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.

“Stanbic Bank Zambia commends the judiciary for ensuring that justice has been served. The judgment puts the banking industry back on track after a period of uncertainty, and with the recent Bank of Zambia reduction in base lending rates, borrowing is now becoming more affordable,” said Stanbic Acting Chief Executive Helen Lubamba, who urged customers who were having problems meeting loan repayments to approach the bank for help.

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. The system is a mainstay of banking systems throughout the developed world and was introduced in Zambia in 2006.

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.

0n 31st August, 2017, the bank also obtained a Supreme Court order for Savenda Management Services Limited to pay the arbitration amount and refused an application by Savenda to pay the amount in installments. The Supreme Court also ordered Savenda Management Services Limited to pay Stanbic costs incurred in the Supreme Court and the High Court.