In a landmark ruling, the Supreme Court of Namibia clearly defined the delegation of powers in an administrative set-up to the Bank of Namibia (BoN).

The bank decided to appeal in the apex court after the High Court ruled that it was not entitled to delegate the powers delegated to it by Treasury to an employee. 

This came after one of the BoN’s employees unilaterally decided to freeze the bank accounts of six entities which were authorised to trade in United States’ (US) dollars with their Angolan customers. 

The bank, through its acting director of exchange control and legal services Penelao Kapenda, received information about irregular dealings about the US receipts, and launched an investigation.

She concluded that dodgy dealings were afoot, and instructed their bank to freeze their
accounts. 

Not satisfied with this action, the six entities approached the High Court for relief to set aside Kapenda’s decision, which was granted. 

The High Court found that, based on the rule that delegated powers cannot be delegated further, the BoN could not delegate the powers it bestowed upon it further to Kapenda. 

As she was not vested with the discretionary power to block the accounts, the High Court reversed her decision, and declared it unlawful.

Not satisfied with the ruling, the BoN and Kapenda appealed the decision to the Supreme Court. 

Three judges of the appeal court found that in this instance, the BoN was not empowered to delegate the functions of its board or employee. 

Judge Theo Frank, who penned the appeal ruling, with the concurrence of Chief Justice Peter Shivute and Deputy Chief Justice Petrus Damaseb, stated that the authority to regulate currencies and exchange is vested in the President, who may authorise any person to execute those duties on his behalf.

 In this case, it is the Treasury, headed by the minister of finance, who in turn may delegate such power to the central bank. 

In short, the judges stated, the BoN is headed by its board as the ultimate decision-maker. 

However, because it does not run the day-to-day affairs of the bank, the governor is in control, and has the power to sub-delegate certain powers. 

The judges said when regard is had to the present matter, the delegation is wide, and covers a big portion of the administration of forex regulations, which is inclusive of a discretionary power when it comes to the blocking of accounts. 

“The effect of the discretionary power granted to the BoN relating to the blocking of accounts may have far-reaching, deleterious effects on persons whose accounts are subject to blocking orders. It thus seems from a practical day-to-day position, that it was impractical for the board of the BoN to administer the powers and functions of the forex regulations. It would be more expedient if it were done under the control and supervision of the governor. 

In other words, in view of the deleterious effect of the booking of accounts, no delegation other than to the governor can be implied from the delegation to the BoN by the minister of finance in respect of forex regulations,” the judgement reads. 

The judges stated that the discretion to block an account remains, and must remain, with the board or the governor. 

In the end, the Supreme Court upheld the High Court order with costs on the scale of one legal practitioner. 

The BoN was represented by Advocate Natasha Bassingthwaighte, assisted by advocate Tuhafeni Muhongo. 

The entities were represented by Sisa Namandje, assisted by Matilda Jankie.

-rrouth@nepc.com.na