MAKWINDI OIL PROCUREMENT (PVT) LTD v NATIONAL OIL COMPANY OF ZIMBABWE 1988 (2) ZLR 482 (SC)

Flynote

Practice and procedure — judgment expressed in foreign currency — whether and in what circumstances court may give such a judgment — date at which amount of foreign currency is to be converted to local currency.

Headnote

The ability of a court to express its order in foreign currency has been the subject of a spate of judicial decisions in England and South Africa. Until 1975, it was settled law in England that a court there could only give judgment expressed in sterling, even if the money of account and the money of payment were a foreign currency and that the date for conversion of the foreign currency into sterling was not the date of judgment or payment but the date of the breach. In Millangos v George Frank (Textiles) Ltd [1975] 3 All ER 801, however, the House of Lords took the revolutionary step of reversing their previous decision on the subject and ruled that where the justice of the case so required the court could give judgment in favour of the plaintiff for the amount of foreign currency due to him or its sterling equivalent at the time of payment. The specific case concerned a claim for foreign money obligation arising under a contract whose proper law was that of a foreign state and where the money of account and payment was of that country or of some country other than that in which the action was brought subsequent decisions made it clear that this rule applied even where the English and not foreign law was the proper law of the contract; and in 1978 the House ruled that the approach followed in the Millangos case was to be extended to claims for damages and restitutions for unjust enrichment.

In the absence of any legislative enactments requiring the courts of Zimbabwe to order payment in local currency only, the innovative lead taken in Millangos and the subsequent extensions to the rule there enunciated should be adopted in Zimbabwe. This would bring Zimbabwe into line with many foreign legal systems.

Fluctuations in world currencies justify the acceptance of the rule that not only may a court order be expressed in units of foreign currency, but also the amount of foreign currency is to be converted into local currency at the date when leave is given to enforce the judgment. To apply any other date could mean that the successful party would suffer an irrecoverable loss. Justice requires that a plaintiff should not suffer by reason of a devaluation of the local currency between the date on which the defendant should have met his obligation and the date of actual payment or the date of enforcement of the judgment.

In claims for damages, it is for the plaintiff to select the currency in which to make his claim. It is for him to prove that a judgment in that currency will most truly express his loss and accordingly most fully and exactly compensate him for that loss. While the currency of account is a factor of importance, it is not decisive of the currency in which the claim should be made and judgment given.