Savenda vs Stanbic Bank

Supreme court

In March this year, the Supreme Court delivered Judgment No.10 of 2018 in case of Savenda Management Services Limited Vs Stanbic Bank Zambia Limited.

The background of the case centres on two loans made by Stanbic Bank to Savenda in 2007 where the latter arranged a Stanbic lease buy back facility for US$540, 000 Printing Machine with payment to be made via an over draft.

The matter went through a protracted court process that culminated in the Supreme Court.

Three Judges, namely Nigel Mutuna, Michael Musonda and Evans Hamaundu overturned a high court ruling that had awarded Savenda about US$20 million in costs and damages.

We may not be liked by Savenda, our role is not about who likes us or not but to be a watchdog in matters of corruption and human rights.

We could have easily kept quiet on this matter, but the letter which Mr. John Sangwa. SC wrote to the Chief Justice sometime in April this year, aroused our interests further.

In this letter, Mr Sangwa praised the three Judges overturing the high court ruling. According to him, the three Judges who heard the appeal took time to address a very important issue, which is at the heart of the Judicial process. An issue which has never received serious treatment in any Judgement of the Supreme Court; the Judges’ responsibility in writing a Judgement.

Mr. Sangwa was quick to point out that the most important pronouncement which guided in writing the of the judgment and which illuminated the entire judgement are found in paragraph 209 of the Judgment where the Justices quoted from a book by Dr. Dark Syed Ahmed Idid; writing of Judgments, a practical guide for Courts and Tribunals.

The quote is as equally long as the letter itself.

Another important issue the learned Counsel raised which is very fundamental is that Judgements which are based on unsound law and shaky evidence, often open the Judiciary to undeserved allegations of incompetence and at times corruption. We agree with the learned counsel on this fact and wish to state that the Judgment by the Supreme Court has actually opened the Judiciary to these exact fears.

We don’t don’t agree with this praise by the learned Counsel on this Judgement because we strongly feel that the Supreme Court misdirected itself and erred in fact. This Judgement does not meet the basic standards of a fare and equitable Judgement.

The Supreme Court Justices conveniently chose to ignore Stanbic Bank’s own confession that the apparent default was caused as a result of the failure of Bank’s system. Savenda was servicing the loan as scheduled, but the bank’s system could not capture that. Stanbic even wrote a letter to Savenda about rectifying the problem. Without due care and proper Investigation, the Bank reported Savenda to the Credit Reference Bureau ( CRB) as a deliquescent borrower. Savenda argued that as a result of this action, they lost out on revenue and profits, they lost out on business as they could not borrow anywhere in Zambia to finance their projects.

In September 2016, Judge Justin Chashi, of the High court’s commercial division over turned the Arbitration court’s ruling that had ordered Savenda to pay Stanbic US$ 1.36 million and instead awarded damages to Savenda for losing significant contracts after being reported by Stanbic bank to the Credit Reference Bureau for defaulting on instalments.
Justice Chashi found the non-payments were the bank’s fault and made other findings that will affect relations between other businesses and their bankers.
Savenda said the balance on its loan facility did not reduce despite lease payments, and asked Stanbic to explain.
According to Savenda, during discussions Stanbic officials “acknowledged” the apparent default on the account was caused by a bank problem.

Finding the company had proved its case and was entitled to relief plus legal costs, Justice Chashi referred the matter to the deputy registrar for assessment of the damages due.
After assessment, Savenda awarded K192.5 million (US20 million) in costs and damages.

Perhaps the figure was to high, but for the Supreme Court to trash the Judgment from the trial court based on the grounds as given in their Judgment raises a lot of suspicions.

As opposed to commending the Supreme Court Judgement, we feel strongly that there was a serious miscarriage of justice. The Chief Justice aught to re-look at this matter.
If the rich, such as Savenda could receive such treatment, where does it live the poor.

We are also aware that Stanbic lost a similar case in Nigeria.

However, we re-echoe the Learned Counsel’s words ‘ judgments which are based on unsound law and shaky evidence, often open the Judiciary to undeserved allegations of incompetence and at times corruption.

Gregory Chiffire
Executive Director
Southern African Network on Corruption