Johannesburg, South Africa – South African Airways (SAA) may take unprecedented legal action against the Zimbabwean government over unpaid funds amounting to over $50 million (around R1 billion). The ongoing financial struggle stems from Zimbabwe’s inability to release foreign currency, leaving the funds trapped in the country despite years of negotiations.
The issue came under the spotlight during a recent Parliamentary Standing Committee on Public Accounts (SCOPA) hearing, where SAA officials confirmed the airline’s ongoing struggle to repatriate funds from Zimbabwe, largely from ticket sales.
SCOPA Chairperson Songezo Zibi raised the prospect of attaching Zimbabwean government assets in South Africa as a potential recourse to recover the money.
The Legal Threat of Asset Attachment.
Attaching assets to satisfy a debt involves seizing and selling property belonging to a debtor—in this case, Zimbabwe’s government—located within the creditor’s jurisdiction. South African law permits such actions, but they must be sanctioned by a court of law, meaning that SAA would need to go through legal proceedings to justify the move.
Legal experts suggest that SAA could file a lawsuit in South Africa’s courts seeking a judgment that would allow the airline to seize Zimbabwean assets in the country, such as diplomatic properties, vehicles, or other holdings. However, diplomatic immunity could complicate the process, as embassies and consulates often enjoy protection under international law.
If SAA proceeds, the case could set a precedent for other airlines and foreign businesses facing similar struggles with repatriating funds from Zimbabwe. Since 2016, Zimbabwe has been experiencing a severe foreign currency crisis, which has trapped millions in the country’s banks for numerous international companies.
Analysis of Potential Legal Outcomes
Should SAA pursue legal action, it would first need to secure a favorable judgment from a South African court confirming the Zimbabwean government’s liability for the debt. Such a ruling would then authorize the attachment of assets, provided they are not covered by diplomatic immunity. The seizure of government properties or other high-value assets could follow, though such actions are typically a last resort in international relations.
However, the potential diplomatic fallout between South Africa and Zimbabwe cannot be overlooked. Transport Minister Barbara Creecy has indicated that she will review the matter and may escalate it to a diplomatic level, suggesting that South Africa prefers a negotiated solution over a direct confrontation.
If the diplomatic route fails, legal analysts believe SAA may still face delays, as Zimbabwe could appeal a court decision or negotiate further to avoid asset seizures. Meanwhile, Zimbabwe’s financial situation remains precarious, and it is uncertain whether they can meet the suggested payment plan of $1 million per quarter—an already slow repayment schedule.
Broader Impact on Relations and Business
A decision to attach Zimbabwean assets would likely strain diplomatic ties between the two neighboring countries. Zimbabwe is a key political and economic partner for South Africa, and any enforcement of asset seizure could set a dangerous precedent for future disputes. Other countries may begin viewing South Africa as a potential creditor that will pursue aggressive legal measures, potentially undermining diplomatic norms.
Beyond the political implications, this legal battle highlights the challenges faced by businesses operating in economically unstable environments. For SAA, the ability to recover even a fraction of the $50 million could provide the much-needed liquidity required to fuel future expansion efforts.
Board chairperson Derek Hanekom emphasized the importance of the funds for SAA’s growth, noting, “R1.1 billion is not a small amount of money, and it’s not been easy.”
Chief financial officer Lindsay Olitzski confirmed that an agreement was in place to retain $9 million for SAA’s operations in Zimbabwe, but the bulk of the funds remains tied up. “The remaining $50 million…to date, we have not yet received funds,” she said, highlighting the urgency of the matter.
Diplomatic vs. Legal Resolution
While Transport Minister Creecy weighs the possibility of a diplomatic resolution, SAA’s financial needs and SCOPA’s recommendation point toward a growing willingness to consider legal action. If diplomatic efforts fail, the airline may have no other option than to seek a court-sanctioned asset seizure to recover the trapped funds.
This brewing legal battle could set the stage for future confrontations between companies and governments struggling with currency crises in volatile regions, with far-reaching implications for international business practices.