Vedanta Resources has applied for an urgent court order in South Africa to prevent ZCCM-IH from winding up its disputed Konkola Copper Mines (KCM) business.
Vedanta is locked in a dispute with the Zambian government, which accuses KCM of breaching the terms of its licence.
Vedanta denies that KCM has broken the terms of its licence and says it will defend its assets in Zambia.
Vedanta said in a statement that it had obtained a temporary order in South Africa’s High Court allowing it to make an urgent request on July 16 for an injunction against ZCCM and Mr Milingo Lungu in his capacity as provisional liquidator of KCM.
“Vedanta will seek an interim court order declaring that ZCCM has breached the KCM shareholders’ agreement by pursuing winding-up proceedings against KCM in Zambia, and directing ZCCM to withdraw those proceedings,” the statement added.
In other words, if the Urgent Application, to be heard on 16 July 2019, succeeds and an interim order is granted, the order will remain in place until the arbitration – to be instituted in due course – has been finally resolved.
Vedanta applied to the South African court because the KCM shareholders’ agreement makes provision for arbitration in South Africa.
Oh dear, now this. My country first right or wrong bcos I am Zambian but that is not how the rules that govern international business work. Soon it will be clear who is liable for what and how much. Needles fight this one is.
Ati we will select new investor by end of July….
This will not end well for Zambia.
Rules and laws are there for a good reason.
The PF are truly doing their best to destroy Zambia.
Kikikikikikijukija
Vendetta is a court in SA that special. Why not try Malagasy or Kenya or South Sudan, or Angolan courts.
This Zambians Government has really knocked this boasting Nsamya down ai.
Sorry, sorry, sorry.
Jurisdiction at shani apo.
South Africa has no jurisdiction over Zambia … we are a sovereign state. Vedanta and South Africa can go hang.
Epo mpelele … let’s roll!!!
BRM
Nemwine
Sancho!!! If I may ask, who compensated Lapgreen over Zamtel takeover,a then separate legal entity from Lapgreen but domiciled in Zambia? Was it Zambian courts or foreign (international) courts ? Is Zambia not liable to international laws? ZCCM-IH as a shareholder in KCM have a weak locus standi because they had/have board representation and if anything they are part of the mess KCM is going through.Who are they kidding? If ZCCM-IH did not have board representaion,the laws of natural justice will certainly favour them.What ZCCM-IH are doing is tantamount to failing to accept responsility for their failure and play the blame game on their partners(VEDANTA) and yet were making collective decisons.I hate being a pessismist or a prophet of doom,however I saw this coming like…
I hate being a pessismist or a prophet of doom,however I saw this coming like everybody else saw the Zamtel saga.You cant just abrogate international laws without due diligence.
Look at JUNIOR ..surely thats all you can say your Lazy Lungu has breached the terms of its license because he is eager to appease his new bosses the Chinks!!
Ba Mumba jr naimwe.. if you don’t want to follow international law and feel you are so sovereign, then stop inviting these international infesters to your country. Empower your local people to run these industries. But since you have failed to empower your own people over 50 years after independence to run a simple mine, you will dance to the tune of international law and courts over a simple KCM issue. And even when you get your KCM back you still want to give it to Chinese to run, seriously??Then what is the meaning of education in Zambia suwa? Where are the mining engineers UNZA school of mines and CBU has been producing for over 30 years now? Can’t they run this mine? We really are not serious…
International business/investment has a long history. There hv been examples of unfairness in the past whn assets hv been seized by host govts without compensation or proper compensation. To guard against this international investment law and practice has provided for international dispute resolution in neutral countries to guard against hometown decisionmaking by courts in some jurisdictions. Hence Lapgreen issue and KCM issue in SA.
For the curious, check this Harvard Business Review article in the 1980s INTERNATIONAL INVESTMENTWHEN HOSTS CHANGE THE RULES. I read it over two decades ago in graduate sch so my memory may not be accurate.
