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Vedanta drags ZCCM-IH to South African courts

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Konkola Copper Mines (KCM) majority shareholder Vedanta Resources Holdings Limited has taken its fight against the liquidation of KCM to the South African High Court.

Vedanta is seeking an urgent court order in South Africa to prevent Zambia’s mining investment arm ZCCM-IH from winding up its disputed Konkola Copper Mines (KCM) business.

In obtaining an ex parte order to place KCM under liquidation last month, the Zambian government alleged that KCM had breached the terms of its licence.

However, Vedanta denies these allegations and says it will defend its assets in Zambia, Africa’s second-biggest copper producer.

Yesterday, Vedanta obtained an ex parte order in the High Court of South Africa granting it leave to institute an urgent interim interdict application, out of the South African High Court in Johannesburg, against ZCCM Investments Holdings PLC and Lungu in his capacity as provisional liquidator of KCM.  

A statement by Vedanta dated July 4, reads: “In terms of the Urgent Application served on both ZCCM and the Provisional Liquidator in Zambia on July 3, Vedanta will seek 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.  

In other words, if the Urgent Application, to be heard on 16 July 2019, succeeds and an interim order is granted, the order will remain in place until the 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.”

Vedanta also says 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. 

“This 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.”

Meanwhile, operations at KCM have normalised with most sections in operation after experiencing set backs when the announcement of liquidation just filtered in.

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Start: 2019-07-01 End: 2019-07-31