Nedbank Limited v P U Injection Manufacturing (Pty) Ltd and Another

P U Injection Manufacturing (Pty) Ltd (PUI) sought funding for its manufacturing business through Olympus Investments Ltd, a Guernsey-registered company intended to introduce foreign funds as financial rand for PUI’s benefit. Nedbank, an authorised dealer, applied to the South African Reserve Bank (SARB) for release of financial rand, which was approved subject to conditions, including the issue of ordinary shares in PUI to Olympus. Funds were deposited into a financial rand suspense account and partially paid out. In May 1989, SARB attached the remaining funds under regulation 22A of the Exchange Control Regulations. Although attachments must be released within three years unless forfeited, the funds were released only in October 1992 and transferred, via SWIFT message, to a Nedbank account with Olympus as beneficiary. About ten years later, after settling disputes with SARB, PUI demanded payment of the funds from Nedbank, alleging it was the true beneficiary. Nedbank refused, stating the funds had already been paid out, and disputed that PUI had any legal entitlement.

The appeal was upheld with costs, including the costs of two counsel. The order of the court of first instance was set aside and replaced with an order dismissing PUI’s application with costs.

The case confirms that a claimant seeking payment from a bank must prove a clear legal entitlement to the funds, especially in the context of exchange control transactions. It underscores the binding nature of SWIFT interbank messages and clarifies that regulatory approval or correspondence from the Reserve Bank does not itself create private law rights.