IMBREX ENTERPRISES (PVT) LTD v STANBIC BANK ZIMBABWE LTD & ANOR

HIGH COURT, BULAWAYO

[Urgent Chamber Application HB 60-16]

February 23 and 25, 2016

MATHONSI J

Bank  –  Nature of banker-customer relationship.

Bank  –  Accounts  –  Summary closure of bank account by bank  –  Customer contracting out of right to reasons  –  Contract allowing for closure of accounts by bank on notice  –  Whether such period reasonable  –  Whether bank obliged to give reasons  –  Freedom of contract  –  Parties bound by their contract.

Bank  –  Money laundering  –  Suspicion of money laundering or terror financing  –  Section 31 (2) of the Money Laundering and Proceeds of Crime Act [Chapter 9:24] proscribes the notification by a bank to its client of a suspicion of money laundering or terror financing.

In dismissing an application impugning a bank’s failure to provide its client with reasons for the closure of the client’s accounts:

Held, that the banker-customer relationship is contractual. The parties are bound by the terms of their contract.

Held, further, that s 31 (2) of the Money Laundering and Proceeds of Crime Act [Chapter 9:24] proscribes the disclosure by a bank to its customer that a suspicion of money laundering or terror financing has been reported to the Reserve Bank.

Cases cited:

Bozimo Trade and Development Co (Pvt) Ltd v First Merchant Bank of Zimbabwe Ltd & Ors 2000 (1) ZLR 1 (H), referred to

Charuma Blasting & Earth Moving Services (Pvt) Ltd v Njainjai & Ors 2000 (1) ZLR 85 (S), referred to

Pereira v Marine and Trade Insurance Co Ltd 1975 (4) SA 745 (A), referred to

Printing Registered Co v Sampson (1875) LR 19 Eq 462, referred to

Universal Merchant Bank Zimbabwe Ltd v The Zimbabwe Independent & Anor 2000 (1) ZLR 234 (H), referred to

Washmate Motors Centre (Pvt) Ltd v City of Harare 2013 (1) ZLR 97 (H), referred to

Legislation considered:

Money Laundering and Proceeds of Crime Act [Chapter 9:24], ss 30, 31 (2)

Book cited:

Willis N Banking in South African Law (1981, Juta & Co Ltd, Cape Town)

P Chitsa, for the applicant

J Moyo, for the first respondent

Second respondent in default

MATHONSI J:

The applicant, a fuel monger operating service stations in Kwekwe and Redcliff, has four business accounts with the first respondent bank. Two bank accounts are United States dollars denominated while the other two accounts are in the South African rand currency. Quite substantial sums of money find their way into those accounts on a regular basis as they are very active accounts. According to the applicant it makes total deposits of between 30 and 50 million rands every month.

The applicant had to apply to the second respondent, on the advice of the first respondent, for permission to deposit its business proceeds denominated in rands, into those accounts. The second respondent gave the green light but in a letter dated 9 November 2015, it counselled caution on the part of the first respondent in the following words:

“The Unit has no objection to you accepting the deposits. Your bank should however, continue to apply the usual KYC/CDD requirements, in terms of understanding the nature of your client’s business and any developments thereto, as provided for under the Money Laundering and Proceeds of Crime Act [Chapter 9:24] (‘the Act’).”

The applicant says that it tried to process a telegraphic money transfer from its account with the first respondent on 1 February 2016. The first respondent delayed processing it and eventually refused to do so. Without any warning and out of the blue, it then advised the applicant by letter of 5 February 2016 that it was closing all the banking accounts of the applicant on 14 days’ notice. The letter reads in pertinent part thus:

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