Judge Halts KCM Winding Up Matter But Says Arbitration Appeal Has Little Chance Of Success

The Lusaka High Court has today stayed proceedings in the matter where ZCCM-IH is seeking the winding up of Konkola Copper Mines (KCM) pending hearing of Vedanta Resources’  appeal against the court’s refusal to refer parties to arbitration in South Africa.

This, however, does not change the fact that KCM is in the hands of the provisional liquidator, Milingo Lungu, who was appointed by the courts.

High court judge Annessie Banda-Bobo made the decision to stay the proceedings in the winding up matter after hearing arguments from Vedanta and other parties in chambers.

ZCCM-IH, which holds 20 per cent stake in KCM on behalf of the government, petitioned the Lusaka High Court to wind up KCM on allegations, among others, tax evasion and insolvency.

Vedanta Resources, as a contributor, asked Judge Banda-Bobo to refer the matter to arbitration in South Africa in line with the provisions of the Shareholders Agreement signed with the ZCCM-IH.

It argued that the agreement provided for parties to go to arbitration in an event of a dispute.

However, Judge Banda-Bobo, in her ruling of August 7, 2019, refused to refer parties to arbitration saying it was not a proper case for such.

This led Vedanta to appeal to the Court of Appeal and asked judge Banda-Bobo to stay the proceedings before her until the determination of the appeal on arbitration.

In chambers today when the matter came up, Vedanta Resources urged the court to stay the proceedings pending the outcome of appeal, saying not doing so would render the appeal an academic exercise.

Judge Banda-Bobo, in her ruling, said although the grounds set forthwith were not sufficient to convince her that Vedanta’s appeal has prospects of success, she stayed the proceedings in the winding up matter in the interest of justice.

“That being the case, the proceedings are stayed pending the outcome of the matter before the Court of Appeal,” Judge Banda-Bobo said, adding that she believed this would also arrest Vedanta’s concern that its appeal may be rendered an academic exercise in an event that it succeeded.

At the same time, judge Banda-Bobo also heard an application by Vedanta Resources to stay some of the powers of Lungu, the provisional liquidator, on an application filed on June 25 this year.

The application set out specific powers which Vedanta wanted to be curbed and the court initially granted Vedanta an ex parte order to remove certain powers from Milingo but the same was later discharged.

Judge Banda-Bobo has since reserved ruling to a date to be advised.