VEDANTA Resources Limited says the Arbitral Tribunal has ruled that ZCCM-IH breached the dispute resolution provisions in the shareholders’ agreement between government, Vedanta and ZCCM-IH.
Vedanta Resources noted the Arbitral Tribunal observed that ZCCM-IH has continued to breach provisions of the agreement.
Vedanta, who are Konkola Copper Mines (KCM) majority shareholders, explained that there is no new stay granted to it by the Court of Appeal regarding the matter between KCM and the Zambian government.
In May 2019, ZCCM-IH asked the Lusaka High Court to wind up KCM for evading tax, being insolvent and also for alleged failure to pay outstanding invoices to suppliers and contractors.
Then High Court judge Anessie Banda Bobo, who is now Court of Appeal judge, appointed lawyer Milingo Lungu as the provisional liquidator of KCM.
But Vedanta, who joined the proceedings as a contributor, asked the court to stay the winding
up petition and refer the case to arbitration, which application was refused by judge Banda-Bobo.
Following the refusal by judge Banda-Bobo, Vedanta appealed to the Court of Appeal which stayed the proceedings on November 20, 2020 and referred the case to arbitration.
And the Arbitral Tribunal which sits in London in a ruling dated July 7, 2021, found that the Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH) had breached and continued to breach the law.
“The latest development to note from the announcement is that the Arbitral Tribunal, held in London on 7 July, granted a partial final Award in which it has ruled that ZCCM has breached, and is in continuing breach of, the dispute resolution provisions in the shareholders’ agreement between amongst others ZCCM, Vedanta and the Government of Zambia,” Vedanta said in a statement issued on July 12, 2021.
Vedanta added that the Court of Appeal’s ruling of November 2020 was only referred to in the financial report the company presented to the Singapore Stock Exchange recently.
“This statement was issued for compliance within the regulations of the Singapore Stock Exchange (SGX). Vedanta Resources Limited (Vedanta) issues this statement in response to media reports relating to its announcement on the Singapore Stock Exchange dated 12 July 2021 titled ‘Update on Konkola Copper Mines Dispute’ (‘Announcement’) and to clarify a misunderstanding arising from media reports on the announcement,” Vedanta explained.
It also said the stay was only referred to as part of background to the firm’s financial statement.
“The wording in the announcement that states, ‘the Zambian Court of Appeal has granted a stay in respect of any hearing of the merits of the Winding-Up Petition and Amended Petition in respect of Konkola Copper Mines Plc pending a decision in respect of the arbitration proceedings between Vedanta and ZCCM Investments Holdings plc (‘ZCCM’)’, relates to the Zambian Court of Appeal’s decision on 20 November 2020, and does not refer to a recent or new decision,” said Vedanta. “This was provided as background and context and in accordance with past disclosures in Vedanta’s Financial Statements for the year ending 31 March 2021.”