ZCCM-HI sues FQM for $1.8 bn

Mon, 10 Apr 2017 11:53:06 +0000

By Chikumbi Katebe

An intriguing case in which ZCCM Investment Holdings has sued Zambia’s largest mining conglomerate First Quantum Minerals Limited for US $1.8 billion over matters that took place in 2007 may be dismissed even before it starts.

FQM chief executive Mr. Philip Pascall has submitted that “The facts forming the basis of the plaintiff’s claims were known to the plaintiffs as at 2007 and I am advised by my counsel and believe the same that these claims are rendered statute barred in Zambia.”

The case involves the deposit of excess funds by Kansanshi Mine in an FQM  Finance service account which ZCCM claims was irregular as it was made without its knowledge.

But Mr. Paschall has argued that “That the deposit of excess funds of the 7th defendant in an inter-company, interest-bearing account which was in part utilized by the 2nd defendant was documented on the financial statements of Kansashi Mining PLC (KMP) and were subsequently approved by the material board of each year,” he said.

FQM has also questioned whether ZCCM which has no formal board had the authority to commence the proceedings.

When the matter came up for hearing on Wednesday before High Court judge Dr Winnie Mwenda, ZCCM-IH applied for an adjournment on the basis that they were not served the skeleton arguments.

The judge granted the adjournment in favour of ZCCM-IH but with costs for their unnecessary delays, causing the case too drag.

But ZCCM-IH has insisted that in the name of justice they be granted an extension of time in which to apply for leave to continue the legal action.

“Further, we submit that the defendants herein do not stand to suffer any prejudice by the extension of time sought as the plaintiff’s application to continue the action will be tested and only granted of sound on the merit,” ZCCM-IH submitted.

This was after the FQM lawyers observed that ZCCM applications was out of time.

Earlier the lawyers had argued that the application by ZCCM should be dismissed on the grounds that it involved parties that were not resident in Zambia.

This therefore meant the case would only proceed at the discretion of the court and, if not allowed, the case would have collapsed.

According to law, ZCCM should have obtained leave if they had to continue with their action within 21 days after defence was filed, which had forced them to apply for an extension of the time on responding to the matter.

ZCCM-IH commenced legal proceedings against FQM Limited, FQM Finance Limited, Philip K. R. Pascall, Arthur Mathias Pascall, Clive Newall, Martins R. Rowley and Kansanshi Mining PLC as 1st, 2nd, 3rd, 4th, 5th 6th and 7th defendant respectively in their US $1.8m claim.

And Mr Philip Pascall submitted the matter was statute barred in Zambia because ZCCM-IH has been aware of the proceedings since 2007.

FQM is expected to pump  another $1billion into its operations in Zambia.

Director of Operations Matt Pascal last month revealed that  the company was Zambia’s largest tax payer having paid over $3.6billion in taxes in a period of ten years this was in addition to the  company building  a 600km electricity power line from Lusaka West to Kalumbila in Solwezi at a cost of $206 million.