NBS Zimbabwe High Court Contempt Fine: US$10K Levied for TB Defiance

• Zimbabwe's High Court fined National Building Society (NBS) US$10,000 for contempt of court.
• NBS wilfully and in bad faith refused to surrender a US$5 million Treasury Bill despite a September 2025 court order.
• Justice Faith Mushure ruled that NBS fell under the "in rem" character of the order, which broadly targeted the asset itself.
• NBS's arguments that it was not a party to the original dispute or acquired the TB in good faith were rejected.
• The ruling sets a precedent for enforcing court orders against financial institutions holding assets subject to litigation.

Crucially, the judge determined that paragraph 4 of the order possessed an *in rem* character, meaning it pertained to the asset itself rather than specific individuals, and that NBS clearly fell within the class of persons covered by this broadly framed directive.

The High Court in Zimbabwe has levied a US$10,000 contempt of court fine against the National Building Society (NBS), finding that the financial institution deliberately and in bad faith refused to surrender a US$5 million Treasury Bill (TB). Justice Faith Mushure, presiding over the case, determined that NBS consciously opted not to comply with a September 2025 court order, instead forming its own interpretation that the directive did not apply to its operations, a stance later supported by a legal opinion it obtained. This significant ruling, delivered on September 14, following hearings held on March 3 and September 14, 2026, stems from a protracted dispute involving Stratus Capital Partners, NBS, ADC Capital (Private) Limited, the Sheriff of Zimbabwe, and the Reserve Bank of Zimbabwe.

ADC Capital, however, failed to comply with the initial court order. The company initially responded evasively regarding the whereabouts of the US$5 million Treasury Bill, first claiming it had been integrated into a complex transaction, and later asserting that the details of a subsequent transaction were too sensitive for public disclosure. Stratus Capital Partners subsequently traced the valuable security to the National Building Society, whose Board is chaired by Shingai Mutumbwa. On October 10, 2025, a messenger of the court served the order directly on NBS, instructing the institution to transfer the Treasury Bill within 48 hours.

Initially, NBS informed the sheriff that it did not possess the Treasury Bill through ADC Capital or any other party, stating it had "settled" the security. However, when pressed for further clarification, NBS confirmed its possession of the Treasury Bill. On October 22, 2025, court bailiffs attempted to execute the order against NBS. Their official returns documented that NBS acknowledged holding the instrument but, while claiming ownership, refused to hand over or transfer it. This defiance prompted Stratus to return to court, successfully obtaining an interim order on November 7, 2025, which placed the Treasury Bill under judicial attachment and prevented its disposal.

In her ruling, Justice Faith Mushure found that NBS's refusal to comply was wilful and in bad faith. The judge noted that the documentation surrounding the Treasury Bill was "riddled with gaps" and that NBS had failed to provide sufficient evidence to substantiate its claim of having acquired the security in good faith and for value. NBS had argued that it could not be held in contempt because it was not a party to the original proceedings between Stratus and ADC Capital, maintaining that it had "acquired the TB in its own right and it could not be deprived of the security without being heard." However, the court unequivocally rejected these arguments.

Justice Mushure emphasized that the original order's wording had been deliberately framed broadly precisely because ADC Capital had refused to disclose the Treasury Bill's location. She clarified that the primary objective of the relevant paragraph in the order was to restore possession of the US$5 million Treasury Bill to the applicant, Stratus Capital Partners. Crucially, the judge determined that paragraph 4 of the order possessed an *in rem* character, meaning it pertained to the asset itself rather than specific individuals, and that NBS clearly fell within the class of persons covered by this broadly framed directive. This finding underscores the court's view that the National Building Society contempt order was applicable despite NBS's claims.

This Zimbabwe Justice Faith Mushure ruling establishes a significant precedent regarding the enforcement of *in rem* court orders against third parties, particularly financial institutions, within Zimbabwe. The High Court's decision clarifies that entities like NBS cannot evade compliance with orders concerning specific assets by claiming they were not original parties to the proceedings or that they acquired the asset in good faith. The finding of wilful and bad faith refusal, coupled with the US$10,000 NBS Zimbabwe High Court contempt fine, sends a clear message about the serious consequences of financial institution defiance of court orders.

The judgment reinforces that broadly framed court orders, designed to secure specific assets like the US$5 million Treasury Bill in the Stratus Capital Partners Treasury Bill dispute, are enforceable against any party found to be holding the asset, regardless of their direct involvement in the initial litigation. This ruling has substantial implications for compliance officers and legal counsel, highlighting the imperative for financial institutions to diligently assess and comply with *in rem* court order enforcement in Zimbabwe, even when they perceive themselves as third parties.

This ruling establishes a significant precedent regarding the enforcement of *in rem* court orders against third parties in Zimbabwe, particularly financial institutions. Lawyers and compliance officers must advise clients that claiming good faith acquisition or not being a party to original proceedings does not exempt them from complying with broadly framed orders concerning specific assets, carrying substantial contempt of court risks.

Source: Original reporting via AllAfrica Zimbabwe