MBCA Bank Limited and Others v Zimasco (Private) Limited

Four financial institutions (MBCA Bank Limited, African Banking Corporation of Zimbabwe Limited, Central African Building Society, and Nedbank Limited) advanced separate loans to Zimasco (Private) Limited totaling over $30 million on different dates. The respondent provided a slag dump situated at 1 Birmingham Road, Mbizo Township, Kwekwe as security for each loan, registering Notarial Special Covering Bonds for each advance. On 21 December 2015, the respondent filed an ex parte application for judicial management (HC 12220/15), which was dismissed on 13 January 2016. The applicants noted that the slag dump was not reflected on the respondent's balance sheet and became concerned about its value. On 15 January 2016, the applicants met with the respondent and made five demands regarding the slag dump. When the respondent refused to comply, the applicants filed an urgent application on 26 January 2016 seeking to interdict the respondent from working on the slag dump and to perfect their security. The respondent had filed a second judicial management application (HC 311/16) which the applicants opposed on 19 January 2016.

• Whether the urgent chamber application was properly before the court given defects in the deponent's authority to swear the founding affidavit
• Whether the application was urgent or constituted self-created urgency
• Whether the applicants could sue as a group in the absence of a concluded inter-creditor agreement
• Whether the relief sought was competent in light of the nature of the Notarial Special Covering Bonds already registered
• Whether the applicants demonstrated sufficient respect for court processes

The urgent chamber application was dismissed with costs.

1. An application by multiple corporate applicants must be supported by proper authority showing that the deponent is authorized by all applicants to swear the founding affidavit; failure to produce such authority renders the application not properly before the court. 2. Delay of one month from when the cause of action arose constitutes self-created urgency and defeats an urgent application. 3. In the absence of a concluded inter-creditor agreement, multiple creditors who advanced separate loans to a debtor on different dates cannot sue as a group or collapse their various separate contracts into one composite contract. Each creditor must enforce its own contract individually. 4. Principles of contract law do not permit creditors to unilaterally combine separate contractual relationships for enforcement purposes.

The court observed that the applicants' conduct did not resonate with entities genuinely seeking to protect their interests, noting that despite stating the respondent was in financial distress and the slag dump security might be valueless, they did not indicate they wanted to sue for recovery of amounts owed. The court also commented negatively on the applicants' claim to respect court processes, finding this claim inconsistent with their actual conduct in filing the present application while a second judicial management application (HC 311/16) was pending.

This case is significant in Zimbabwean banking and security law for establishing important principles regarding: (1) the requirements for proper authorization in applications by multiple corporate entities seeking to act jointly; (2) the standards for urgency in urgent applications, particularly concerning self-created urgency arising from delayed action; (3) the necessity of formal inter-creditor agreements before multiple creditors can sue jointly against a common debtor, even where they hold similar security over the same asset; and (4) the principle that separate contracts concluded on different dates cannot be unilaterally collapsed into a composite contract for litigation purposes without agreement. The judgment reinforces procedural requirements and the sanctity of individual contractual relationships in commercial lending.