COPPERBELT Energy Corporation (CEC) has counter-sued Zesco Limited and Konkola Copper Mines (in liquidation), seeking an order that the Zesco pays it US$144 million as compensation for the power supplied to KCM which it could not recover due to the conspiracy between the two companies and the Energy Minister.
CEC is also seeking a declaration that KCM Provisional Liquidator Milingo Lungu’s refusal or failure to settle the sum of US$144 million owed to CEC is in breach of his statutory duty to the Copperbelt-based power utility.
CEC is further seeking, among other things, compensation for loss of its income following an abrupt end to negotiations between it and KCM for renewal of the Power Supply Agreement, and an order that Zesco pays it by way of compensation, the value of the power supplied to KCM from June 1, 2020 until date of judgement.
It has argued that Energy Minister Matthew Nkhuwa’s decision to declare its transmission and distribution lines as common carrier via Statutory Instrument No.57 of 2020 is the epitome of the conspiracy between Zesco and KCM, and the Energy Minister.
In this matter, Zesco Limited and KCM have sued the Copperbelt Energy Corporation in the Lusaka High Court, seeking a declaration that CEC’s action to restrict power supply to KCM contravenes the law.
ZESCO and KCM are seeking an order of injunction restraining CEC by itself, its Directors, Officers or agents from interfering in the Time Sheet Agreement between the Plaintiffs through restricting KCM from receiving supply from ZESCO pending determination of the matter.
They also want, among others, an order restraining CEC from effecting or taking steps to take out any supply units, lines or delivery points to KCM as they are Common Carriers as declared under S.l. No 57 of 2020.
But in its defence, CEC has argued that Zesco and KCM are not entitled to the reliefs they are claiming in their statement of claim or any relief at all.
In its defence, CEC stated that it supplied stable and reliable electricity to KCM during the life of the Power Supply Agreement (PSA) and that the Term Sheet signed between Zesco and KCM was a product of the conspiracy between them with intent to injure CEC in its business.
It added that restriction of power was agreed upon between KCM and CEC.
CEC further stated that power was restored to KCM within hours following Nkhuwa’s directive, adding that in any case, CEC was contractually and legally entitled to restrict the supply of electricity to KCM’s facilities due to the mine’s indebtedness to CEC.
And in its counterclaim, CEC cited Zesco, KCM and Lungu as first, second and third defendants respectively.
CEC argued that Zesco had no right to impose terms for the PSA irrespective of its dominance on the market as all terms of the PSA ought to be mutually agreed on by the parties.
It stated that Zesco’s decision to impose oppressive and non-negotiable terms was in breach of its Statutory duty.
CEC further stated that it continued to supply power under the PSA to KCM at the request and instance of its provisional liquidator, Milingo Lungu, for purposes of continued operations of the mine.
It added that it sent invoices to KCM which as at May 15, 2020 stood at US$131,811,794 which was equivalent to 11 months supply to KCM.
CEC however, stated that the outstanding amount had continued to accrue and had accumulated to US$144 million as at June 1, 2020.
It stated that despite several requests and demands, Lungu had refused or neglected to pay the balance due, in breach of his Statutory duty as provisional liquidator under section 127 of the Corporate Insolvency Act.
It stated that Lungu notwithstanding the insolvency continued to conduct normal mining business with unsuspecting third parties in breach of Section 74(3)(1) of the Corporate Insolvency Act with intent to defraud creditors of KCM and other fraudulent purposes.
“No accounts, balance sheets or financial statements have been circulated or issued to creditors of KCM nor has Lungu lodged with the Registrar of Companies or the High Court accounts of his receipts and payments verified by the statutory declaration,” CEC stated.
It stated that the purpose of Nkhuwa declaring its transmission and distribution lines as common carriers was to aid KCM evade its liability to CEC.
“The defendants conspired and combined together wrongfully with the sole or predominant intention of injuring CEC and causing it loss by damaging its business. The motivation of Zesco, KCM and the Minister of Energy was a wholly unreasonable and unjustified victimisation of CEC in its business,” stated CEC.