LUSAKA High Court Judge Catherine Phiri has discharged the ex-parte interim injunction, which was granted to Zesco Limited (Zesco) and Konkola Copper Mines (in liquidation), restraining Copperbelt Energy Corporation (CEC) from interfering with the supply of power to the mining company.
And CEC has hailed the latest court ruling and expressed its expectation that Konkola Copper Mines (KCM) will work out a feasible plan to dismantle its outstanding US$144 million debt owed to the Kitwe-based power utility.
Justice Phiri discharged the ex-parte interim injunction granted on June 3, 2020, on account that Zesco and KCM had not demonstrated how they would suffer irreparable injury if the injunction was not granted.
In this matter, Zesco and KCM had sued CEC in the Lusaka High Court seeking a declaration that CEC’s action to restrict power supply to KCM contravenes the law.
Zesco and KCM were seeking an order of injunction restraining CEC by itself, its directors, officers or agents from interfering in the Time Sheet Agreement between Zesco and KCM through restricting KCM from receiving supply from Zesco, pending determination of the matter.
They also wanted, 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 Statutory Instrument (SI) No. 57 of 2020.
On June 3, 2020, Judge Phiri granted Zesco and KCM an ex-parte order of mandatory injunction restraining CEC from interfering with the supply of power to KCM.
According to an ex-parte order of mandatory injunction signed by Judge Phiri, CEC was restrained either by itself, agents or employees from interfering with any infrastructure that had been declared as common carrier for the purpose of supplying electricity to KCM by Zesco whether by way of termination, restriction of electricity supply or otherwise.
She further ordered that CEC by itself or agents shall permit uninterrupted supply of electricity by Zesco to CEC using its transmission and distribution lines, which were declared as common carrier by the Minister of Energy pursuant to Statutory Instrument Number 57 of 2020, pending determination of the matter.
But ruling on the interim injunction application, August 24, 2020, Justice Phiri discharged the ex-parte interim injunction earlier granted to the plaintiffs, stating that the injury likely to be suffered by Zesco and KCM could be compensated for in damages.
“It is not in dispute that the dispute between the parties involves commercial transactions, which both parties have stated have monetary value. Therefore, I find that if at all any injury were to be suffered by the plaintiffs, it is injury that can be atoned for in damages,” she stated.
“While this court finds that there is a serious question to be tried by the court at trial, it cannot be said that this is a suitable case for the grant of an injunction pending determination of the suit.”
She stated that the plaintiffs had not demonstrated to the required standard where or how irreparable injury would be suffered if the injunction was not granted, adding that if at all any injury was suffered, it could be atoned for in damages.
“In view of the foregoing, the ex-parte interim injunction granted to the plaintiffs is hereby discharged, forthwith. Costs in the cause,” Judge Phiri ruled.
On July 31, this year, the Kitwe High Court dismissed an order of interim relief pending arbitration, which had been granted ex-parte on 13 May, 2020 to KCM by which it sought to stop CEC from restricting power supply to the mine over its then US $132 million debt owed to the power utility.
Kitwe High Court Judge Evaristo Pengele dismissed the said application by KCM with costs, saying the mining company did not convince the Court that there was a serious question to be heard and determined at arbitration.
In the said matter before the Kitwe High Court, KCM sued CEC seeking an order of interim relief to prevent losses and damages that would be caused if CEC proceeded to restrict power supply to the mining company.
And commenting on the August 24 court ruling, CEC managing director Owen Silavwe urged all parties to engage in constructive dialogue to resolve the ongoing dispute, and remains expectant that KCM will come to the table with workable solutions on the discharge of their outstanding US $144.7 million debt to CEC.
“CEC has always held the view that commercial agreements should be honoured and respected in the interest of all businesses, their investors and all other stakeholders. We reiterate that the parties should engage in constructive dialogue to resolve these matters and remain expectant that KCM will come to the table with workable solutions on the discharge of their outstanding US $144.7 million debt to CEC,” said Silavwe in a media statement issued, Thursday.
“It is also important that firm agreements underpinning transactions in both the energy and mining industries should be in place for the proper functioning of the sectors and entities, and to engender certainty for commercial decisions.”
CEC commenced the process of discontinuing power provision to KCM following multiple attempts to resolve KCM’s outstanding debt in unpaid electricity charges, which stood at US $144.7 million by May 31, 2020, when the contract between the parties expired.
But KCM made no attempt to settle its debts since December, last year, which left CEC no choice but to protect its commercial rights and preserve the value of its business.