Manojkumar Jivan v Salzman Et Cie SA & Anor

In 2014, Salzman (a company allegedly incorporated in Panama with principal place of business in Switzerland) sued Jivan and six others for USD845,000.00 loan repayment. The matter was compromised by a Deed of Settlement in June 2016. On 22 June 2016, the High Court issued a consent order requiring Jivan and another to pay USD440,000.00 plus interest in instalments with an acceleration clause. Default occurred and by 22 February 2019 (the effective date of S.I. 33/19), USD540,000.00 remained outstanding. On 7 April 2021, Salzman sued out a writ of execution and the Sheriff attached Jivan's house. Jivan paid RTGS540,000.00 through the Sheriff, arguing this satisfied the debt at the 1:1 conversion rate mandated by S.I. 33/19. Salzman rejected the payment, arguing its debt was a "foreign loan or obligation" exempt from the parity conversion under s 44C(2) of the Reserve Bank of Zimbabwe Act.

• Whether the judgment debt constituted an 'outstanding obligation' subject to S.I. 33/19's 1:1 conversion rate from USD to RTGS dollars
• Whether the debt qualified as a 'foreign loan or obligation' exempt from the currency conversion under s 44C(2) of the Reserve Bank of Zimbabwe Act
• Whether payment of RTGS540,000.00 extinguished the USD540,000.00 judgment debt
• Whether the judgment had become superannuated and required revival
• Whether a legal practitioner can depose to affidavits on behalf of a client beyond procedural matters
• Whether new causes of action can be introduced in an answering affidavit
• The effect of a compromise agreement/consent order on original debt obligations

The court declared: (i) The judgment debt in HC 7916-14 constituted an outstanding obligation on 22 February 2019 subject to s 4(1)(d) of S.I. 33/19 and is payable in local currency at a rate of 1:1; (ii) The payment by applicant of RTGS540,000.00 to the Sheriff on 5 April 2021 to the credit of first respondent fully settled and extinguished the judgment debt; (iii) The first respondent (Salzman) shall pay the costs of suit.

The binding legal principle is that a judgment debt expressed in United States dollars that existed as an outstanding obligation on 22 February 2019 falls within s 4(1)(d) of S.I. 33/19 and is subject to conversion to RTGS dollars at a 1:1 parity ratio, unless it falls within the specific exemption in s 44C(2) of the Reserve Bank of Zimbabwe Act for 'foreign loans and obligations denominated in foreign currency'. The exemption is not triggered merely by the foreign status or domicile of the creditor, but requires proof of the foreign character of the loan itself. Where a debt has been reduced to a consent order, the court examines the order itself to determine the nature of the obligation, not the underlying agreements or original cause of action, as compromise agreements extinguish previous obligations and create res judicata. The origin of the liability is not a criterion for exclusion from the currency conversion provisions.

The court made several procedural observations: (1) litigation is not a game of wits but a serious process to resolve legal disputes; (2) while it was irregular for Salzman to file the counter-application both under a separate case number and together with the notice of opposition, this caused no real prejudice and was not fatal; (3) a legal practitioner may depose to affidavits beyond merely procedural matters where they have personal knowledge of facts inexorably linked to the issues for determination; (4) the court warned against introducing new causes of action in answering affidavits, describing it as 'hitting below the belt' and leaving opponents without opportunity to reply; (5) the court noted that S.I. 33/19 had 'far reaching consequences' and 'profound effect', causing some citizens to suffer 'gigantic losses' while others gained 'enormous advantages' through the man-made rather than market-driven 1:1 conversion ratio.

This case is significant in Zimbabwean jurisprudence for its interpretation and application of S.I. 33/19 and the Reserve Bank of Zimbabwe Act provisions on currency conversion. It clarifies that: (1) the exemption for 'foreign loans and obligations' under s 44C(2) depends on the character of the loan itself, not merely the foreign status of the lender; (2) where a debt has been reduced to a consent order, the court looks to the order itself rather than underlying agreements to determine the nature of obligations; (3) compromise agreements create res judicata and extinguish original causes of action; (4) the origin of liabilities is not a criterion for exclusion from S.I. 33/19 currency conversion provisions. The case demonstrates judicial interpretation of controversial monetary policy changes and their retrospective application to existing debts, with significant implications for creditors holding pre-existing USD-denominated judgments.