Monday, 28 November 2016

COURT CASES WILL NOT STOP BOND NOTES

THE existence of pending court cases in which some individuals are challenging the legality of Statutory Instrument 133 of 2016 Presidential Powers (Temporary Measures) Act does not stop the issuance of bond notes as feared, the Reserve Bank of Zimbabwe has said. 

RBZ lawyer Mr Gerald Mlotshwa of GN Mlotshwa and Company told The Herald that in the absence of a court order or an Act of Parliament nullifying the piece of legislation, the central bank can proceed to issue out bond notes and coins today without any hindrance.

“The law on bond notes exists, including SI.133/2016. It has not been set aside by any court. The fact that there may exist before the courts curious, if not ill-conceived, applications challenging the law as it presently stands, does not, by virtue of such actions, suspend the operation of the law.
“As such bond notes, and their issuance, remain lawful and proper until and unless our courts and or Parliament determine otherwise,” said Mr Mlotshwa.

Last week, Judge President George Chiweshe reserved judgment in a constitutional case in which businessman Mr Fredrick Charles Mutanda was contesting the legality of Statutory Instrument 133 of 2016 – the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Bond Notes) that backed the introduction of bond notes.

While the judgment was yet to be pronounced, RBZ announced that bond notes will be introduced today. The Herald newsroom received calls from readers questioning the legality of introducing bond notes before Judge President Chiweshe hands down his judgment.

Mr Mlotshwa, in his response, added that the relief sought by Mr Mutanda was clear in that it accommodated the possible introduction of the notes and coins before the judgment. “In the particular case of Mr Mutanda, he has asked as an interim measure that either the court stop the issuance of bond notes or alternatively, in the event that they have been issued, that the RBZ withdraw them from the market.

“As you have correctly noted, the Judge President after hearing full and extensive argument on the legality and constitutionality of SI 133/2016 reserved judgment to give fuller consideration to what he opined had been a case well argued and presented by both sides.

“In short, therefore, a law is not suspended on account that an ambitious litigant has filed an application in our courts challenging the same,” said Mr Mlotshwa. The law allowing the Reserve Bank of Zimbabwe to issue bond notes and other financial instruments of a similar nature (Sections 7 and 49 of the RBZ Act), Mr Mlotshwa said, has always been in existence and has never been 
challenged.

“The legality of these provisions, forming the primary basis upon which bond notes have been created for the purposes of their issuance, has never been challenged, nor is there any application pending before our courts challenging the ability of the RBZ to create and issue out bond notes on the basis of these two sections.

“Statutory Instrument 133/2016 – the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Bond Notes) bolsters these already existing provisions,” he said.

The lawyer said SI 133/2016 only has the effect of making it the law that one bond note unit is equal to US$1, and providing that bond notes, and coins, are to be considered legal tender. Herald

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