THE State has appealed against the Lusaka High Court’s decision to quash Energy Minister Matthew Nkhuwa’s decision to declare the Copperbelt Energy Corporation (CEC’s) transmission and distribution lines as a common carrier.
This is according to a notice of appeal filed in the Court of Appeal by Attorney General Likando Kalaluka on March 5, this year.
“Take notice that the Attorney General, the appellant herein being dissatisfied with the judgement of the learned High Court judge Mrs Elita Phiri Mwikisa delivered in the High Court on February 26, 2021, intends to appeal to the Court of Appeal against the said judgement,” read the notice.
Meanwhile, the State has asked the Lusaka High Court to stay the execution of the said judgement pending the determination of the appeal by the Court of Appeal.
According to a memorandum of appeal filed in the Court of Appeal, Kalaluka’s grounds of appeal are that Justice Mwikisa erred in law and fact when she quashed the decision of the Minister to declare CEC’s transmission and distribution lines as a common carrier.
He also argues that the judge erred in law and fact when she held that the manner the Minister declared the CEC’s transmission and distribution lines, did not comply with law.
Kalaluka further argues that judge Mwikisa erred in law and fact when she held that the manner in which Statutory Instrument No.57 was drafted leaves no room for maneuver for CEC and that CEC cannot even negotiate new terms or conditions as doing so will violate SI No.57 and that it amount an expropration.
On March 4, this year, Lusaka High Court Judge Elita Mwikisa granted the Attorney General leave to appeal against her decision.
In the matter which was before her, CEC which cited the Attorney General and the Energy Regulation Board (ERB) as respondents, was seeking a declaration that Nkhuwa’s decision dated May 29, 2020, to declare its transmission and distribution lines as common carrier was unlawful.
CEC wanted a declaration that the decision of the Minister of Energy to direct it to provide a wheeling path for Zesco Limited to supply power to KCM on terms directed by the Energy Regulation Board was illegal and therefore null and void.
It also wanted a declaration that the decision by the Director General of the Energy Regulation Board of May 31, 2020 to direct it to charge a wheeling tariff of US$5.84/kw/per month was illegal and therefore null and void.
CEC further wanted among others, an order to quash the said decisions and a further order to stop Nkhuwa from enforcing SI no.57 of 2020 as it is illegal.
And in her judgement, judge Mwikisa quashed Nkhuwa’s decision to declare CEC’s transmission and distribution lines as a common carrier.
According to her findings, judge Mwikisa said CEC was not fairly treated by the Minister who arbitrarily used his powers to declare its transmission and distribution lines as common carrier without giving CEC a chance to negotiate terms and conditions for the use of its infrastructure.
She noted that what the Minister could have done under the circumstances, was to declare only those transmission and distribution lines of CEC that supply power to Konkola Copper Mines (in liquidation) and not to declare the entire interconnected system of CEC as common carrier thereby opening it to any enterprise to use it indiscriminately.
Justice Mwikisa further found the Minister’s action in declaring CEC’s transmission and distribution lines as common carrier, disproportionate and ultra vires the provisions of the Electricity Act, more especially section 15 of the Act and therefore illegal.
She noted that there was a failure on the part of the Minister to act with procedural fairness towards CEC.
Justice Mwikisa said the Minister’s decision to declare CEC’s transmission and distribution lines as common carrier through the passing of S.I No.57 of 2020, had taken away CEC’s rights to negotiate terms and conditions of use of its infrastructure in view of the fact that any enterprise can use CEC’s infrastructure at the wheeling charge that ERB has set, which CEC had argued was not cost effective.
“The applicant (CEC) was not given a chance to negotiate the terms and conditions of use of its infrastructure with KCM. In fact, KCM has abrogated its contractual obligations under the Power Supply Agreement (PSA) to pay the debt owed to CEC amounting to USD 144 million. I agree with CEC that S.I No. 57 of 2020 is too wide in its application in that it affects all the applicant’s transmission and distribution lines instead of only affecting lines supplying power to KCM,” judge Mwikisa said.
She agreed with CEC that the Minister’s decision was meant to ensure continuous supply of electricity power to KCM, despite being indebted to CEC.
“The Minister’s decision is ultra vires the provisions of section 15 (2) of the Act and therefore illegal. KCM failed to pay the debt of USD144 million and CEC has the right under section 43 (1) to discontinue the supply of power,” she further said.
“All in all, I find that the applicant has succeeded on all grounds under order 53 rule 3 of the Rules of the Supreme Court. I accordingly quash the decision of the Minister of May 29, 2020, to declare the applicant’s transmission and distribution lines as a common carrier. Costs follow the event.”