KONKOLA Copper Mines (in liquidation) has been dragged to court by CMA-CGM Zambia Limited over failure to pay about K1.5 million owed to the company.

But KCM legal counsel Gloria Chipoya has argued that granting leave to commence proceedings would give the applicant an unfair advantage over other creditors since the mine is under liquidation.

According to the skeleton arguments in support of originating summons for an application for an order to commence judicial proceedings against KCM filed in the Lusaka High Court commercial registry, CMA-CGM Zambia Limited stated that it wrote a letter of demand to KCM for the recovery of a debt owed by the mine.

The company stated that the mine responded to the letter of demand through its legal counsel and acknowledged its indebtedness and even proposed to liquidate its debt in two monthly installments, which was to be settled before the month of October 2019.

“However, the respondent was unable to liquidate its debt prompting the applicant to write a further letter of demand on 8th September 2020. The respondent never responded to the second letter of demand. The applicant therefore intends to commence a court action against the respondent to recover its debt which has not been settled to this date,” the company stated.

CMA-CGM Zambia Limited prayed that the court exercises its discretion to grant the company an order for leave to commence judicial proceedings against the mine with costs to be borne by KCM.

And according to the affidavit in support of originating summons filed by CMA-CGM Zambia Limited lawyer Khozani Daka, it was stated that the company was desirous to commence the action against KCM by way of writ of summons and statement of claim for a debt owed by the mine.

Daka stated that the letter of demand dated August 19, 2019, was written to the mine by the applicant’s advocates, Messrs Christopher Russel Cook and Company and delivered both electronically and by way of postage for the recovery of Debt in the amount of K1,479,583.55.

He further noted that the mine has not yet settled any amount of the outstanding balance to this date much to the applicant’s disconcertment and frustration.

But according to the affidavit in opposition to originating summons for leave to commence proceedings against a company in liquidation sworn by Chipoya, it was stated that the applicant did not avail sufficient reasons before the court as to why leave ought to be granted.

She noted that this was due to the fact that a mere claim for an outstanding debt is one that can be resolved in normal courses of liquidation proceedings.

“Should this court grant the applicant’s application for leave to commence proceedings, the applicant would in effect be in a position to obtain an advantage above other creditors, thereby abrogating the order of priority,” stated Chipoya.

She stated that denying the application would safeguard the assets of KCM and maintain the status quo for the purposes of orderly administering the mine’s assets for the benefit of all creditors, including the applicant.

Chipoya further urged the court to dismiss the application for leave to commence proceedings against the mine.