The High Court has recognised the liquidation of Namibia's failed Small and Medium Enterprise Bank (SME Bank), paving the way for its court-appointed liquidators to recover assets in Zimbabwe and seek the enforcement of judgments obtained in Namibia.
Justice Siyabona Musithu ruled in favour of David John Bruni and Ian Robert McLaren the joint final liquidators of SME Bank, in an application against the Master of the High Court and MetBank Limited.
The applicants had asked the court to recognise the Namibian insolvency proceedings, recognise them as the bank's liquidators in Zimbabwe, declare that they were entitled to administer SME Bank assets located in Zimbabwe, and allow them to approach the High Court to register and enforce judgments granted by Namibian courts.
MetBank opposed the application, arguing that it was legally flawed, time-barred, incompetent and that Namibia was not a designated country for the registration of foreign judgments under Zimbabwean law.
However, Justice Musithu dismissed all the preliminary objections before ruling in favour of the liquidators.
"The winding up proceedings of the Small and Medium Enterprise Bank Limited are hereby recognised as foreign main proceedings for the purposes of Part XXV of the Insolvency Act," the judge ruled.
The court also ordered that Bruni and McLaren "are hereby recognised as liquidators of the Small and Medium Enterprise Bank Limited (in liquidation)."
Justice Musithu further declared that the liquidators "are entitled to administer the assets of the Small and Medium Enterprise Bank Limited situated in Zimbabwe and may apply to the High Court of Zimbabwe for registration and enforcement of foreign judgments obtained in the Courts of Namibia."
The judge made no order as to costs.
In his judgment, Justice Musithu rejected MetBank's argument that documents filed by the applicants had not been properly authenticated for use in Zimbabwe.
"The court takes the view that the applicants' affidavits were sufficiently authenticated once they were accompanied by the signature and seal of office of the notary public as required by the rules. It was therefore not necessary to seek further authentication from the Zimbabwean embassy," he said.
The court also dismissed MetBank's public policy objections.
"There must be a clear demonstration that recognition would violate fundamental principles of justice, legality or morality recognised by Zimbabwean law. No such evidence has been placed before the court," Justice Musithu said.
On MetBank's argument that Namibia is not among the countries designated for mutual recognition of judgments, the judge said Zimbabwean law does not prevent courts from relying on common law.
"The Civil Matters (Mutual Assistance) Act did not oust existing laws relating to the recognition and enforcement of foreign judgments. While Namibia is not a designated country… the applicants can legitimately approach this court under the common law," he ruled.
The judge found that the legal requirements for recognising the Namibian insolvency proceedings had been met.
"The court is satisfied that the common law requirements concerning the Namibian insolvency proceedings and the appointment of the applicants as liquidators were satisfied and the application must succeed," Justice Musithu said.
The dispute stems from the collapse of SME Bank, a Namibian commercial bank in which the Namibian government held a 65 percent shareholding through Namibia Financing Trust, while MetBank owned 30 percent and World Eagle Investments held the remaining five percent.
In July 2017, the Bank of Namibia successfully applied to the Namibian High Court to wind up SME Bank after it was found to be insolvent, with liabilities exceeding its assets. The liquidation order was confirmed later that year, while an appeal by MetBank and World Eagle Investments was struck off the roll by Namibia's Supreme Court in 2018.
The Zimbabwe application was brought under the Insolvency Act and common law to enable the liquidators to pursue assets linked to SME Bank in Zimbabwe. The court heard that the failed bank has no banking operations or creditors in Zimbabwe, but the liquidators intend to pursue judgment debts through separate proceedings.
While recognising the foreign liquidation proceedings, Justice Musithu emphasised that the ruling did not automatically register or enforce the Namibian judgments, saying any such application would have to be brought separately before the Zimbabwean courts.