PATRICE Motsepe’s African Rainbow Capital has approached Johannesburg’s High Court for legal clarity in a R3.4bn lawsuit filed by US company Pula Group in Tanzania, according to BusinessLive in an article on Monday.
The dispute centers on allegations that Motsepe and three affiliated companies breached a 2019 confidential agreement regarding a Tanzanian graphite mining investment proposal. Pula Group, led by Mary Stith, daughter of former US ambassador Charles Stith, launched proceedings in 2023, said the publication.
The controversy arose after ARCH Sustainable Resources invested in Australia’s Evolution Energy Minerals in 2021. Evolution operates the Chilalo graphite project in Tanzania’s Ruangwa District, the same area as Pula Group’s 50%-owned Pula Graphite venture.
Motsepe, African Rainbow Minerals and ARCH failed to defend the Tanzanian case, claiming improper service. Pula Group subsequently sought default judgment, which ARC opposed as the sole defending entity. Appeals by the undefended parties were unsuccessful in 2024.
ARC’s June application to the Johannesburg court marks the first time the matter has reached South African jurisdiction. The High Court granted ARC’s request for edictal citation, giving foreign companies approximately one month to respond, said BusinessLive.
ARC seeks declaratory orders confirming it wasn’t bound by the ARM-Pula Group agreement and cannot face liability. The company also wants confirmation that Pula Graphite wasn’t party to the original contract, BusinessLive said.
ARC director Johan van der Merwe argued the confidentiality agreement specified South African law would govern interpretation, making the Johannesburg court’s ruling crucial for resolving all aspects of the dispute.
The company disputes Pula Group’s damage calculations, arguing the graphite project’s actual value was $105 million rather than the claimed higher amount.