Sharp shooter : We’re both realistic patriots. We both love our Zambia but we recognise that it’s part of the wider world. Late Sata when seizing Zamtel just sent armed police to throw out the Ugandan CEO without any warning or court process. This was cheered on by the praise singers but Lapgreen went to international arbitration and Zambia was found liable. I thought ECL as a lawyer president would learn at least one lesson from that.
We warned you and you clueless drunk in statehouse
He said he was the top Law student in his class…really laughable…Mike Mulongoti was right about this chap!!
We have competent lawyers and courts right here in Zambia. It simply shows how Vedenta distrust us and they are not willing to spend a single ngwee in Zambia.
Anyway, they are not going anywhere, I can promise them that.
Which “competent court”???
Lazy
Emotions is not a justification to break international laws.
The real reasons PF want to grab KCM is not because they want citizens to benefit.
Did they even share those Euro bonds with you ? No. They have failed to account for it.
Wake up
Ka INDIGO
KCM hasn’t been bringing back “any cent” from copper sales proceeds into the our country. They turned VAT into their MAIN INCOME, hence, their debt accumulation.
Surely, investor would operate on borrowing VAT REFUNDS and continuously accumulating LOSSES on their Balance Sheet!
WHICH COURTS NAWE, YOUR MOTHER’S COURTS.
Bwafya all because of incompetence and greed by a few who have no foresight for the country. So painful to watch. Let Zambians run the mines, with the right attitude and determination we can do it. No foreign entity will ever have the interest of Zambians at heart and this is the reality that the government must wake up to. How does a foreigner sue you for what is naturally and justifiably yours??????
My point you are right. If Africa has to develop, Africa has to start developing and valuing its people. Surely, you expect a foreigner to come and develop your country, are we serious? I always wander where all the mining engineers UNZA and CBU has produced are. With support, can’t they surely run these mines?
Even when they get that KCM back, they still want to give it to the Chinese. Are we serious? How stup..d is this? Why can we empower our own for ones??
Clowns.Vedanta is so irritating. The last time I checked, the mine (KCM) is situated in Zambia, mineral resources owned by Zambians, a Sovereign state whose Laws and Courts are the final adjudicators and not a foreign Court in a foreign land !! the SA Court does not have jurisdiction over matters before my countries Court and would not dare issue our court with an instruction. This is a LIQUIDATION of KCM under Zambian law because KCM , under your instructions, has RIPPED and screwed everyone (investors, tax authorities, Pensions, suppliers,contractors, financiers) to the point the you FAILED to honour agreements and FAILED to pay the huge DEBT amounting to $millions if not $billions! No one is discussing you useless shareholder agreement with ZCCM nor Sale agreement with GRZ where you…
According to the report, there is an arbitration agreement. Arbitration clauses are binding and the courts in Zed will probably be bound and enforce the finding of the South African arbitrator( SA Court). Question here is which Zambian leader allowed for such a clause in the original contract? Yaba!!!!
Loadist: ZCCM-IH knew wht they were doing and hv always been aware of the agreement regulated the relationship wth Vedanta. How can a minority shareholder with board representation petition for liquidation of a company without the backing of the board of directors? Natural justice would favour a minority shareholder without a voice on the board and therefore independent from its decisions.
The documents you refer to, waivers and clauses contained therein governed the ongoing relationship between the ZCCM, MoM and Vedanta. KCM is NOT Vedanta and is a separate legal person. It, as any Company is Zambia, IS NOT excluded by law from a petition to wind up / liquidate by a Creditor, if it (KCM not Vedanta) HAS FAILED OR NEGLECTED to pay its obligations and debts as they fall due, simple. Which part of this do you and vedanta not understand! No one cares or is interest in any sale, shareholder or arbitration agreement as its clauses are irrelevant to the petition or action before the High Court of Zambia, the only court of jurisdiction for the matter before it (insolvency,debt default). Not that foreign court.
Digga: ZCCM-IH as shareholder with a board voice approved KCM’s accounts where they expected the company to continue in business at least for the next 12 months. What will become of this approval of the accounts by the directors representing govt interest? This is what Vedanta will use against ZCCM-IH. They will call for board minutes of meeting just before this problem and they will ask why ZCCM-IH ddnt make known its disatisfaction under “any other business”.
