Online Reporter
Fidelis Munyoro – Chief Court Reporter
Al Shams Global Ltd emerged victorious in a decisive High Court ruling that laid bare serious procedural and legal failings by the Reserve Bank of Zimbabwe, culminating in the lifting of a US$7 million freeze and a sharp judicial rebuke of the apex bank’s conduct.
In a judgment delivered last week, Justice Joseph Mafusire set aside the Reserve Bank’s directive to suspend an account linked to the funds, declaring the decision unlawful, irrational and procedurally unsound.
The court ordered the immediate lifting of the suspension and directed the central bank to bear the costs of the application.
At the core of the dispute lay a US$7 million portion of funds deposited into an account held by Fidelity Gold Refinery with a local microfinance bank.
The Reserve Bank had frozen the account in July 2025, citing concerns over the “source of funds.”
However, the court found that the action lacked both legal justification and procedural integrity, particularly in light of the long-standing financial relationship between the parties.
“The conduct of the first respondent… cannot escape condemnation as being irrational and arbitrary,” Justice Mafusire declared, in a judgment notable for both its legal clarity and candid tone.
From the outset, the court signalled that the dispute was ill-suited for judicial resolution.
In unusual remarks, the judge observed that the matter was less about legal necessity and more about strained relations among powerful actors.
“The parties know it: this was a matter not for the courts. It ought to have been settled out of court,” he wrote. “That it did not, is manifestly an issue of personality clashes and the preservation of self-images.”
The proceedings revealed an extensive financial relationship spanning over two decades, during which Al Shams Global Ltd, a foreign entity registered in the British Virgin Islands, had consistently supplied the central bank with significant hard currency inflows.
The court noted that the Reserve Bank had, in times of economic distress, relied on the company as a critical financial conduit.
“Whenever there is a financial bind… the Governor designs the means and ways to get out of it. From the evidence, one such gateway is the applicant,” the judge observed, underscoring the inconsistency in the central bank’s later suspicion of funds introduced through established channels.
Evidence before the court showed that Al Shams Global Ltd, fronted by business tycoon Mr Jayesh Shah, had imported US$12.1 million into Zimbabwe in two tranches, duly declaring the funds and depositing them in compliance with exchange control regulations.
Despite this, only US$7 million became the subject of scrutiny, a distinction the court found neither logical nor fair.
Justice Mafusire questioned the coherence of the Reserve Bank’s position, noting that it had already acknowledged the funds originated from Dubai while simultaneously demanding further proof.
“Such a stance would stick out as unreasonable and irrational,” he said, pointing to the “documented close contractual relationship and dealings between the parties,” as well as the central bank’s own indebtedness to the applicant.
The judgment further identified serious procedural violations.
The court found that the Reserve Bank had failed to comply with the Administrative Justice Act by neglecting to provide adequate notice, reasons, or an opportunity for the applicant to make representations prior to freezing the account.
“I find that… the first respondent did not comply with [the law]… in regards to providing adequate reasons for its decision,” the judge stated. “Furthermore, it did not give the applicant an adequate opportunity to make representations.”
Compounding these defects was the central bank’s flawed handling of its legal defence. An affidavit submitted by the Governor was struck out after it emerged that it had been improperly commissioned while he was outside the country, rendering it invalid.
The court dismissed the document as misleading and unsupported by admissible evidence. “Arguments from the Bar… cannot be a substitute for sworn evidence,” Justice Mafusire said. “There is no material for the court to exercise any discretion to sanitize it.”
He also rejected attempts to justify procedural irregularities under the guise of modernisation, particularly arguments in favour of virtual commissioning of affidavits. “The first respondent’s argument is untenable,” he held, adding that “for the moment, the… pronouncement by our Supreme Court is the law in Zimbabwe.”
In addressing the broader legal framework, the court concluded that the Reserve Bank had exceeded its statutory mandate by effectively assuming the role of the Financial Intelligence Unit, the body designated to handle suspicious transaction reports.
“It was the first respondent that did not comply with its obligations under the law,” the judge held, emphasising that Al Shams Global Ltd had fulfilled all regulatory requirements, including proper declaration and lawful deposit of the funds.
The court also took issue with the manner in which the case had been presented, suggesting that the real dispute had been obscured by unnecessary legal formalism.
“It is always curious why some litigants… go around in circles when asking for some relief… instead of just going straight to the exact remedy sought,” Justice Mafusire remarked.
In the final analysis, the court cut through those layers to address the substantive issue: the unlawful freezing of funds that disrupted a significant commercial arrangement and impaired the applicant’s operations.
While ruling decisively in favour of Al Shams Global Ltd, the judge declined to award punitive costs, noting that although the central bank’s conduct was flawed, it did not rise to the level of gross misconduct.
