank of Zambia’s motion and refusing to re-open the 2000 judgment, went on to make new findings that Shah’s monies should be paid, but at the same be paid from the liquidation proceeds and applying the liquidation laws and not from Bank of Zambia’s own resources or state coffers.

This prompted Shah and his firm to approach the Supreme Court, arguing it should not have entertained the motion in October 2014 because it was filed out of time and without leave of court.

A determination is yet to be heard on the Supreme Court proceedings on whether they had lawful jurisdiction to entertain the Bank of Zambia’s July 6 motion filed outside the 14 day statutory period when the Supreme Court of Zambia became incompetent and or functus with effect from May 17 2014.

Enjoyed this post? Share it!