24 Jul South African court orders Zambia to halt liquidation of KCM
The High Court in Johannesburg this morning granted Vedanta Resources an urgent interim order blocking ZCCM from liquidating Konkola Copper Mines (KCM).
The Indian-owned mining company is fighting the Zambian government’s decision, through ZCCM-IH to appoint provisional liquidator Milingo Lungu to wind up KCM operations after government accused Vedanta of breaching the terms of its mining licence.
Today’s interim interdict was granted after two days of argument in court last week, where Vedanta contended that ZCCM-IH had breached and continued to breach the KCM shareholders’ agreement by instituting the proceedings against KCM.
It argued that ZCCM-IH had pushed ahead with the provisional liquidator instead of reverting to the agreed-upon dispute resolution mechanism for shareholder disputes.
South African High Court Judge Leicester Adams said in a ruling seen as a big win for Vedanta that wind-up proceedings must be immediately withdrawn until a final decision is made following arbitration.
“Pending the final determination of the arbitration, the first respondent is interdicted and restrained from taking any further steps in the furtherance and prosecution of the winding up proceedings,” he said.
The granting of the interim interdict means that, pending the final outcome of an arbitration process, ZCCM-IH should immediately withdraw its winding-up proceedings.
It also means that provisional liquidator Milingo Lungu is discharged from office and leave KCM premises.
ZCCM-IH was also ordered to pay Vedanta’s legal costs for three Lawyers who applied for the interdict.
In a statement, Vedanta said it welcomed the ruling by Judge Adams and reiterated its commitment to resolving the dispute with ZCCM-IH via arbitration.
Vedanta had been locked in a dispute with the Zambian government since May when it appointed a liquidator to run KCM, which is 20% owned by ZCCM-IH and the rest by Vedanta.
The legal counsel for ZCCM-IH declined to comment.
It was not immediately clear whether the ruling would be binding in Zambia.
Vedanta said it was unable to comment on the process currently underway in the Zambian courts, in compliance with the guidance provided by Justice Banda-Bobo in the Lusaka High Court on 4 July 2019, after concerns were raised about the parties making public comments about ongoing court proceedings.
Vedanta had sought the urgent order in South Africa to prevent KCM from being wound up, arguing that the dispute should be subject to arbitration, which cannot happen if the Zambian government is pursuing a new investor.
Mines Minister Richard Musukwa last week said that it expects bids for the KCM business to be submitted within weeks by nine companies from Russia, Turkey, Australia, Canada and China.
Source :Lusaka Times