ZESCO Limited and Konkola Copper Mines PLC (in liquidation) have applied to discontinue a matter in which they dragged Copperbelt Energy Corporation (CEC) to court, on grounds that the case has been overtaken by operation of the law.
According to a notice of discontinuance filed in the Lusaka High Court by Zesco legal counsel, and yet to be signed by the presiding judge, the company stated that they would like to discontinue the matter in its entirety.
“Take notice that the first plaintiff in the original action and second defendant in the counterclaim has wholly discontinued its action against the defendant in the original action on grounds that the same has been overtaken by operation of the law,” read the notice.
This is a matter in which Zesco Limited and KCM sued CEC in the Lusaka High Court seeking a declaration that the latter’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 the plaintiffs through restricting KCM from receiving supply from Zesco, pending determination of the matter, among other claims.
The plaintiffs were further seeking an order or declaration that the action by CEC to unilaterally restrict power supply to KCM contravenes the law as promulgated under the Electricity Act (Common Carrier) (Declaration) Regulations Statutory Instrument No. 57 of 2020.
Zesco and KCM also sought 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 S.l. No. 57 of 2020.
But in its defence, CEC argued that Zesco and KCM were not entitled to the reliefs they were claiming in their statement of claim or any relief at all.
CEC stated that it supplied stable and reliable electricity to KCM during the life of the Power Supply Agreement (PSA) and that the Term Sheet signed between Zesco and KCM was a product of the conspiracy between them with intent to injure CEC in its business.
CEC stated that restriction of power was agreed upon between KCM and CEC.
CEC further stated that power was restored to KCM within hours following Nkhuwa’s directive, adding that in any case, CEC was contractually and legally entitled to restrict the supply of electricity to KCM’s facilities due to the mine’s indebtedness to CEC.
CEC however counter-sued Zesco and KCM seeking an order that Zesco pays it US$144 million as compensation for the power supplied to KCM which it could not recover due to the conspiracy between the two companies and the former Energy Minister.
CEC was also seeking a declaration that KCM Provisional Liquidator Milingo Lungu’s refusal or failure to settle the sum of US$144 million owed to CEC was in breach of his statutory duty to the Copperbelt-based power utility.
CEC which cited Zesco, KCM and Lungu as first, second and third defendants respectively, was further seeking, among other things, compensation for loss of its income following an abrupt end to negotiations between it and KCM for renewal of the Power Supply Agreement, and an order that Zesco pays it by way of compensation, the value of the power supplied to KCM from June 1, 2020 until date of judgement.
The company argued that former Energy Minister Matthew Nkhuwa’s decision to declare its transmission and distribution lines as common carrier via Statutory Instrument No.57 of 2020 was the epitome of the conspiracy between Zesco and KCM, and the Energy Minister.
It stated that Lungu notwithstanding the insolvency continued to conduct normal mining business with unsuspecting third parties in breach of Section 74(3)(1) of the Corporate Insolvency Act with intent to defraud creditors of KCM and other fraudulent purposes.