ZCCM-IH opposes Vedanta application to stay winding up proceedings so that case is referred to arbitration
By Staff Reporter
ZCCM-INVESTMENT Holdings acting chief executive officer Mabvuto Chipata has submitted that the filing of notice of winding up petition and amended winding up petition of Konkola Copper Mines do not contravene the shareholders’ agreement.
And ZCCM-IH has opposed an application by Vedanta Resources Holdings Limited (VRHL) to stay the winding up proceedings so that parties are referred to arbitration.
Chipata submitted that although a dispute has been declared by Vedanta Resources, he denied that ZCCM-IH has breached any terms of the shareholders’ agreement.
“The shareholders’ agreement does not prohibit the commencement and or continuation of winding up proceedings against the respondent. There is no dispute arising from the commencement of winding up proceedings as alleged by Vedanta,” he argued.
Chipata stated, in a document headlined refer parties to arbitration, that a notice of intention to appear on petition dated June 21 was filed into court before the statutory prescribed advertisement of the amended petition.
He submitted that there is no requirement to either give notice prior to an order appointing a provisional liquidator nor to join Vedanta as a party to the proceedings.
Chipata referred to judge Anessie Banda-Bobo’s ruling dated June 20, in which she declined to join Vedanta as a second respondent for the reason that there was no procedure for non-joinder under the Company’s Winding Up Rules of 2004.
He stated further that the matters arising in the amended petition are not a “dispute”, as contemplated by the shareholders’ agreement.Chipata explained that KCM in its answer dated July 4, this year did not dispute but confirmed among others, that it recorded substantial losses for the financial years from 2012 up to and including 2018.
He added that KCM disclosed that they were experiencing cash flow liquidity constraints, has failed to comply with its mining plan, has and is failing to pay debts to creditors and suppliers, has failed to pay dividends, has polluted the environment and that KCM is commercially insolvent.
Chipata further explained that ZCCM-IH in its amended petition has not claimed for payment of any unpaid dividends, adding that the dispute contained in the notice of arbitration is factually distinct from the reference to the dividends in the winding up petition before court.
He also stated that Vedanta has not issued any notice of dispute against KCM although they are claiming that there is a dispute.
Chipata submitted that Vedanta was seeking an order for stay of proceedings and refer parties to arbitration and not any injunctive relief against ZCCM-IH because by a ruling dated June 28, 2019 under cause number 2019/HPC/290 before judge E. Zimba of the Commercial Court, the order for injunction was refused.
Meanwhile, ZCCM-IH opposed the affidavit to stay winding up proceedings and refer matter to arbitration.
ZCCM-IH asked the court to continue with the winding up proceedings as there is no dispute which has risen to warrant the court to refer the matter to arbitration.
