Securities and Exchange Commission v Panex Commodity Exchange Zambia Limited (APPEAL NO 144 OF 2024) [2024] ZMCA 325 (31 October 2024)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT KABWE (Civil Jurisdiction) BETWEEN: APPEAL NO 144 OF 2024 APPELLANT RESPONDENT CORAM: SIAVWAPA JP, CHISHIMBA AND PATEL SC JJA On 14th and 3 1st October 2 0 24 FOR THE APPELLANT: MRS. KAPOTWE-NKONDE WITH MISS. A. N. HALL BOTH IN-HOUSE COUNSEL FOR THE RESPONDENT: MR. S. CHIKUBA WITH MRS. K. SIANGA BOTH OF MESSRS PAUL NORAH ADVOCATES J U D G M E N T SIAVWAPA JP delivered th e J udgmen t of the Court Cases referred to: 1. D ir ector of Public Prosecu tions v. Milingo Lungu and K CM as I nter ested parties (2023/ HPEF/ 1 OJ [2024] ZMH C 3 2. Development Bank of Zambia v. Rhozo Enterprise Limited, Zhoromin 201 7 I HPC/ 0083 Kazhinga and Rodinal Chiweta Kazhinga 3. Zambia Telecommunications Company Limited v. Mulwanda and Ngandwe, SCZ Appeal No 63 of 2009 4. Minister of Information & Broadcasting Services, The Attorney General v. Fanwell Cheembo and Others (2007) Z. R. 207 5. Ngwenya and 8 others v. Chanda and Focus Financial Services Limited, CAZ Appeal No 1 of 2021 6. Rosemary Bwalya, The Attorney General and the Commissioner of Lands v. Mwanamuto Investments Limited, SCZ Judgment No 8 of 7. General Electric Company v Joiner 522 US 136 (1997) 8. Abel Hachaambwa and 2 Others v. Cheelo Mweemba, SCZ Appeal No. 175 of 2016 Legislation and other works referred to: 1. The High Court Act Chapter 27 of the Laws of Zambia 2. The Rules of the Supreme Court of England 1999 (White Book) 3. The Securities (Capital Market Tribunal) Rules, Statutory Instrument No. 32 of 2021 J2 1.0 INTRODUCTION 1.1 This is an appeal against an extempore Ruling of the Capital Markets Tribunal dated 15th June 2023. By the said Ruling, the Tribunal granted the Respondent an order to subpoena witnesses to testify on its behalf and to 2.0 2 .1 produce some documents BACKGROUND This is a second appeal from the decision of the Capital Markets Tribunal. The first appeal was from the Securities and Exchange Commission (SEC) to the Capital Markets Tribunal. 2.2 Following an unfavourable decision by SEC, dated 23 rd December 2019, the Respondent lodged an appeal with the Capital Markets Tribunal on 22nd July 2021. 2.3 By its decision, SEC cancelled the Responden t's Securities Exchange License and blocked its bank accounts, inter alia. 2.4 Before the Tribunal, the Respondent applied to amend its notice of appeal and sought an order to join the Chief Executive Officer of SEC to the proceedings as 2 nd Respondent. The Registrar of the Tribunal dismissed both applications. 2.5 Unsettled by the Registrar's decision, the Respondent filed an application on 19th May 2022 , pursuant to Rule J3 22(2) of the Securities (Capital Markets Tribunal) Rules and Order 3 Rule 2 of the High Court Rules. 2.6 By the said application, the Respondent sought to have the Registrar of the Patents and Registration of Companies Agency, The Manager Stanbic Head Office, the Company Secretary of SEC and the Permanent Secretary of the Ministry of Finance and National Planning (Economic Management and Finance) appear before the Capital Markets Tribunal as witnesses. 2.7 In seeking the order, the Respondent argued that the named officers had first-hand information in relation to the matters in controversy before the Tribunal and their testimony would assist the Tribunal to reach a fair decision. 2.8 In opposing the application the Appellant contended that the intended witnesses would not adduce any relevant evidence that would assist the Tribunal to reach a fair 4.0 4 .1 decision. DECISION OF THE TRIBUNAL The Capital Markets Tribunal heard the application on 15th June 2023 and granted it through an extempore Ruling. J4 4.2 The Tribunal reasoned that the affidavit and submissions raised contentious issues that could only be clarified if 5.0 5.1 witnesses were brought before it. THE APPEAL Dissatisfied, the Appellant has lodged an appeal in this Court fronting the following grounds of appeal: 1. The Capital Markets Tribunal erred in law and fact when it failed to consider the Appellant's submissions that there was nothing on the record establishing the facts in dispute for which the subpoenaed witness were to testify on, which is a prerequisite to the granting of a subpoena application. 2 . The Capital Markets Tribunal erred in law and fact when it failed to take into account that the Respondent did not provide sufficient information establishing a cause or basis on which the witnesses were being called upon to testify. 