Daniel Nemukuyu Senior Court Reporter—
THE law that ring-fences Air Zimbabwe Holdings property from attachment over debts is constitutional and must stay because it is meant to save the troubled airline from collapse, Finance and Economic Development Minister Patrick Chinamasa has said. Four former Air Zimbabwe Holdings managers — Stephen Nhuta, Kingstone Mbape, Charles Muchenje and Charles Mhonderwa — got a writ to attach the airline’s property over outstanding retrenchment packages to the tune of $160 000, but Government quickly amended the Finance Act to make the parastatal immune to attachment of its property.
The quartet then filed an application at the Constitutional Court challenging the constitutionality of Section 23 of the Finance Act. Defending the existence of Section 23 of the Finance Act, which was recently amended to protect the assets of the airline, Minister Chinamasa said it was common knowledge that Air Zimbabwe was in serious debt and the striking down of the law was likely to result in the collapse of the country’s sole airline.
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“In support of the public interest and continuity of vital national air services, it should (be) of very little debate that the sole airline’s property be protected from attachment. “Should this fail, the airline would inevitably grind to a halt in the very short term, leaving Zimbabwe with no local airline.
“In the circumstances, it is my view that Section 23 of the Finance Act is not unconstitutional for the reason that it extends immunity from attachment to Air Zimbabwe Holdings, a successor company of Air Zimbabwe Corporation, which successor company is defined as such by the legislature,” said Minister Chinamasa.
The minister said the contested Act does not violate any of the creditors’ rights and that they have other remedies available to them other than attaching property belonging to the airline. “Section 23 of the Finance Act does not infringe the right to equal protection of the law.
“In other words, applicant, instead of attaching assets of national importance, lodges a claim with the Public Debt Management Office established in terms of Section 4 of the Public Debt Management Act (Chapter 22:21) whereupon applicant’s claim will be satisfied from the Consolidated Revenue Fund,” he said.
Minister Chinamasa said the application by the quartet amounted to asking the judiciary to usurp the powers of the executive arm of the State. “Applicant is inviting the courts to usurp the functions of the Executive in determining which assets are regarded as being of vital national importance and ought to be protected from attachment in satisfaction of a private judgment.
“The courts should adopt a dim view of this as an intrusion into the space of the Executive’s function. “The public cannot be stripped of vital assets at the instance of a private litigant. Setting a precedent of that nature would grind the entire State to an eternal halt,” argued Minister Chinamasa.
The four former managers are battling to recover their agreed retrenchment packages from the airline. They argued that the recent amendment to the law scuttled their plans to attach and auction the parastatal’s property.
When the law was passed, the quartet had been offered retrenchment packages by the airline but $160 000 was still outstanding. Writ of execution had been issued by the courts to enable the four to attach and auction the company’s property.
The courts had ruled that at the time in question, the airline’s assets were capable of being attached in execution as it was not a successor company to Air Zimbabwe Corporation. But the recent amendments to the Finance Act now give Air Zimbabwe immunity from attachment.
In the constitutional challenge filed by the four, labour lawyer Mr Caleb Mucheche argued that the law infringed on the rights of Air Zimbabwe workers. The managers argued that Air Zimbabwe Holdings, being a private company, should not be protected under the State Liabilities Act.
Nhuta, Mbape, Muchenje and Mhonderwa had served the airline for periods between 30 and 32 years when they were served with retrenchment letters. The quartet was retrenched in August 2009 with the company citing viability challenges.