Terrence Mawawa|Ms. Miriam Mutizwa, a member of the Friends of SMM (FOSMM), a not-for-profit organisation that was established to promote the rule of law in Zimbabwe, objected to the characterisation by the Attorney General of Zimbabwe, Mr. Prince Machaya, that a reconstruction order is certainly not akin to a judicial management order.
Below is an extract of Prince Machaya’s affidavit in opposing the application by FOSMM to have Reconstruction Act be declared as inconsistent to the Constitution and, therefore, invalid:
It is the AG’s considered view that the effect of the reconstruction order is akin to the concept of judicial management.
“Nothing can be further from the truth. How can an order issued issued in terms of the Companies Act, a law of general application, have the same force and effect with an order that is issued in respect of law that is devoid of any constitutional morality?” asks Mr. Mutizwa.
She further stated as follows: “This morning I was pleasantly surprised to see a posting in the FOSMM group by Hon. Settlement Chikwinya, who is a ranking member of the Parliamentary Portfolio Committee of Mines and Mining Development that the AG appeared before on 19 November 2018, that stated as follows: “Morning mukoma. I would not know about the attitude of the Chair outside the meeting but with regards to the collective attitude of the meeting we are all in agreement that the Act is not only a bad law but more so inconsistent with various positions of the constitution.”
What does the Companies Act say in relation to the circumstances in which provisional judicial management order may be obtained? Section 299 of the Companies Act that reads as follows is instructive:
It is from the above that subject to s 300 of the Companies Act, it is only the court that can issue a judicial order.
Looking at s 300 of the Act, it is also the Court that has inherent jurisdiction to grant a judicial management order as follows:
However in terms of s 4 of the Reconstruction Act, it is the Minister of Justice who is vested with the power to issue a reconstruction in relation to a company as follows:
With respect to the reconstruction order, it is the Minister who is vested with the power to issue a reconstruction order in relation to a targeted company and issue the order by notice in the Gazette. It is also the case that the Minister in his unfettered discretion can issue an order before affording the target company an opportunity to make any representations.
The questions that arise include:
Whether an order issued by a Minister in his discretion without following the limitations imposed by the Constitution in relation to dispute resolutions can have the same force and effect as a judicial order that is issued in relation to provisions of the Companies Act?
Whether the rights and freedoms of shareholders entrenched in the Companies Act to appoint and remove directors can be divested at all outside the ambit of judicial involvement?
Whether the confirmation of an order issued by a Minister can be confirmed by a Court of Law without undermining the rule of law?
Whether a reconstruction order can and should have the properties that a judicial order has?
Whether the AG erred in boldly asserting to Parliament that a reconstruction order has the same properties and rights as a judicial order?
“It can never be too late to learn. When the sword of the Reconstruction Act fell on SMM, it was easily for me to say Mawere deserved it. And then after 14 years, the same sword has fallen on AirZim and Hwange. It is embarrassing that it has taken me this long to know how laws can be created for ulterior motives and yet the authors of such laws can pretend that no constitutional infringements will be occasioned on anyone. In this matter, it is self-evident that the introduction of a law specifically designed to place a creditor outside the rights reserved for all creditors in the Companies Act was mischievous, criminal and predatory,” said Ms. Mutizwa.