Vedanta's chance to play the arbitration card passed in 2016

Dear Editor,

IT looks like everyone is focused on the arbitration clause in the contract that we forgot the genesis of this problem.

In fact, the trial Judge was misled by Vedanta lawyers who failed to mention that the dispute started way back in 2013, when ZCCM-IH claimed that KCM had failed to pay for sums owed as part of a copper and cobalt price participation agreement dating back to 2004, when Vedanta took over the Zambian copper mine.

KCM claimed the mine was making losses, but was secretly making payments to Vedanta, the majority shareholder.

Efforts to resolve the impasse with KCM amicably failed, prompting ZCCM-IH to file a claim in a London court in January 2016 for $100m.

This is when Vedanta should have sought arbitration in the matter, however, KCM had done their best to delay and frustrate the legal process by applying for two extensions of time to provide documentation on their payments to Vedanta Resources, which they never supplied.

January 18, 2018: In the third major London case against Vedanta subsidiary KCM since 2014, the English High Court on January 2 ordered KCM to pay $139m plus costs to the Zambian government entity ZCCM-Investment Holdings (ZCCM-IH).

From thereon, ZCCM-IH not only became a shareholder but a creditor as well.

The action taken by ZCCM-IH to place KCM under liquidation was not as a result of a dispute with Vedanta, but as a result of the debts owed.

Vedanta had arrogantly snubbed the arbitration process as far back as 2013.

They therefore cannot rely on the arbitration clause on a dispute that a court has already ruled on.

The South African court action by Vedanta was therefore wrongly brought before the court.