Further, ZCCM-IH as a board member was party to whatever decisions KCM has been making because boards are held accountable as a collective. How will they wash their hands off that? Facts aren’t always pleasant. Look, it doesn’t look good for Zambia.
Just start empowering local Zambians to start running these industries then you will have no such problems. Problem you look down on your own and think that foreigners are better. This is what you get. UNZA has been producing mining engineers for years. Empower them to run our mine, not to work as spanner-boys for the whites and Indians in our mine. Let them run these mines. They will get better with time..
This is chipantepante decisions so
It’s going to be another zamtel lapgreen case.Dont rush to reposes
Investors investment. Ask for legal
Consequence before takeover.
TELL THAT TO VEDENTA. The circumstances are very different from Lap Green
Emotional leaders, and cadres. It’s bad business to try and force someone to shut down against their will. Arbitration is there for reason. It might seem okay in Zeb but not out there. Now poor Zambians will have to compensate vendata because of a poor decision made to appease a handful number of cadres.
The shares for ZCCM are known as “Golden shares” which gives ZCCM very little or no say on the deliberations of the board. KCM as the major shareholder calls the shots. Mines got bad when we privitised 100 % in 1991. This ment no say for us.
@7.1 GMS
Definition of Golden Share:A golden share is a type of share that gives its shareholder veto power over changes to the company’s charter. It holds special voting rights, giving its holder the ability to block another shareholder from taking more than a ratio of ordinary shares.And one of the qualifications of golden shares is to have a shareholding of atleast 51% of the company shares.Does ZCCM-IH have this in KCM?
So if indeed ZCCM-IH had golden shares in KCM,then they are at fault because they had veto powers to stop the rot without seeking liquidation in courts of law.
Prof Muna Ndulo warned the Lungu Govt that this is what would happen but the Govt ignored him. As soon as International Arbitration kicks in it will stay the Court Liquidation Processes in Zambia. The Liquidation Processes will take some time and in the meantime GRZ will have to finance KCM Monthly operational costs. Most Analysts so this coming but GRZ has no Plan B. ZCCM-IN thru GRZ directive breached the KCM Shareholders Agreement and will lose the Case and the Provisional Liquidator will be legally kicked out of KCM. This is the Result of Chipante pante Govt not listening to Mining and Legal Experts.
The best court should have been a Malawi court; WHY NOT?
@ Chapamo Geraboo
You have point….at least in Malawi we have that Judge who was hired and/or brought by late President Sata and stayed in Zambia for almost a year….what is his name again? He certainly has a soft spot for Zambia unlike SA Judges…lol
Gosh! This fixation with the sale and shareholder agreement which covered shareholder issues is surprising. I don’t know why some of you are falling for the baseless irrelevant argument and distraction. The matter before the court is KCM’s insolvency and failure pay it debts, which KCM has not been disputed and has neglected to liquidate for years now. The Court action taken is a remedy available under the law to a creditor or any person owed to recover their money from the defaulting, insolvent company which KCM was and is. Ni pesa fikosele kanshi?
Well put sir! Some people just opt not to understand. What Vedanta has has done is simply BLATANT ECONOMIC SABOTAGE
@ Digga
Epo fikosele pakweba ati, KCM through VEDANTA and not ZCCM-IH are contesting liquidation.By this, the implication is that they(KCM, a separate legal entity from VEDANTA) are not insolvent,have not defaulted and they are ready to explain their side in the courts of law( thus seeking arbitation), for they were not given an opportunity by the Zambian govt to explain their side of the story before arriving at liquidation(winding up) of KCM operations.The question is,who has taken KCM to court for failure to settle debts? which creditors? ZCCM-IH is a shareholder and not a creditor.Does ZCCM-IH have a locus standi to invoke liquidation in an entity it has shareholding and board represenation?If ZCCM-IH was not represented in the board, fair enough.Natural justice calls for both sides…
Natural justice calls for both sides to be heard.