3. The Capital Markets Tribunal erred in law and fact when it failed to provide a basis for departing from the well-established principle that a witness to be subpoenaed must be called upon to provide relevant information to the issues in dispute before the Tribunal. JS 6.0 6.1 ARGUMENTS IN SUPPORT The Appellant argued the first two grounds together and acknowledged the Tribunal's power to summon witnesses. of its own motion or on an application by a party. 6 .2 It however, argued that for the application to succeed, the applicant must clearly state which disputed facts are to be addressed by the witnesses. 6.3 The Appellant further submitted that, under Order 30 rule 21 of the High Court Rules, the Court will only summon witnesses where it is expedient and reasonable to do so. 6.4 The Appellant referred us to the cases of Director of Public Prosecutions v Milingo Lungu and KCM (as Interested parties)1 and the Development Bank of Zambia v Rhozo Enterprise Limited, Zhoromin Kazhinga and Rodinal Chiweta Kazhinga2 to argue that before the grant of an application to summon a witness, the Applicant must demonstrate that: 1. The affidavit evidence before the Court 1s not sufficient 11. There is an existence of factual issues in contention which necessitate the testing of the veracity of the affidavit evidence; and J6 111. Lastly there should be good and convincing reasons upon which to exercise the discretion to subpoena the deponent for the purpose of cross examination and subpoena witness. 6.5 According to the Appellant, a subpoena must be sufficiently detailed and particularised in order to provide witnesses with adequate information as to the issues in contention. 6.6 The Appellant submitted that the Respondent's application before the Tribunal was oppressive as it lacked any connection to the factual events or the legal issues requiring determination. 6.7 The import of ground three is that the extempore ruling delivered by the Tribunal fell short of the standard set in various precedents as a well-crafted judgment must have a clear introduction, factual summary, legal analysis, findings, reasoning and a conclusion. 6.8 The Appellant relied on the cases of Zambia Telecommunications Company Limited v Mulwanda and Nqandwe, Minister of Information & Broadcasting Services3, The Attorney General v Fanwell Cheembo 7 Others4 and Nqwenya and 8 others v Chanda and Focus Financial Services Limited5 in this respect. J7 7.0 7 .1 ARGUMENTS IN OPPOSITION The Respondent did not file heads of argument in opposition and at the hearing, Mr. Chikuba, applied for leave to file heads of argument out of time. 7.2 According to Mr. Chikuba, the Respondent failed to file within the set time due to a miscommunication within the law firm. 7. 3 Mrs Kapotwe-Nkonde opposed the application on the ground that it was not made in conformity with the Rules of Court. 7.4 We considered the application and dismissed it for lack of satisfactory reasons for the Respondent's failure to file the heads of argument within the set time. 8.0 OUR ANALYSIS AND DECISION 8.1 Having considered the record of appeal, the arguments and the Judgment of the Tribunal, it is our view that the only issue for our consideration is whether the Tribunal was entitled to grant an order to subpoena the witnesses as requested by the Respondent. 8.2 In arguing grounds one and two, the Appellant has contended that the Respondent failed to provide good and sufficient reason for summoning witnesses. In addition, it argued that the Respondent failed to show that there were issues 1n dispute that required witnesses whose J8 testimony would be relevant to the determination of the matter. 8.3 Rule 22 of the Securities (Capital Markets Tribunal) gives the Tribunal discretion to summon a witness following an application by a party. Such discretion must however, be exercised judiciously and for good reasons . (See the case of Rosemary Bwalya, The Attorney General and the Commissioner of Lands v Mwanamuto Investments Limited6 ,) 8.4 Further, Rule 3(2) provides that the practice and procedure in the Court shall apply where the Act, Rules or other written law do not provide for the manner in which the Tribunal may exercise its jurisdiction relating to practice and procedure. 