Cash mongers popularly known as money changers on the parallel market will be put behind bars once the Commercial Court which is on cards is established, the Reserve Bank of Zimbabwe governor boss Dr John Mangundya has said.
The Herald reported that government through the Judicial Services Commission is finalising administrative mechanisms for establishment of the Commercial Court, which will prosecute offenders for commercial crimes, among them externalisation and illegal trade in cash.
“Once the court is put in place, many dealers peddling cash on the parallel market, taking advantage of cash shortages to fleece the public, face jail. Government had put in place the necessary legal framework for the establishment of specialised courts to deal with commercial disputes, in line with efforts to improve the ease of doing business in the country,” Dr Mangunya was quoted as saying.
He said commercial courts were critical in emerging markets seeking to attract foreign direct investment since they facilitated faster resolution of disputes.
“The court is set to prohibit all illegal buying and selling of money and assist in reducing the backlog at the general courts, while also improving the ease of doing business,” said Dr Mangudya.
The court will be up and running by the end of this year.
“The Commercial Court, expected to be operational before the end of this year, will also deal with issues of multi-tier pricing,” the RBZ boss said.
The central bank chief said the establishment of the Commercial Court would boost foreign direct investment into the country.
Investors, he said, would be assured that their investments would be protected by law and that any disputes would be resolved swiftly.
“Its presence will ensure that commercial disputes are dealt with and finalised expeditiously,” Dr Mangudya said.
“Most jurisdictions have created commercial courts in their judicial systems and they have benefited from the ratings of their countries by the World Bank. Zimbabwe will obviously reap the same benefits.”
For a very long time, there was no law which prohibited the selling and buying of money, but the establishment of the commercial court will outlaw the practice.
Last year, Government proposed the establishment of the Commercial Court, which it said would be a specialised division of the High Court of Zimbabwe.
Chief Justice Luke Malaba said he hoped the new Commercial Court would be a truly stand-alone court and that it would be located away from the High Court.
Commercial courts are considered a competitive advantage for emerging markets desperate for FDI as they facilitate speedy resolution of disputes. Zimbabwe’s neighbours, Zambia, Lesotho, South Africa and Mozambique have already established commercial courts.
According to the World Bank — which annually publishes the Arbitrating and Mediating Disputes indicators that assess the legal and institutional framework for commercial arbitration, mediation and conciliation regimes in 100 economies — an effective commercial arbitration regime is a matter of priority for foreign investors.
The World Bank noted in its 2016 report that commercial contracts were increasingly complex and often required reliable, flexible dispute resolution mechanisms.
The report went on to say that commercial arbitration and other alternative dispute resolution mechanisms give the parties the autonomy they need to create systems tailored to their disputes.
“In addition, foreign investors view arbitration as a way to mitigate risks by providing legal certainty on enforcement rights, due process and access to justice,” the World Bank noted in its 2016 report.