SUN PHARMACEUTICALS OWNERS WIN CASE AGAIN
The Livingstone High Court has thrown out an application to Stay the execution of its earlier Judgment to squash the appointment of an Interim Business Rescue Administrator for Sun Pharmaceuticals Ltd.
In a ruling dated 9th September 2024, the Livingstone Court ruled that there was no remedy to warrant a stay of execution.
“Additionally, this Court is not convinced that the refusal to grant a stay where there is nothing to stay, will render the appeal an academic exercise.”
Kalenga’s proxy, Mr. John Musheta, applied to stay, or suspend, the dismissal of their case and the squashing of the appointment of an Administrator pending their alleged appeal to the Court of Appeal.
In trying to suspend the Administrator’s dismissal, lawyers for the applicant, Lewis Nathan Advocates, tried to argue to the court that “the grounds of appeal had high prospects of success as they were anchored on points of law and no prejudice would be occasioned.”
Lewis Nathan Advocates emphasised the argument that the Court should grant the Applicant a Stay of Execution as the Ruling was capable of being enforced.
On 15th April 2024, Lewis Nathan Advocates and Bernard Kang’ombe Associates obtained an ex parte order to place Sun Pharmaceuticals under supervision and commence business rescue proceedings under the Corporate Insolvency Act. They intended to appoint Treshod Kabanga as Business Rescue Administrator via a default Judgment after the Ndola High Court stayed his ex parte appointment as Provisional Liquidator on 2nd April 2024.
They attempted to secretly place Sun Pharmaceuticals in business administration and had it not been thwarted, the Solicitor General could have used the Administration Order to syphon off the 117 million Swiss francs owed to Sun Pharmaceuticals.
But Livingstone High Court Judge Hon. Mbila Wina ruled in favour of the owners of Sun Pharmaceuticals, as in their previous successful cases. The Sadhu’s, in part, relied upon the law as found in the case of Hakainde Hichilema and Others vs the Government of the Republic of Zambia.
It is clear that Lewis Nathan Advocates attempted to sustain the earlier ex-parte order in order to keep the scheme viable, which was designed to syphon the judgment debt owed to the Sadhus, the owners. Thre goal was to ensure that by the time the wheels of Justice inevitably dismissed their Appeal, the judgment debt due to the actual beneficaries, would have been pillaged. This would included the expenditure of millions in the ‘professional fees’ of the Administrator, which would have been safe from reimbursement, even if the Kalenga’s lost in the Court of Appeal.
BRIEF BACKGROUND
Lewis Nathan and Advocates on 15th April 2024, obtained an Ex-parte Order on behalf of a Mr. John Musheta, an alleged former employee of Sun Pharmaceuticals, to attempt to appoint Zambia’s Administrator General as Business Rescue Administrator of Sun Pharmaceuticals Limited.
The Ex-parte Order obtained appointing the Administrator General as Interim Business Rescue Administrator was dubiously not served on the Shareholders and Directors of Sun Pharmaceuticals.
This led to orchestrated attempts to divert monies owed to the Company under a Judgment against the Development Bank of Zambia and the Attorney General of Zambia.
The company’s advocates, SimezaSangwa & Associates, discovered the litigation was underway though its sources and immediately filed court process days before Lewis Nathan Advocates and Kang’ombe & Associates were to enter a default Judgment to usurp the companies’ rights.
This is a modus operandi similar to that undertaken by Lewis Nathan Advocates in winding up the affairs of The Post Newspapers, and other cases of legally dubious liquidations and takeovers commenced ex parte and by blockling the shareholders from participating in the subsequent proceedings.
On the 11th day of June 2024, Mr Sadhu, the majority shareholder and 1st Affected Person, through his Advocates, filed a Notice of Intention to appear in the proceedings and went on to file an application for an Order to set aside the Originating Summons and steps taken for:
i. irregularity,
ii. lack of jurisdiction and
iii. abuse of Court process.
On the 23rd day of July 2024, the Court rendered two Rulings pertaining to the majority shareholder Mr Sadhu’s [1st Affected Person’s], application to set aside the originating summons, finding that:
i. That the 1st Affected Person was properly before the Court to participate in the business rescue proceedings; and
ii. The Applicant’s matter was dismissed for being statute-barred.
In her Judgment dismissing the application for a Stay, Judge Wina ruled that :
“The Supreme Court in the case of Zambia Revenue Authority vs Post Newspaper stated that:
“Where a Judgment or Ruling refuses Judicial Review or an injunction, there is nothing to stay; because such a Judgment or Ruling does not award a remedy, such as money or property which can be obtained by Court execution. In short, a failed Judgment or Ruling cannot be stayed because it does not award anything.”
“If there is nothing to execute about such a Judgment or Ruling, then there is nothing to stay about it. Only a Judgment or Ruling which awards a remedy and which can be enforced by Court process, can be stayed.”
“The reason why any litigant applies for a stay is to prevent enforcement of a Judgment as elucidated by the Supreme Court in the above cited case”.
“In this case, this Court’s Ruling did not award a remedy and the said Ruling is not capable of enforcement.”
The Applicant as he has done, is well within his legal right to appeal and in fact leave was accordingly granted.
In the Zambia Revenue Authority and Post Newspaper case, the Supreme Court stated thus:
“Further, where a Judgment or Ruling is stayable, the principles state that stay of execution pending appeal, is a discretionary remedy. A party is not entitled to it as of right.” (underlined for emphasis).
“In this case as earlier indicated, this Court’s Ruling is not stayable as no remedy was awarded to warrant an execution. Additionally, this Court is not convinced that the refusal to
grant a stay where there is nothing to stay, will render the appeal an academic exercise.”
“In the Zambia Revenue Authority vs Post Newspaper case the Supreme Court stated as proof amounting to good and sufficient grounds warranting a stay; where the Judgment appealed against involves payment of money, and the Appellant has shown that such money is paid, there will be no reasonable prospects of recovering the same, should the appeal succeed.”
“In this case, there is nothing to execute and thus no risk of irreparable damage.”
“For the foregoing reasons, the application for stay of execution is therefore denied.”
Cause number : 2024/ HL/29
Following the dismissal of the case by the High Court at Livingstone, Simeza Sangwa and Associates acting for Sun Pharmaceuticals Ltd have demanded a full account of all actions taken, monies received or paid out in the name of Sun Pharmaceuticals Limited during the period when Lewis Mosho’s ex parte order appointing the Administrator General as Interim Administrator was in place.
Simeza Sangwa & Associates has demanded for the Administrator General to render an account to include all receipts and payments made and where funds have been disbursed, at whose instance this was done.
Disclaimer: The contents of this article are provided by correspondent Pranab Rajan, Lusaka Times does not assume responsibility of the article and does not vouch for their accuracy. For any responses or rebuttals, please contact us at [email protected] or [email protected].