Banana Republic
TELL THAT TO VEDENTA. The circumstances are very different from Lap Green
They chose SA for a court case because the copper passes through SA to China.
Let’s hope there will be no confiscation orders from the court for the copper on transite…….
Vedanta was incurring huge losses, so they claimed. The social services in the mine areas ceased with the departure of ZCCM. Why is Vedanta fighting so hard to get back a non profitable asset?
The bembas would say uyu nsamya ale sabaila.
Can a South African court interpret Zambian law?
Look even any bank in Zambia can be liquidated if they fail to pay their debts. Respond to the issue at hand you fo.ols, even your press statement cleverly (but actually foo.lish.ly) chooses not to mention that you have neglected to pay your huge debts which have necessitated liquidation as the only option.
Pay up, that is the only way to build your case against liquidation.
Another LAPGREEN issue.We never learn.ZAMTEL is now operating with the help of Zambian tax payers money.It cant attract any investors due the $350million it owes to lapgreen.Only the Chinese or Russians can invest in ZAMTEL.The company is doomed.Next is KCM.
Tricky situation that requires sober analysis. From the word “liquidation” means curtail or kill da entity’s existence. In view of this it can be way of Members Voluntary Liquidation or Creditors Voluntary Liquidation (Insolvency). For now am lost as to which liquidation law is being applied to KCM case. One MVL it means da entity is solvent but has reached its maturity in terms of directorship. As for CVL again proof must be established for failure to settle obligations as they fall due. However if CVL is used as recipe to wind up KCM then the tsll order is obvious in terms of who is owed by KCM as well as who owes KCM. Appointed liquidator will have to mop all money outstanding with debtors before offloading da assets for onward settlement of the debts on pecking order. In view of…
people who want to edit or report legal related issues should have a better appreciation of the law and how it operates. Clearly the editors here do not properly understand what they are trying to report.
Copper has a good future and after all the lawyers go through with it, and the business people fix and pay for it… There is a chance it’ll get better!
They went to a wrong court, south african courts have no jurisdiction in zambia, take it to the international court.
I have it once and will say it again, Africa should never trade with India. It is like the devil took refuge in India, I end here. Look at what those crooks the Guptas did in South Africa. Africans for once let normal Africans run the continents affairs.
Cry Beloved Africa! The Zambian citizen Needs Help! How Family is Anglo American.
If KCM got a mining licence from South Africa, then they can win…The Zambian government is the only entity that can revoke that licence even if that South African court which apparently has no jurisprudence for Zambia, because its not enforceable. Henceforth if KCM has bribed that SA court still the GRZ will just revoke the mining licence and that disgraced Vendetta is just on a fishing expedition.
Sharp Shooter you may have a point I was not sure what Golden shares are. However I feel Vedanta is the mother company whilst KCM is a subsidiary entity which I believe should be able to represent itself. I think this explains why Vedanta was tactfully avoiding belling out KCM with it’s many dollars it has. I feel the fight really is between KCM and ZCCM and not Vedanta and ZCCM
GMS
Infact the fight is between VEDANTA and ZCCM-IH over KCM.The following is the share composition in KCM: VEDANTA-79.6% and ZCCM-IH-20.6%.The board ratio composition is 1:1 with each party having three directors apiece.Why is ZCCM-IH (a shareholder and NOT a creditor) fighting its partner(VEDANTA) over liquidation when it should have been creditors who are allegedly owed colossal sums?
I am sorry Vendatta you time is up to operate in Zambia
When 2 entities come together to do business usually there is a written agreement on how disputes will be sorted out and many choose arbitration because it is faster and cheaper than the courts and most of all the proceedings and outcome or awards as they are called are confidential. Arbitration agreements or clauses are in many situations, check the small print on your receipts or invoices when you buy big items, check your pension scheme rules or even employment conditions of service. The Zambian law on arbitration, ACT No. 19 of 2000 covers everything on arbitration including international arbitration. The arbitration award or resolution is binding and final and can not be appealed unless in very, very special circumstances. Lets wait and see where this PF has taken us to.