CAUGHT ON THE HOP

A Zambian court has found against the country’s finance minister for failing to set up a crucial market body, as required by law

At the time AB Inbev was merging with Sabmiller in Zambia, a dispute arose with the local securities and exchange commission, which oversees mergers.

The breweries wanted to appeal a decision of the commission, but the body that should have heard the appeal did not exist: it had not been set up by the minister of finance even though it should have panies, amounting to ZK4M and ZK888,000 respectively. AB Inbev applied for a 100% waiver, but only 60% was granted, with the 40% to be paid within 14 days.

The breweries told Lusaka high court judge Susan Wanjelani that they had wanted to appeal this decision to the capital markets tribunal, but could not do so as the tribunal did not exist — its members had not been appointed. So the breweries argued that they had been “denied due process

According to the Securities Act, the capital markets tribunal is “a superior court of record”, with jurisdiction to decide appeals arising from the commission’s decisions, as well as matters relating to misconduct.

From these powers, said the judge, it is clear that anyone who disputes a decision of the commission must appeal to the tribunal — despite the minister’s claim to the contrary.

The law is clear: responsibility for appointing the tribunal’s members lies with the minister, while the minister will appoint the registrar of the tribunal in consultation with the judicial service commission.

Duty-bound

The judge said the breweries wanted the court to compel the minister to act and carry out his duty — something he should have done after the law was passed in 2016. “The [minister] owes a public duty to [the companies] and others in the securities market to establish the tribunal.”

The judge also ordered that the commission’s decision on the authorisation fee be put on hold while the minister considers and finalises appointments to the tribunal.

So far, the decision makes perfect sense. What appears inexplicable, however, is the judge’s conclusion: “Considering the nature of the matter, each party shall bear its own costs.”

As the litigation was necessary because the minister had not done his duty, there seems no good reason for the judge not to order the state to pay the costs of both parties.