VEDANTA Resources Holdings Limited has argued that Milingo Lungu, having been appointed by the Lusaka High Court as Konkola Copper Mines Provisional Liquidator, is still subject to supervision by the Court.

It adds that although the Court of Appeal halted the winding-up proceedings against KCM, it did not stay the supervisory powers of the High Court over the Provisional Liquidator.

Vedanta Resources Holdings Limited has, therefore, submitted that its application for directions regarding the extent of Milingo’s powers following the halting of KCM’s winding-up proceedings and the dispute referred to arbitration, is properly before the High Court.

This is according to Vedanta’s affidavit in opposition to the affidavit in support of notice of motion to raise preliminary issues filed in the Lusaka High Court recently.

Vedanta’s director and company secretary Deepak Kumar submitted that the Court of Appeal judgement, which ordered a stay of the winding-up proceedings, did not mean that the High Court had no supervisory powers over the Provisional Liquidator.

“The Provisional Liquidator, having been appointed by this honourable court (High Court), he is subject of supervision by this honourable court as the appointing authority. The winding-up proceedings before this honourable court were stayed, but the Court of Appeal did not stay the supervisory powers of this honourable court over the Provisional Liquidator. The application for directions is properly before this honourable court and does not constitute an abuse of court process,” read the affidavit.

And in the skeleton arguments, Vedanta argued that the High Court on account of its supervisory role ought to give directions on what sort of activities KCM’s Provisional Liquidator could undertake while the winding-up proceedings remained stayed.

It submitted that a stay of proceedings meant that no further proceedings could be undertaken for purposes of prosecuting the winding-up proceedings.

Vedanta, however, stated that the application for directions, which was before court, was not for purposes of prosecuting the winding-up proceedings, but rather seeks guidance as to whether the Provisional Liquidator was procedurally entitled to reorganise a company, which was the subject of winding-up proceedings and the subject of an order for stay of proceedings pending arbitration proceedings.

In this matter, ZCCM-IH petitioned the Lusaka High Court on May 21, 2019, seeking an order that KCM should be wound-up for engaging in tax evasion and being managed in a manner detrimental to its interest, among other allegations.

On November 20, last year, the Court of Appeal ordered a stay of the winding-up proceedings that ZCCM-IH has instituted against KCM in the High Court and referred the matter to arbitration as requested by Vedanta Resources Holdings Limited.

However, last month, Vedanta Resources Holdings Limited asked the Lusaka High Court to give directions regarding the extent of Milingo’s powers in light of the Court of Appeal’s decision to stay the winding-up proceedings and refer the dispute to arbitration.

Vedanta also wants the High Court to give directions on whether the Provisional Liquidator has the power to restructure or reorganise KCM by splitting its operations between two separate entities, and whether the transfer of the mining company’s property without the approval of the court is void pursuant to section 62 of the Corporate Insolvency Act.
It further wants directions on whether the powers granted to Milingo by the High Court extend to the Provisional Liquidator incorporating subsidiaries of KCM and whether the said Provisional Liquidator is able to exercise the powers granted by the court over subsidiaries of KCM, among others.

But KCM and ZCCM Investment Holdings asked the Court not to entertain Vedanta’s summons for directions and also raised some preliminary issues.

ZCCM-IH wants the Court to give directions on whether the High Court has jurisdiction to hear and determine summons for directions when winding-up proceedings have been stayed and dispute referred to arbitration by the Court of Appeal.

It also wants the Court’s direction on whether after the winding-up proceedings were stayed and dispute referred to arbitration, it is open to Vedanta Resources Holdings Limited to take further steps in the action.

ZCCM-IH argued that as the Court of Appeal stayed the winding-up proceedings and referred the matter to arbitration without any reservation, the High Court could not proceed to hear and determine Vedanta’s summons for directions, for want of jurisdiction.

It further submitted that as an appellate court, the decisions of the Court of Appeal were binding on the High Court and that if the High Court were to proceed to hear and determine Vedanta’s summons for directions, such an act would not only be in defiance of the Court of Appeal judgement, but would also call into question the judicial hierarchy system as established by the Constitution.

And Milingo argued that the stay of proceedings before the High Court was still in place, adding that no further steps may be taken by any party or person in the proceedings to progress the matter any further until the stay was lifted or ceased to exist.