VEDANTA Resources notified its Zambian joint venture partner ZCCM-IH that it had launched arbitration proceedings related to an attempt by the Zambian government to liquidate Vedanta’s majority-owned Konkola Copper Mines (KCM), said Reuters.
Vedanta has been locked in a dispute with the Zambian government since May when Lusaka appointed a liquidator to run KCM, which is 20% owned by ZCCM, Zambia’s state mining company, and 80% owned by Vedanta. Zambia accused KCM of breaching the terms of its licence.
Vedanta denies that KCM has broken the terms of its licence and says it will defend its assets in the southern African country, Reuters said.
On July 23 South African High Court Judge L Adams found that the South African courts were the correct jurisdiction in which to hear the dispute which includes claims by ZCCM-IH that it was due $50m in dividends, and that certain undertakings regarding new investment in copper mining in Zambia had not been undertaken.
This was because the dispute mechanism in the KCM shareholders’ agreement was the appropriate basis for arbitration, the High Court ruled.
The meaning of the judgement is that ZCCM-IH will not be able to carry through the winding up of KCM as it seeks to do through the Zambian courts. Judge L Adams consequently granted Vedanta and urgent interim interdict that discharges from office the provisional liquidator appointed by the Zambian High Court.
The matter is also being heard before the High Court in Lusaka. Vedanta said that the application to wind-up KCM was done ex-parte; in other words, without its participation or presence.
