KONKOLA Copper Mines (in liquidation) has sued the Copperbelt Energy Corporation PLC seeking a declaration that the consent order executed between the parties in one of the cases and signed by a Judge on September 1, 2021 was executed under a fundamental and honest, but mistaken belief on the part of KCM.
KCM argues before the Lusaka High Court that it endorsed its signature on the consent order under cause No. 2021/HPC/0320 under the mistaken impression that CEC would either stay or discontinue its claims under cause No. 2020/HP/0563.
The mining company is therefore seeking an order that the court sets aside the consent order executed between the parties on account of fundamental and honest but mistaken belief on its part.
In a statement of claim filed in the Lusaka High Court, commercial division, KCM stated that it entered into two Power Supply Agreements (PSA) with CEC on March 31, 2000, which agreements were for the supply of electricity by CEC to KCM.
The mining company stated that the two agreements were materially and substantially the same in content, the only difference being that one agreement was for supply of electricity to KCM’s Konkola and Nchanga mines and the other for the supply of electricity to KCM’s Smelterco at Nkana.
KCM stated that the said two agreements were both amended three times.
The company stated that the two parties further entered into Supplemental Power Supply Agreements for the supply of replacement energy in or around 2015 and further entered into another supplemental agreement on July 18, 2019.
KCM stated that despite the agreement to extend the PSA, CEC on June 1, 2020 , proceeded to issue a notice to the public that it would restrict and switch off supply of power to KCM at some of the delivery points and true to that notice, CEC effected the restriction of power to KCM at some delivery points
The mining company stated that perturbed by this, it (KCM) and another entity called ZESCO, it took out an action under cause No. 2020/HP/0563 for an order that CEC’s action to unilaterally restrict power supply to it contravened the law.
KCM stated that CEC entered appearance and filed a counterclaim against KCM, ZESCO and KCM provisional liquidator, Milingo Lungu.
“The main action under cause No. 2020/HP/0563 by the plaintiff and ZESCO against the defendant was subsequently discontinued and there currently is only subsisting the counterclaim by the defendant against the plaintiff, ZESCO and one Milingo Lungu for the said amount of USD144 million (debt owed to CEC by KCM),” the claim read.
KCM stated that in the due course, CEC took out proceedings under cause No 2021/HPC/ 0320 by originating summons for an order that it be granted leave to commence Arbitral proceedings against KCM, but the parties entered into a consent order whereby CEC was granted leave to commence Arbitral proceedings against KCM.
“To the plaintiff’s surprise and shock, the defendant herein proceeded to issue out a notice of Arbitration as against the plaintiff claiming substantially the same relief it is claiming by way of counterclaim under cause No. 2020/HP/0563, being that the plaintiff owes the defendant a sum of USD139,798,529 plus interest for the supply of power for the period May 2019 up to March 2020. The consent order under cause No. 2021/HPC/0320 executed between the parties granting CEC leave to commence arbitral proceedings against KCM was endorsed by KCM under a fundamental and honest but mistaken belief that CEC would take legal steps to either stay or discontinue the proceedings under cause No. 2020/HP/0563 before commencing Arbitral proceedings for substantially and materially the same issues as those under the said cause No 2020/HP/0563 which is currently subsisting,” read the claim.