KONKOLA Copper Mines (in liquidation) has applied for leave to appeal High Court judge Catherine Phiri’s decision to discharge the ex-parte interim injunction which was granted to it and Zesco Limited, restraining Copperbelt Energy Corporation (CEC) from interfering with the supply of power to the mining company.

Kutawa Chamunda, an assistant to the provisional liquidator of KCM, says the mine is aggrieved by the said decision, adding that the situation is detrimental to KCM in its mining operations as it leaves it’s mines to a possibility of flooding on account of non functional pumps.

In this matter, Zesco and KCM have 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.

However, on Monday last week, Judge Phiri discharged the said ex-parte interim injunction, saying the injury likely to be suffered by Zesco and KCM could be compensated for in damages.

She added that Zesco and KCM had not demonstrated to the required standard where or how irreparable injury would be suffered if the injunction was not granted.

“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. 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,” Judge Phiri stated.

“In view of the foregoing, the exparte interim injunction granted to the plaintiffs is hereby discharged, forthwith. Costs in the cause.”

But according to an affidavit in support of ex-parte summons for leave to Appeal, Chamunda stated that KCM was aggrieved by the decision of the court and wishes to appeal the said decision, as it leaves it entirely up to CEC, notwithstanding the provisions of SI No.57 of 2020, to decide whether it would allow Zesco to wheel power over its infrastructure to KCM.

“This situation is detriment to KCM in its mining operations as it leaves it’s mines to possibility of flooding and further that thousands of employees and citizens that depend on its health services and other social amenities in its mine township areas to the perils associated with power shut down more so in this COVID-19 era,” he stated.

Chamunda stated that the court did not grant leave to appeal its decision and that being a chamber decision, leave to appeal was sine qua non (an essential condition) for KCM and Zesco to proceed to the court of Appeal.

He stated that the prospects of the intended appeal succeeding were reasonably high as the danger of the mine suffering physical irreparable damage due to flooding on accounts of non functional pumps was real and not speculative.

Chamunda stated that no prejudice would be occasioned to CEC by the grant of leave to appeal the decision, as a matter of fact and law, that there was a serious question of law to be decided i.e. the interpretation of SI No.57 of 2020.

On July 31, this year, the Kitwe High Court dismissed an order of interim relief pending arbitration, which had been granted ex-parte on May 13, 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.