Court halts KCM liquidation pending Vedanta’s appeal

The Lusaka High Court has stayed the winding-up proceedings that ZCCM Investments Holdings has instituted against Konkola Copper Mines (KCM), pending the appeal by Vedanta Resources Holdings Limited to the Court of Appeal against the court’s refusal to refer parties to arbitration.

And Lusaka High Court Judge Annessie Banda-Bobo has reserved ruling to a date to be advised on Vedanta’s application to stay some of the powers of KCM Provisional Liquidator Milingo Lungu.

This is the matter in which ZCCM-IH has petitioned the Lusaka High Court, seeking an order that KCM should be wound up for engaging in tax evasion and being managed in a manner detrimental to its interest, among other allegations.

But Vedanta, the contributor and majority shareholder of KCM, had applied for an order to stay proceedings and refer the parties to arbitration, pursuant to section 10 of the Arbitration Act.

However, judge Banda-Bobo, in her ruling of August 7, this year, dismissed Vedanta’s application, saying it was not a proper case to refer the parties to arbitration.

She ruled that staying the proceedings at the instance of Vedanta would be contrary to the wishes of ZCCM-IH and KCM, who are the parties to the proceedings.

Being dissatisfied with her ruling, Vedanta appealed to the Court of Appeal and asked judge Banda-Bobo to stay the proceedings before her, pending the determination of the appeal.

Vedanta argued in its grounds of appeal that judge Banda-Bobo erred in law and fact when she held that Vedanta, as contributor, could not make the application to stay and refer parties to arbitration as it was not a party to the proceedings, a finding which was not consistent with the true interpretation of the Arbitration Act.

It also argued that judge Banda-Bobo erred in law and fact when she concluded that KCM was a separate entity from Vedanta and that only KCM could defend itself in the winding-up proceedings.

When the matter came up in chambers, Tuesday, Vedanta urged the Court to stay the proceedings, pending the outcome of its appeal, arguing that not doing so would render the appeal an academic exercise.

And passing her ruling, judge Banda-Bobo allowed a stay of the proceedings before her in the interest of justice.

She said this would enable the issues raised by Vedanta to be interrogated by the Court of Appeal.

“That being the case, the proceedings are stayed, pending the outcome of the matter before the Court of Appeal,” judge Banda-Bobo said.

She further said she was of the belief that this would also arrest Vedanta’s concern that its appeal may be rendered an academic exercise in an event that it succeeded, although she saw no prospect of success.

Meanwhile, judge Banda-Bobo also heard an application by Vedanta to stay some of the powers of the Provisional Liquidator based on an application filed on June 25, this year.

After all the parties involved augmented their points, judge Banda-Bobo reserved her ruling to a date to be advised.

The Court had initially granted Vedanta an ex-parte order to remove certain powers from Lungu, but the same was later discharged.

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