Kansanshi applies to register arbitral award against ZCCM-IH
By Staff Reporter
KANSANSHI Holdings Limited has applied to the Lusaka High Court to register and enforce the arbitral award dated July 9, 2019 made in London, United Kingdom against Zambia Consolidated Copper Mines Investment Holdings.
Kansanshi Holdings Limited which has cited ZCCM-IH in the matter stated that the application to register and enforce the arbitral award is of utmost urgency and calls for immediate determination because
they are likely to suffer great prejudice.
She stated that Kansanshi Holdings Limited was part of First Quantum Group of Companies.
Kansanshi Mining PLC which owns the largest copper mine in Zambia are the second applicants in this matter.
According to an affidavit by Kansanshi Mining PLC corporate secretary, Joyce Mwansa of Lusaka, she stated that the company’s board was majority controlled by the Kansanshi Holdings Limited and was made up of chairman and up to 11 other directors of whom two are appointed by ZCCM-IH.
She explained that on December 20, 2001, ZCCM-IH entered into an amended and restated shareholders agreement with the applicants in which Kansanshi Holdings Limited the first applicant was the majority with (80%) shareholdering in Kansanshi Mining PLC (KMP) while ZCCM-IH is the minority with (20%) shareholdering in the same Kansanshi Mining PLC.
She stated that the agreement contains at clause 27, an arbitration that sometime between 2007 to 2014 , cash reserves of the 2nd applicant which had been built up did not attract a commercial rate of interest when they were deposited with FQMF, being the 1st applicants treasury entity , and that false representations about the deposit
account were made to it, the terms and uses of the facility.
Mwansa stated that in summary, Kansanshi Holdings limited replied that there could be no falsity as it had regularly disclosed the deposit account through the board business and through KMP’s filed accounts, which were approved by the KMP board, and that the monies were repaid to Kansansha Mining PLC on demand and by December 2014, the full amount held by FQMP had been repaid to Kansanshi Mining PLC.
She stated that ZCCM-IH referred the dispute to arbitration as per the agreement and sought permission to commence a derivative claim on behalf of Kansanshi Mining PLC to maintain claims against the first applicant.
She stated that when the matter was referred to arbitration in London,England, all parties through their respective advocates were present.
“I am advised the claim was heard over a three day hearing in London before an arbitral tribunal. I am also advised that the arbitral tribunal fully examined the correspondence and other evidence between the disputing parties regarding the disclosure, terms and the understanding of the parties regarding the deposit amounts,”
Mwansa stated.
She stated that on February 22, 2018, the arbitral tribunal ruled that it was understood and accepted position of the law that in order to obtain permission to bring a derivative claim on behalf of the second applicant, ZCCM-IH ought to have established a prima facie case showing that the second applicant was entitled to the relief.
Mwansa stated that after examining the evidence, the arbitral tribunal concluded that ZCCM-IH failed to show falsity of representations and failed to show loss arising from the fact that monies were in the deposit account because they could not have obtained a better use elsewhere.
She stated that according to the ruling, ZCCM-IH failed to establish a prima facie case as required and was accordingly denied permission to commence the derivative action on behalf of the second applicant.
Mwansa explained that dissatisfied with the ruling, ZCCM-IH commenced an action in the High Court of England and Wales, seeking to set aside the ruling on grounds that the arbitral award had been procured by
fraud.
She stated that the matter of the appeal was heard afresh before the High Court of England and Wales on March 26 and 28, 2019 and parties were duly represented.
Mwansa stated that on May 22 2019, the High Court of England and Wales dismissed ZCCM-IH’s action in its judgment on the basis that the ruling was not an arbitral award and therefore not subject to being set aside in the manner that an arbitral award can be set aside.
She further stated that in the same judgment, it was stated that even assuming that the ruling was an arbitral award, ZCCM-IH failed to establish on the evidence that there had been a fraud.
Mwansa stated also that following the judgment, the parties requested the arbitral tribunal to issue a final award and that on July 9 this year, the tribunal rendered its final award against ZCCM-IH.
It was ordered that ZCCM-IH’s claims failed and were dismissed.
The arbitral tribunal confirmed that the money was approximately K9,095,185.36 and K1,554,202.84.
The order was also that the sums having been demanded by Kansanshi Holdings Limited of ZCCM-IH have been paid in full.
The order further stated that the final award having been made in London was binding upon ZCCM-IH and has neither been set aside nor suspended by Zambia and London and that a final award was capable of enforcement and execution in the United Kingdom.
Mwansa said the applicants were desirous to have the final award registered in Zambia against ZCCM-IH.
