African Banking Corporation of Zimbabwe Limited v Willedit Investments (Private) Limited t/a Knowstics Academy and Others

The plaintiff bank entered into two loan agreements with the first defendant (Willedit Investments (Pvt) Ltd t/a Knowstics Academy), with the second and third defendants (William Mukuwapasi and Edith Mukuwapasi) standing as sureties and co-principal debtors. The first loan was a local currency loan of RTGS11,000,000 concluded around December 2019. The second was a USD-denominated loan of US$467,500 concluded in October 2022, which the loan agreement provided could be disbursed in either USD or equivalent ZWL at the prevailing interbank rate, but was to be repaid in USD in six equal termly installments. The USD loan was disbursed in three tranches in local currency between November 2022 and January 2023. The first defendant made partial repayments in USD but then defaulted. The plaintiff issued summons on 25 July 2025 claiming US$303,258.14 (comprising capital, interest and charges) on the USD loan and ZWG2,715.56 on the local currency loan, plus interest and a declaration making certain immovable and movable properties specially executable. The defendants entered appearance to defend, arguing the local currency debt had prescribed and that the USD loan should be repaid in local currency since it was disbursed in local currency.

• Whether the plaintiff established grounds for summary judgment
• Whether the defendants had a bona fide defence to the claims
• Whether the local currency debt had prescribed
• Whether a loan denominated in foreign currency but disbursed in local currency must be repaid in foreign currency or local currency
• Whether the acknowledgment of debt interrupted prescription
• The interpretation and application of Statutory Instrument 118A of 2022 regarding currency of repayment of foreign currency-denominated loans

Summary judgment granted in favour of the plaintiff. The first, second and third defendants were ordered jointly and severally to pay: (1) US$303,258.14 plus interest at 22% per annum from 25 June 2025 to date of full payment; (2) ZWG2,715.56 plus interest at 60% per annum from 25 June 2025 to date of full payment. Certain immovable properties (three pieces of land in Inyanga and Umtali districts) and movable properties (Science Laboratory Equipment and Centre Pivot Komit Sprinkler) were declared specially executable. The defendants were ordered to pay costs on an attorney-client scale and collection commission in terms of Law Society of Zimbabwe By-Laws.

The binding legal principles established are: (1) Under Statutory Instrument 118A of 2022, a loan denominated in foreign currency must be repaid in that foreign currency notwithstanding the currency in which it was actually disbursed; (2) An acknowledgment of debt, whether express or tacit, interrupts the running of prescription under section 18 of the Prescription Act, and prescription runs afresh from the date of acknowledgment; (3) For summary judgment to be refused, a defendant must establish a bona fide defence by alleging facts which, if proven at trial, would entitle them to succeed - the defence must not be inherently or seriously unconvincing, bald, vague or sketchy; (4) Summary judgment should be granted where there are no real material issues requiring trial and where defences are raised solely for purposes of delay; (5) Courts will not rewrite valid contracts between parties or read into contracts what is not there; (6) A party cannot argue a contract is unfair or claim unjust enrichment where they entered the contract with full knowledge, acquiesced to its terms, performed under those terms, and only challenged them when facing difficulty in performance.

MUSHURE J made several important obiter observations: (1) The judge quoted approvingly from Railings Enterprises v Dowood Services about debtors who "will not settle a debt" and would "rather spend so much on legal fees... defending an unassailable claim all the way to the highest court" even if legal fees surpass the debt, characterizing this conduct as "inimical to commerce" and stating it "should be frowned upon" as it "does not bode well for business and investment in this country"; (2) The judge criticized defendants for "throwing all sorts of vitriol" at the plaintiff and characterized their conduct as "the height of disingenuity"; (3) While counsel attempted to raise constitutional arguments about fairness under section 56 of the Constitution and cited the South African case of Barkhuizen v Napier, the court did not engage with these arguments in depth, noting that counsel conceded he was not actually raising a constitutional issue and that he had conceded the key points regarding the loan agreement and SI 118A of 2022; (4) The court emphasized that summary judgment is "a tool of case management" that "discourages the prosecution of cases with little or no merit" and quoted LORD ROSKILL's observations that "litigants are not entitled to the uncontrolled use of a trial judge's time."

This case is significant in Zimbabwean commercial and banking law for several reasons: (1) It clarifies the application of Statutory Instrument 118A of 2022, which amended the Exchange Control Act to mandate that foreign currency-denominated loans must be repaid in that foreign currency regardless of the currency in which the loan was actually disbursed; (2) It demonstrates the proper application of summary judgment principles and the court's case management function to prevent abuse of process by defendants with no genuine defence; (3) It affirms the principle that courts will not rewrite valid contracts between parties (citing Magodora & Ors v Care International Zimbabwe); (4) It illustrates the application of section 18 of the Prescription Act regarding interruption of prescription by acknowledgment of debt; (5) It establishes that parties cannot resile from contractual terms they previously acquiesced to merely because performance becomes onerous; (6) The case underscores the sanctity of contract and commercial certainty in banking transactions, with the court noting that defendants' conduct of refusing to repay legitimate debts is "inimical to commerce" and detrimental to business and investment.