KCM, Vedanta arbitration still on?

THE arbitration process relating to Konkola Copper Mines (KCM) and ZCCM-IH is ongoing in South Africa, Vedanta Resources has said.

According to a statement, Vedanta stated that the KCM Shareholders Agreement between Vedanta Resources and ZCCM-IH (and the Government of Zambia) provides that disputes between the parties shall be dealt with by way of arbitration.

On May 21 2019, ZCCM-IH asked the Lusaka High Court for an order that KCM be wound up for among other allegations, evading tax and for being insolvent and was granted an ex parte order by the Lusaka High Court to appoint Mr Milingo Lungu as provisional liquidator of KCM.

But on July 24, 2019, the South African High Court granted Vedanta Resources’ application for an injunction in support of the arbitration agreement in the KCM Shareholder Agreement and ordered that the application for the winding up of KCM be withdrawn.

ZCCM-IH applied for leave to appeal the judgement of the South African High Court but was denied with costs.

In his judgement, Justice Adams noted that his central reasons for refusing leave to appeal were that ZCCM raised nothing new in their application that had not already been dealt with in the initial judgement and that leave to appeal can only be granted when the judge is of the opinion that the appeal would have a reasonable prospect of success.

Vedanta however, claimed that neither ZCCM-IH nor the Provisional liquidator have complied with that injunction, and thus are considered to be in contempt of court.

It stated that Vedanta and ZCCM-IH are now following the arbitration process, as envisaged in the Shareholders Agreement.

Vedanta stated that arbitration is a confidential process and the parties have been advised not to say anything about that process.

“Vedanta continues to pursue its rights under the Shareholders Agreement and has confirmed its willingness to provide financial support for KCM.

“Notwithstanding the current legal and arbitration processes currently underway in Zambia, South Africa and under UNCITRAL Arbitration Rules, Vedanta is determined to seek resolution through dialogue and constructive engagement with the Government of Zambia and ZCCM-IH,” read the statement.