The Supreme Court has ordered that the CEO and executive of the Tongan Development Bank are to remain in place.
The court has ordered that the Development Bank not engage in any economic development activities and joint development agreements without the prior approval of the National Reserve Bank of Tonga.
The ruling came as the result of a dispute between the Development Bank and the National Bank. The ultimate controlling interests of both banks are vested in the government of Tonga.
The National Reserve Bank of Tonga has all the functions of a central bank which includes important regulatory powers. Although the controlling interest of the Reserve Bank is the government it is a separate and distinct body from the Development Bank.
The National bank has sought to overide the development bank by issuing directives that, among other things, removed its CEO, Emeline Tuita and board chairman Pennisimani Vea.
Lord Chief Justice Malcolm Bishop KC, presiding, said the Reserve Bank’s actions were designed to ensure that it closely controlled the Development Bank and had a veto on any of that bank’s activities.
The Development Bank asked for an interlocutory mandatory injunction restraining the National Reserve Bank from enforcing its directives.
The Lord Chief Justice said: “I am in the doleful position of concluding that whatever order I make some harm will irreparably follow.”
“If I restore the CEO and the chairman there is inevitably a danger of friction and unfavourable working conditions.
“Thus, what I have to consider is not the balance of convenience but the balance of inconvenience. What is the least worst solution?
“I am on the current state of the evidence and material before me not persuaded that the supervisory role of the reserve bank excludes supervision of the economic activities of the Development Bank.
“I accordingly order that will be the basis that the CEO and chairman continue in place pending the resolution of this matter at trial.
“I am entirely conscious of the fact that this may make for friction and difficulty but that responsible people, as I accept those in the employ of the Development Bank and the National Reserve Bank are, will be dealt with in a grown-up way.”
