VEDANTA Resources Holdings limited and Vedanta Resources limited have sued ZCCM-IH in the Lusaka High Court, seeking an order that they be allowed to register the final Arbitral award by the South African Court in which it declared that ZCCM-IH was and continues to breach the dispute resolution provisions of the shareholders’ agreement.
The tribunal ruled that KCM (in liquidation) is not supposed to conduct any business and meet its obligations pending the winding up proceedings.
In an affidavit in support of ex-parte originating summons filed in the High Court commercial registry, Deepak Kumar, a director and company secretary of Vedanta, said on November 5, 2004, the applicants entered into a shareholders’ agreement with ZCCM-IH in relation to the operation and running of Konkola Copper Mines.
Kumar stated that after ZCCM-IH petitioned KCM in the Lusaka High Court on May 21, 2019 for purposes of winding up, Vedanta Resources Holdings limited and Vedanta Resources limited declared a shareholders dispute in line with the shareholders agreement and instituted arbitration proceedings with the seat of the arbitration being Johannesburg, South Africa.
He said on April 22, 2021, the Arbitral tribunal requested the parties to address various preliminary issues prior to the hearing and determination of the main arbitration.
Among the preliminary issues raised was whether the Arbitral tribunal has jurisdiction to determine Vedanta’s claims that ZCCM-IH had breached and was in continuing breach of the dispute resolution provisions, clauses 24 and 26 of the shareholders agreement.
Kumar stated that hearing of the preliminary issues came up before the Arbitral tribunal over four days from May 31, 2021 and by a partial final award dated July 7, 2021, the tribunal ruled that it had the jurisdiction to determine Vedanta’s claim that ZCCM-IH had breached and was in continuing breach of the dispute resolution provisions at clause 24 and clause 26 of the shareholders agreement.
The tribunal ruled that the petition and amended petition on the grounds relied upon was in breach of the dispute resolution provisions of the shareholders agreement.
It further ruled that KCM was not required to carry on business to meet all objectives contained in the preamble to the approved programme and the KCM board was responsible for the management of the company.
“According to the final Arbitral award, the respondent has breached and is in continuing breach of the dispute resolution provisions at clause 24 and 26 of the shareholders agreement,” Kumar stated.
“The partial final Arbitral award being made in Johannesburg, South Africa is binding upon ZCCM-IH and has neither been set aside nor suspended in Zambia or South Africa.”
Kumar added that the final Arbitral award is capable of enforcement and execution in South Africa and the applicants are desirous to have the final Arbitral award registered in Zambia against ZCCM-IH.