The plaintiff in this matter has issued summons for payment of the sum of EUR6,640,295=94 together with interest and costs of suit.The claim arises pursuant to a default judgment of the Regional Court of Frankfurt entered in favour of Kreditanstalt fur Wiederaufbau (KFW) as against the defendant on 25 July ...
The plaintiff in this matter has issued summons for payment of the sum of EUR6,640,295=94 together with interest and costs of suit.
The claim arises pursuant to a default judgment of the Regional Court of Frankfurt entered in favour of Kreditanstalt fur Wiederaufbau (KFW) as against the defendant on 25 July 2006.
On 20 May 2008, KFW assigned its rights in the judgment to the plaintiff.
The latter then obtained judgment on the Frankfurt award for an equivalent sum in the High Court of Botswana on 5 June 2009.
The defendant has not satisfied either the Frankfurt or the Botswana judgment.
The plaintiff's claim in this Court is founded on the Frankfurt judgment.
The defendant has filed a Plea in Abatement challenging the enforceability of that judgment on various grounds.
At the hearing of this matter, counsel for the defendant abandoned several of these grounds relating to, inter alia, the impact of the in duplum rule on the interest claim, the non-payment of security for costs by the plaintiff as a peregrine suitor, and the non-enforceability of the Botswana judgment. The last aspect was not pursued in light of the concession by counsel for the plaintiff that its claim was premised solely on the Frankfurt award and not on the Botswana judgment.
Following these concessions, the issues for determination in casu are as follows:
(a)...,.
(b)...,.
(c)...,.
(d) Whether part of the amount claimed by the plaintiff before the Frankfurt Regional Court had prescribed at the time that the claim was instituted....,.
Prescription of Claim
According to the defendant, part of the loans founding KFW's claim had prescribed under the law of Zimbabwe by the time that KFW instituted proceedings in the Frankfurt court.
In this regard, the defendant refers the Court to the loan repayment schedules set out in the two loan agreements (Nos. F2971 and F3040) and contends that all the amounts due for repayment on or before 31 September 2001 had prescribed at the relevant time. The defendant further contends that the judgment of the Frankfurt court itself, delivered on 25 July 2006, had prescribed within three (3) years and that the plaintiff's action in this Court, filed on 15 October 2009, was instituted out of time.
I must confess that I find it somewhat difficult to comprehend the defendant's contentions on prescription.
First and foremost, the defendant is unable to state, with any certainty, when the proceedings in the Frankfurt court were instituted, and, therefore, what the cut-off date should be for the purposes of prescription before that court.
Secondly, even if the cut-off date argued for by the defendant is accepted, I note that the repayments due on or before that date constitute only about 20% of all the repayments owing to KFW.
Thirdly, the schedules referred to deal only with capital repayments and there is no indication as to the quantum of interest payable on the loans and the due dates for payment of such interest.
Finally, the ruling of the Frankfurt court (at p.4 of the certified translation) refers to a letter of demand for all amounts owed by the defendant, exceeding Euro 50 million, while the amount actually claimed by KFW in the Frankfurt court is no more than Euro 6.6 million (together with interest).
On these facts, it seems to me virtually impossible to ascertain precisely what amounts were owed under the loan agreements and when such amounts became due and payable. Therefore, without further documentary and oral evidence being lead, any attempt, at this stage, to determine what has prescribed would be an exercise in utter futility.
In any event, quite apart from the aforementioned evidential difficulties, there is considerable merit in the plaintiff's submission that prescription is a substantive matter, and, as such, falls to be determined by the lex causae and not the lex fori: see Laurens N.O. v Von Hohne 1993 (2) SA 104 (W)…,.
Under the loan agreements in casu (Article 10.2 of Loan No. F2971 and Article 9.2 of Loan No. F3040) the loans are governed by the law of the Federal Republic of Germany.
It is that law that is the lex causae and it is that law that determines the question of prescription.
In this regard, the defendant has not adduced any evidence as to the German law of prescription....,.
As regards the prescription of the Frankfurt judgment itself, I concur with counsel for the plaintiff that the effect of that judgment was a novatio necessaria of the original debt sued upon. However, contrary to counsel's submission, such novatio does not necessarily entail the creation of a new obligation. Nevertheless, the clear effect of the judgment is to provide a new right of action enforceable as such: see Commercial Bank of Zimbabwe Ltd v MM Builders & Suppliers (Pvt) Ltd & Others 1996 (2) ZLR 420 (H)…,.
If one applies the prescription law of Zimbabwe to this new right, i.e. section 15(a)(ii) of the Prescription Act [Chapter 8:11], it is evident that a judgment debt only prescribes after 30 years.
In this context, given the all-embracing definition of “debt” in section 2, there is nothing in the Prescription Act to suggest that the prescription period of 30 years applies only to local judgments and does not extend to foreign judgments. Thus, even as regards the Frankfurt judgment, it is abundantly clear that the plea of prescription does not avail the defendant.
