THE Lusaka High Court has dismissed a case where three Vedanta Resources companies sued Konkola Copper Mines (KCM) Provisional Liquidator Milingo Lungu over plans to restructure and reorganise KCM into two separate subsidiary companies; namely KCM SmelterCo Limited and Konkola Mineral Resources Limited.
High Court Judge Winnie Mwenda has also discharged the ex-parte order of injunction granted to the three companies, restraining Milingo from undertaking any reorganisation of KCM or from transferring, disposing or selling of its assets.
In this matter, the three Vedanta Resources companies sued Milingo in the Lusaka High Court commercial registry over plans to restructure and reorganise KCM into two separate subsidiary companies, namely KCM SmelterCo Limited and Konkola Mineral Resources Limited.
The three companies also applied for leave to commence an action against KCM (in provisional liquidation), which was granted by Judge Mwenda on January 13, this year.
Vedanta Resources Holding Limited, Vedanta Resources (Jersey II) Limited and Vedanta Resources Limited cited Milingo and KCM as defendants, seeking a declaratory order that Milingo does not have the power or should not exercise the power to carry out the reorganisation of KCM’s business, assets and affairs in the manner announced on December 28, 2020, or at all.
They also wanted an order directing Milingo whether by himself, servants or agents to immediately reverse any process of reorganisation that has been undertaken with respect to KCM.
Last week, Vedanta Resources Holding Limited and the two other plaintiffs raised some issues for the consideration of the court; on whether the court having granted them leave to commence action against KCM, and them having proceeded to commence such an action, has jurisdiction to revisit or reopen the order granting leave to commence an action against KCM.
The plaintiffs also wanted the Court to consider whether the principle of functus official was applicable to the court in respect of the order to grant leave to commence an action against KCM.
But in her ruling yesterday, Justice Mwenda said her considered view on the plaintiffs’ notice of motion to raise a point of law was that they had raised a preliminary issue on a preliminary issue, a state of affairs frowned upon by the Constitutional Court in another case.
She said the plaintiffs could have raised their challenge to the Court’s jurisdiction when the Court gave the parties the opportunity to submit on the issue raised by the Court, but chose not to.
“Be that as it may, I am inclined to dismiss the plaintiffs’ notice of motion on grounds that it has no leg to stand on due to lack of jurisdiction by this court to grant the leave,” Judge Mwenda ruled.
And on whether the plaintiffs’ application for leave to commence proceedings against KCM was properly before court, Judge Mwenda found that a wrong process was used by the plaintiffs to apply for leave to commence proceedings against KCM, a company in provisional liquidation.
She further said that the application for leave was improperly before court and that the court had no jurisdiction to entertain it.
“An application for leave to commence an action against a company in liquidation is disposed of in chambers and according to Order 6, Rule 1 (3) of the High Court Rules, must be commenced by originating summons. Therefore, since there was no action subsisting before court at the time before the application for leave was made, the application should have been made by way of originating summons and not ordinary summons, which are for use in interlocutory application,” Judge Mwenda said.
She said that the irregularity in the mode of commencement of proceedings could not be cured by amendment because the proceedings were a nullity.
“This court has the discretion to set aside the initial ex parte order for leave to commence the proceedings, having heard all the sides, and effect of the same would be such that no leave to commence the proceedings would stand granted and any further steps taken by Vedanta purporting to commence these proceedings would be a nullity,”Judge Mwenda stated.
She said that since the jurisdictional issue was incurable and the court had no jurisdiction to grant the ex-parte order of leave to the plaintiffs, the order was a nullity.
“I set aside the ex-parte order granting leave to the plaintiffs to commence an action against KCM and dismiss the matter before this court. The ex-parte order of injunction dated January 18, 2021, is accordingly discharged forthwith,” she ruled.
The Justice awarded costs to the defendants to be agreed or taxed in default thereof.