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MBABANE - In what could be his first case ever since he assumed office, Prime Minister (PM) Russell Dlamini has been taken to court over a law that governs the office of the Financial Services ombudsman.

The impugned sections of the Financial Services Regulatory Authority (FSRA) Act 2005, allegedly give a complainant an unfair advantage and prejudices the respondent, because the latter is bound by the ruling of the ombudsman. The Office of the Ombudsman of Financial Services (OFS) is an independent body, whose purpose is to receive, investigate and make binding decisions on complaints against non-bank financial services providers (FSPs) licensed by FSRA. The services of the OFS are free and accessible to all consumers of authorised non-bank financial services and products. The application challenging the law has been filed by Lidwala Insurance Company Limited, after the ombudsman of Financial Services ordered it to pay Swazi Bandag’s insurance cover after its premises were burnt during the unrest riots in June 2021.


When issuing the order, the ombudsman rejected the argument that insurance companies covered only non-political riots. The ombudsman ordered the insurance company to pay Swazi Bandag’s cover in terms of the multimark policy and the latter’s adjusted claim, according to its Managing Director, Anthony Wright, was E2 225 715.44. The sections of the Act, which are now subject to litigation are Sections 75(2) and 75(3).  The PM, who is the first respondent, has been cited in his official capacity as the head of government, while Minister of Finance Neal Rijkenberg is the second respondent. Other respondents are the attorney general, ombudsman of Financial Services and Swazi Bandag (PTY) Limited. The applicant wants the court to declare the aforementioned sections of the FSRA Act to be inconsistent with Section 20, 21 and 33 of the Constitution of the Kingdom of Eswatini. It is further the applicant’s plea to the court that it should order that the declaration of invalidity be suspended for a period of 24 months, to enable Parliament to correct the inconsistency that had resulted in the declaration of the invalidity.

In his founding affidavit, the applicants Lawyer, Zweli Jele, informed the court that Section 75 dealt with the manner and way in which the ombudsman is to deal with complaints submitted to her. He said subsequent to a complaint being determined, the provisions of Section 75(5) came into operation.   Jele highlighted that Section 75 (5) stipulates that: “The ombudsman shall require the complainant to notify the ombudsman, before a date specified in the statement, whether the complainant accepts or rejects the determination.” He went on to point out that Section 75(3) then determined that if the complainant notified the ombudsman that he accepted the determination, it shall be binding on the respondent and the complainant, and shall be final.  


“The provisions, as it currently stand, give a complainant the exclusive right to accept a determination by the ombudsman, whereby all legal courses for the respondent is effectively blocked, as is the case between Lidwala Insurance Company and Swazi Bandag,” averred Jele.  He submitted that such a result could never had been the intention of the Legislature. He stated that Section 20(1) of the Constitution stipulates that; “All persons are equal before and under the law in all spheres of political, economic, social and cultural life and every aspect and shall enjoy equal protection of law.” It was further his submission that Section 33(1) determines that; a person appearing before any administrative authority has a right to be heard and to be treated justly and fairly in accordance with the requirements of fundamental justice or fairness and has a right to apply to a court of law in respect of any decision taken against the person with which that person is aggrieved.

He told the court that it was clear that Sections 75(2) and 75(3) of the Act infringed upon the abovementioned rights of the applicant as it completely destroyed any right of a respondent to seek redress in the court in the event of it being aggrieved by the determination of the ombudsman. “It is respectfully submitted that the provision is inherently unfair and accordingly against public policy, in that it provides that a respondent to a complaint is bound by a determination made by the applicant thereof and that such determination is final,” he argued.   
This, according to Jele was inimical to fair due process. He further argued that the provision was contrary to public policy, in that it allegedly condemned a respondent to accept an award that it contended was wrong in law.


“Under the circumstances, it is respectfully submitted that Sections 75(2) and 75(3) of the Act are inconsistent with Section 20, 21(10) and 33(1) of the Constitution, as it denies a respondent access to the courts and to have its matter adjudicated upon by a court of law. We, therefore, seek an order declaring the above sections to be inconsistent with the Constitution,” submitted the senior attorney. In his affidavit, Jele then gave the court the genesis of the matter, wherein he submitted that in June 2021, there were political riots in Eswatini and the fifth respondent (Swazi Bandag) alleged that it sustained severe damage, which was caused by the rioters. Swazi Bandag, according to Jele, subsequently submitted a claim to the applicant to be indemnified for its loss.

He said, applicant rejected the fifth respondent’s claim on the basis that the relevant policy did not cover for damages suffered during a political riot. The lawyer mentioned that dissatisfied with applicant’s rejection of its claim, Swazi Bandag submitted a complaint to the ombudsman, who subsequently ruled in favour of it (Swazi Bandag).  He highlighted that Swazi Bandag accepted the ombudsman’s determination on February 17, 2023, and had now approached the court for its enforcement.  The matter which is still pending at the High Court has been referred to a full bench as constitutional issues had been raised in it.

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: Exam questions
Should exam questions be in both English and siSwati?