COPPERBELT Energy Corporation (CEC) has submitted that KCM, Zesco Limited and then Minister of Energy conspired to injure it and cause loss by damaging or destroying its business.
CEC has also denied that KCM entered into a Consent Order with it in reliance of any representation or belief, arguing that the mining company made inquiries of its own prior to entering the said Consent Order.
This is a matter in which Konkola Copper Mines (in liquidation) has sued CEC, seeking a declaration that the consent order executed between the parties under cause No. 2021/HPC/0320 and signed by Judge E Mwansa Zimba on September 1, 2021, was executed under a fundamental and honest but mistaken belief on the part of KCM.
KCM argued 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.
But in its defence, CEC stated that after the expiry of the Power Supply Agreement (“PSA”), the parties agreed to extend the tenure of the PSA to May 31, 2020 to allow for negotiations for the new PSA which were ongoing.
The Corporation stated that while negotiations for a new PSA were going on between KCM and CEC and between CEC and Zesco Limited, KCM signed a Term Sheet for a PSA with Zesco Limited without its knowledge.
CEC stated that shortly after execution of the Term Sheet between KCM and ZESCO Limited, the Minister of Energy passed Statutory Instrument No. 57 of 2020 which declared all of CEC’s distribution and transmission lines common carrier.
“The defendant (CEC) will aver that the plaintiff (KCM), Zesco Limited and the Minister of Energy conspired and combined together wrongfully and with the sole intention of injuring the defendant and causing loss by damaging or destroying the defendant’s business,” it submitted.
CEC further stated that the counterclaim in case No. 2020/HP/0563 raises a diverse of claims ranging from claims for conspiracy, breach of statutory duty and claims that Milingo Lungu, the Provisional Liquidator of KCM was carrying on business with intent to defraud creditors.
“The defendant will say that KCM has deliberately mischaracterised the cause of action and reliefs sought in Cause No. 2020/HP/0563. In the arbitration, the defendant is seeking to recover a debt of USD 139,798,529 owed to it by KCM. The defendant did not, on or before the said Consent Order was entered into, make any representation of fact or law regarding the specific actions and/or claim(s) that it would pursue in the said arbitration in the terms alleged, which had the effect of creating the purported belief the plaintiff alleges. The defendant denies that the plaintiff entered into the Consent Order in reliance of any representation and/or belief. The defendant will show at trial that the plaintiff made inquiries of its own prior to entering the said Consent Order and had formed its own opinion and belief that justified entering into the said Consent Order,” it stated.
CEC denied that the said arbitration raises substantially similar reliefs sought in the counterclaim in case No.2020/HP/0563 and that the arbitration is fundamentally different from the action in the said case.
The Corporation stated that in any event, the subject matter of the said Consent Order has been carried into effect since the date of September 1, 2021, in that the arbitration proceedings were instituted such that KCM was not entitled to rescind or set aside the said Consent Order.
“The defendant will plead and rely on the provisions of Section 10(2) of the Arbitration Act No 19 of 2000,” stated CEC.