8.5 Section 2 of the Securities Act defines Court as the High Court. In that regard, Section 27 of the High Court Act provides that the Court may summon any person within the jurisdiction to give evidence subject to just exceptions 8 .6 Order 38 Rule 13(1) of the Rules of the Supreme Court 1999 Edition provides as follows: "At any stage in a cause or matter the Court may order any person to attend any proceeding in the cause or matter and produce any document, to be specified or described in the order, the production of which appears to the Court to be necessary for the purpose of that proceeding" J9 8.7 The import of this provision is that the Court must be of the view that the documents to be produced are necessary for the purpose of the proceedings in which they are produced. 8.8 We have perused the grounds on which the Respondent has appealed to the Tribunal appearing in the notice of appeal at page 22 of the record, the affidavit in support at page 26 as well as the draft summons occurring at pages 409 to 419 of the record. 8.9 The whole appeal revolves around the exercise of discretionary power by a Court or Tribunal as the case may be as provided for by the law and when an appellate Court can interfere with the exercise of that power. 8.10 The starting point is that by its very nature , discretionary power is exercised pursuant to the good judgment of the office bearer upon whom it is bestowed. It is not exercised subject to any external authority. 8 . 11 In the case of judicial discretion, according to the Cornell Law School, Legal Information Institute (LII) , Appellate Courts use the abuse of discretion standard to review decisions of lower Courts. It goes further to state that an Appellate court can only find abuse if it finds that the discretionary decision was made in plain error. 8.12 Accordingly, in the case of General Electric Co. v Joiner7 , the Supreme Court held that abuse of discretion J10 standard is the proper standard to use when rev1ew1ng rulings ----. 8. 13 It is also stated that abuse of discretion is when a trial Judge makes an arbitrary or absurd ruling. 8.14 In light of the authorities referred to above, it is clear that for us to overturn the decision of the Court below or Tribunal to subpoena the stated witnesses, it must be clear that the Court or Tribunal abused its discretion and that the decision was therefore, arbitrary and absurd. 8.15 In our considered view, there is nothing from the Ruling subject of this appeal that points to an abuse of discretion by the Tribunal. Neither, has the Appellant demonstrated that the order was arbitrary and the outcome absurd. 8.16 In its extempore Ruling, which is the subject of this appeal, occurring at page 14 of the Record of Appeal, the Tribunal stated as follows; "We note that the affidavit and submissions raise that can only be clarified if contentious witnesses were to be brought before this Tribunal." issues 8.17 In ground three the argument is that the Tribunal's extempore ruling was not well-reasoned as it failed to provide any justification or legal reasoning to support its decision to grant the application. Jll 8.18 In the case of Abel Hachaambwa and 2 Others v Cheelo Mweemba8 , the Supreme Court stated the following: "We must clarify that the poverty of a judgment in terms of style. Syntax or diction, cannot itself ground the success of an appeal. It has to be established whether, on the particular circumstances of the case as presented, a decision of the court is discemable" The Court added that for an appeal to succeed: "It has to be on the efficacy of the reasons assigned by the judge for his decision, or rather the lack thereof' 8.19 In this case the Tribunal stated that the affidavit and submissions raised contentious issues that could only be clarified if witnesses were summoned. 8.20 Our understanding of this is that the Tribunal found the evidence to be adduced by the witnesses to be summoned relevant to the determination of the issues raised in the Respondent's affidavit. The reason for granting the application was therefore stated. 8.21 The Appellant cannot then argue that the Tribunal's reasoning was not disclosed just because it did not summarise the arguments and submissions of the parties 9.0 9.1 within the ruling. CONCLUSION For the reasons stated in this judgment, we are satisfied that the Tribunal exercised its discretion judiciously upon its good judgment that in view of the contentious J12 nature of the dispute , it would benefit from the testimonies of the witnesses subpoenaed. 9.2 We cannot read any absurdity in that position to assign abuse of discretion to the decision. 9.3 We therefore, find no basis upon which to overturn the decision of the Tribunal. We dismiss the appeal accordingly with costs to be taxed in default of agreement. M. J. SIAVWAPA JUDGE PRESIDENT F. M. CHISHIMBA COURT OF APPEAL JUDGE A. N. PATEL SC COURT OF APPEAL JUDGE J13