Camel Mining (Private) Limited v Metbank Limited

On 8 March 2019, Camel Mining (Private) Limited and Metbank Limited concluded a bank loan facility agreement for a maximum loan of USD 200,000 to purchase mining equipment. As security, Camel registered a surety mortgage bond of USD 126,000 and a Notarial General Covering Bond for USD 274,000. Metbank advanced USD 92,000 to Camel. On 29 May 2020, Metbank demanded settlement of USD 130,388.33, stating Camel could pay in USD or local currency equivalent at the applicable interbank rate. On 10 June 2020, Camel paid ZWL 3,470,550 as full and final settlement. Metbank accepted the payment on a without prejudice basis but refused to cancel the surety or release the mortgaged property, insisting on repayment in USD. The parties are both resident in Zimbabwe (incolae). The loan agreement was concluded after the effective date of Statutory Instrument 33 of 2019 (22 February 2019), which introduced the RTGS Dollar as legal tender and required obligations created after that date to be settled at the interbank rate.

• Whether Camel Mining settled its indebtedness to Metbank when it paid ZWL 3,470,550 in local currency
• Whether the obligation between the parties falls under Section 44C(2) of the Reserve Bank Act as a foreign obligation exempt from Statutory Instrument 33 of 2019
• The proper interpretation and application of Statutory Instrument 33 of 2019 (incorporated into the Finance (No. 2) Act of 2019) to obligations created after 22 February 2019
• Whether Metbank's subsequent authorization from the Reserve Bank of Zimbabwe to be paid in foreign currency (dated 3 February 2020) applied retrospectively to the March 2019 contract
• Whether obligations between two Zimbabwean entities (incolae) for domestic operations can be classified as 'foreign obligations'

The application was granted as prayed in the amended draft order. Metbank was required to release the mortgaged property and cancel the surety, as Camel had settled its debt in full by paying the local currency equivalent at the interbank rate.

Where a loan agreement is concluded between two Zimbabwean residents (incolae) after the effective date of Statutory Instrument 33 of 2019 (22 February 2019), the obligation must be settled in local currency at the interbank rate as prescribed by Section 4(1)(e) of the instrument, regardless of the currency in which the loan was originally denominated. Such obligations do not constitute 'foreign obligations' under Section 44C(2)(b) of the Reserve Bank Act merely because the creditor used foreign currency to fund the loan. Clear and unambiguous statutory provisions must be interpreted and applied according to their ordinary grammatical meaning without expansion or contraction to suit the circumstances of any litigant. A subsequent authorization from the Reserve Bank to accept foreign currency payments does not apply retrospectively to obligations created before such authorization, as no law operates retrospectively unless expressly stated.

The court made general observations about the nature of law, stating that 'law is not a static discipline' but moves and changes according to society's stage of development. The court emphasized that where law is clear and unambiguous, it must be taken as it is and should not be overstretched to suit any litigant's circumstances. Mangota J observed that the introduction of Statutory Instrument 33 of 2019 was necessitated by Zimbabwe's inability to print or make available USD in its money market, which presented a formidable challenge requiring legislative intervention. The court noted that the legislature remained alive to the need to compensate creditors when it crafted paragraph (e) of subsection (1) of section 4 of the instrument by allowing recovery of the USD equivalent in local currency at the interbank rate. The court also admonished litigants to display honesty and place all relevant information before the court, including unfavorable evidence, stating that 'honesty is the hallmark of all legal proceedings.' The court criticized Metbank for attempting to import the Breastplate Service v Cambria Africa case while omitting distinguishing facts (that the creditor was registered outside Zimbabwe and the subject matter involved Zambian shares).

This case is significant in Zimbabwean law as it provides authoritative interpretation of Statutory Instrument 33 of 2019 and its incorporation into the Finance (No. 2) Act of 2019, which marked Zimbabwe's transition from a multi-currency system to local currency. It establishes that obligations created after 22 February 2019 denominated in foreign currency must be settled in local currency at the interbank rate, even where parties are sophisticated commercial entities. The judgment clarifies that obligations between Zimbabwean residents (incolae) for domestic operations cannot be classified as 'foreign obligations' exempt under Section 44C(2) of the Reserve Bank Act. It also reinforces the principle that laws do not operate retrospectively unless expressly stated, and that clear, unambiguous statutory provisions must be applied as written regardless of the consequences to parties. The case has important implications for banking, lending, and commercial transactions in Zimbabwe's evolving currency regime.