Blessing Kachere v Stanbic Bank Zimbabwe Limited and Old Mutual Investments Group Zimbabwe (Private) Limited

The applicant was employed by UNDP in South Sudan and his USD salary was credited to his account with the first respondent (Stanbic Bank). Between December 2014 and February 2016, he invested a total of USD103,000 into the second respondent's (Old Mutual) Unit Trusts Scheme at his instruction. The first respondent transferred funds from his account to the second respondent's investment account. In January 2019, the applicant decided to de-invest and was informed his investment proceeds (USD91,427.92 as at 24 April 2019) would be paid into his RTGS FCA account rather than his USD Nostro FCA account. The applicant objected, arguing he invested USD and should receive USD. The reclassification meant his investment would be worth less than USD30,000 in real terms. This occurred following the Reserve Bank of Zimbabwe directive RT 120/2018 requiring separation of bank accounts into FCA Nostro and FCA RTGS depending on source of funds, and SI 33/2019 which deemed assets previously valued in USD to be valued in RTGS dollars at 1:1 parity.

• Whether the applicant established a clear legal right to receive his investment proceeds in USD rather than RTGS dollars
• Whether the applicant satisfied the requirements for a final interdict
• Whether the applicant had suffered irreparable harm
• Whether the applicant had an alternative remedy available
• Whether investment scheme managers can be held liable for losses arising from currency changes and market conditions
• The legal effect of SI 33/2019 and RT 120/2018 on assets previously denominated in USD

The application for an interdict against the first and second respondents was dismissed with costs.

To obtain a final interdict, an applicant must establish: (1) a clear legal right; (2) irreparable injury actually committed or reasonably apprehended; and (3) the absence of similar protection by any other remedy. A clear legal right must be grounded in existing law and cannot be based on equity or perceived fairness contrary to legislative provisions. When funds classified as diaspora remittances are utilized by investing them, they lose their character as diaspora funds and take on the classification of the account into which they are transferred. Assets deemed by statute to be valued in RTGS dollars (pursuant to SI 33/2019) cannot form the basis of a claim for payment in USD, unless they fall within statutory exemptions. All subsisting laws are presumed valid and constitutional until successfully challenged and must be complied with regardless of perceived unfairness. An interdict is not available where the respondent's conduct is mandated by law, and an alternative remedy (constitutional challenge) exists.

The court expressed sympathy for the applicant's position, acknowledging the unfairness of the currency conversion regime and the devastating effects of SI 33/2019 and SI 142/2019. KABASA J noted that while the law may not be fair, it remains the law until successfully challenged. The court observed that if every participant who invested in USD demanded repayment in USD, the consequences for investment management companies would be dire and chaos would reign. The court commented that investment schemes by their nature are susceptible to market conditions and attendant risks, and the period when participants invested in USD presented particular challenges given the statutory conversion to RTGS. The court cautioned against awarding punitive costs unless circumstances clearly warrant such censure, noting that the applicant's sense of outrage at losing his investment value was understandable and he was not acting unreasonably, fraudulently or dishonestly. The judgment emphasized that these proceedings were not a constitutional challenge to the validity of the currency legislation, and the court deliberately avoided pronouncing on that issue.

This case is significant in Zimbabwean jurisprudence as it addresses the legal consequences of currency denomination changes implemented through executive instruments (SI 33/2019 and RT 120/2018). It establishes that investment proceeds must be classified according to the legal designation of the account in which they are held, not their original source currency. The judgment reinforces the principle that legislation, even if perceived as unfair or oppressive, remains binding until successfully challenged through constitutional review. It clarifies the distinction between diaspora funds in their original account versus those same funds once utilized for investments. The case also confirms that investment scheme managers are protected by exemption clauses against liability for losses arising from currency changes and market conditions, provided there is no impropriety in management. The judgment provides important guidance on when courts will not grant interdicts against compliance with validly enacted (though potentially challengeable) legislation.