HARARE – MetBank has lost its High Court challenge to stop Zimbabwe from recognising the liquidation of Namibia’s failed Small and Medium Enterprise (SME) Bank, in a ruling that clears the way for the bank’s foreign liquidators to pursue assets and seek enforcement of Namibian court judgments in Zimbabwe.

Justice Siyabona Musithu sittinh at the Harare High Court dismissed every preliminary objection raised by MetBank Limited and ruled in favour of David John Bruni and Ian Robert McLaren , the joint final liquidators of SME Bank appointed by the High Court of Namibia.

Bruni and McLaren had approached the High Court seeking recognition of the Namibian insolvency proceedings, recognition of their appointment as liquidators in Zimbabwe, authority to administer SME Bank assets located in Zimbabwe and permission to apply for the registration and enforcement of judgments obtained in Namibian courts.

MetBank opposed the application, arguing that it was statute-barred, that the liquidators lacked legal standing, that the matter was hypothetical, that the relief sought was incompetent and that Namibia was not a designated country under Zimbabwe’s Civil Matters (Mutual Assistance) Act.

Musithu rejected each of those arguments.

“The winding up proceedings of the Small and Medium Enterprise Bank Limited are hereby recognised as foreign main proceedings for the purposes of Part XXXV of the Insolvency Act,” the judge ruled.

He further ordered that the two applicants “are hereby recognised as liquidators of the Small and Medium Enterprise Bank Limited (in liquidation).”

The court also 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.”

In dismissing MetBank’s objections, Musithu said there was no legal basis to refuse recognition of the Namibian proceedings.

“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,” he said.

The judge also threw out MetBank’s argument that documents filed by the liquidators were improperly authenticated.

“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… It was therefore not necessary to seek further authentication from the Zimbabwean embassy,” Musithu ruled.

On MetBank’s submission that Namibia’s judgments could not be recognised because the country is not designated under Zimbabwe’s reciprocal enforcement legislation, the judge held that the common law still permits such applications.

“The Civil Matters (Mutual Assistance) Act did not oust existing laws relating to the recognition and enforcement of foreign judgments… the applicants can legitimately approach this court under the common law,” he said.

Justice Musithu concluded that the liquidators had satisfied both the statutory and common law requirements for recognition.

“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,” he said.

The court made no order as to costs.

The dispute has its roots in the collapse of SME Bank in Namibia.

In July 2017, the Bank of Namibia successfully petitioned the High Court to place the bank under liquidation after it was found to be insolvent.

The liquidation order was confirmed later that year, while an appeal by MetBank and World Eagle Investments was struck off by Namibia’s Supreme Court in 2018.

SME Bank’s shareholders included the Namibian government, through Namibia Financing Trust, with a 65 percent stake, MetBank with 30 percent and World Eagle Investments with five percent.

The Zimbabwe proceedings were brought under the Insolvency Act and common law to enable the liquidators to deal with any SME Bank assets in Zimbabwe.

Musithu stressed that his ruling only recognised the foreign liquidation proceedings and the liquidators’ status.

Any application to register and enforce specific Namibian judgments will have to be made separately before the Zimbabwean courts.