South Africa

Vedanta to argue for injunction over Zambian copper operations winding up

Vedanta to argue for injunction over Zambian copper operations winding up

Johannesburg - Vedanta Resources will on Tuesday argue its application for an urgent interim interdict against  Zambia Consolidated Copper Mines-Investment Holdings (ZCCM-IH) and provincial liquidator Milingo Lungu in the South Gauteng High Court. 

The Indian-owned miner has been at loggerheads with the Zambian government over the closure of the Konkola Copper Mine (KCM) operations. 

The company is challenging the government's decision to appoint a provisional liquidator, through ZCCM-IH, to wind up KCM on allegations that it breached the terms of its licence, failed to exploit the Nchanga underground mine and did not pay creditors on time.   

Vedanta is seeking an interim court order declaring that ZCCM has breached the KCM shareholders' agreement by pursuing winding-up proceedings against KCM in Zambia, and directing ZCCM to withdraw those proceedings, thus removing the provisional liquidator. 

Should this application succeed, and an interim order be granted, the order will remain in place until an arbitration - to be instituted in due course - has been finally resolved.

Vedanta approached the South African High Court based both on the agreement to arbitrate contained in the KCM shareholders' agreement, and the selection of Johannesburg as the seat of arbitration. 

The application is brought in terms of the South African International Arbitration Act, 2017, which facilitates the conduct of disputes of this nature in South Africa. ZCCM is opposing Vedanta's application.

The Act gives effect to internationally recognised principles aimed at facilitating the resolution of commercial disputes where cross-border parties have agreed to do so by way of arbitration.

In a statement, Vedanta said it was unable to comment on the process currently underway in the Zambian courts.

This is in compliance with the guidance provided by Justice Banda-Bobo in the Lusaka High Court on 4 July 2019, after concerns were raised about the parties making public comments about ongoing court proceedings.