Appeals Court rules in Stanbic’s favour in Savenda case

The Court of Appeal has ruled in favour of Stanbic Bank Zambia in a long-running dispute with a defaulting borrower that sued the bank claiming K192.5 million in damages for loss of business as a result of being registered as a bad debtor with the Credit Reference Bureau.

The case centered on loans made by Stanbic Bank to a procurement and logistics company, Savenda Management Services Limited, in 2008.

On Friday, the court overturned an earlier High Court judgment and ordered Savenda Management Services Limited to pay costs of the appeal, but awarded Savenda Management Services Limited nominal damages of K 5,000.

The case was seen as precedent impacting the amount of risk that banks are prepared to take when lending to customers and thus the amount of debt available to customers.

It called into question an essential tenet of the banking industry’s development, under which banks are able to share information about the creditworthiness of customers.

In a related case, in May 2013 an arbitral tribunal ruled that Savenda Management Services Limited must pay Stanbic US$1.36 million it was owed under a lease buy-back facility for a US$540,000 printing machine.

And Stanbic Bank Zambia Acting Chief Executive Officer Helen Lubamba has commended the judiciary for ensuring that justice has been served.

She has advised customers who were having problems meeting loan repayments to approach the bank for help.