King’s Daughter Mining Company (KDMC)‘s bid to bar Redwing Mining company(RMC) from implementing a joint venture mining agreement the latter entered with a third company hit a snag after the High Court struck the application off the roll.
KDM, which owns and operates RMC is a subsidiary pan-African natural resources company, Metallon Corporation. The mining firm had sued RMC under corporate rescue over the joint venture it entered with Duatlet Investments Private Limited. The company also listed the curator Mr Knowledge Hofisi, Master of High Court and the Registrar of Companies as respondents.
KMD which previously won a provisional order against RMC and its co-respondents, this time wanted the respondents barred from implementing the deal pending the confirmation of the order it had obtained against them.
According the provisional order, Duatlet and Mr Hofisi were also interdicted from conducting any mining operations on RMC’s claims without the written consent of KDM. The order also interdicted Mr Hofisi from granting to any third party the rights to conduct mining operations on the same site without KDM’s authority.
In this case, the High Court death with the preliminary points raised by the respondents in opposition of the KDM’s application, in which Justice Jacob Manzunzu had to decide whether or not the application was properly before the court.
In the event that the court found that the application was improperly before it, then there would be no application to talk about. Through its lawyer Advocate David Ochieng, King’s Daughter did not deny that it had instituted legal proceedings against Redwing, being a company under corporate rescue, without the written consent of Mr Hofisi, as the interim corporate rescue practitioner or leave of the court.
In his judgment, Justice Manazunzu, however, found that the Insolvency Act lists a whole range of things which one cannot do without either written consent of the corporate rescue practitioner or leave of the court, the basis, the judge found KDM had instituted the legal proceedings without following the due process of the law.
“This application is fatally defective for non-compliance with statutory requirements. The application is therefore improperly before the court,” said Justice Manzunzu agreeing with Adv Regina Mabwe, acting for Redwing and Mr Hofisi, who moved for the matter to be struck off the roll as opposed to a dismissal, advocated by A Ms Machanzi, who argued the matter for Duatlet.
Redwing was placed under corporate rescue in July 2020 after the Associated Mine Workers Union of Zimbabwe filed an application on the grounds that the company was financially distressed, among other reasons. RMC was placed in corporate rescue notwithstanding opposition by Metallon Corporation, its parent company.
Dr Cecil Madondo of Stone House Consultants was appointed as the corporate rescue practitioner in July 2020. However, since the commencement of corporate rescue proceedings, there have been many litigations, which are still pending. Knowledge Hofisi of Aurifin Capital, was appointed the corporate rescue practitioner for RMC on 21 April 2021 following the suspension of Dr Madondo by the Master of the High Court.
In terms of the deal, RMC will receive 28 percent of net earnings while Duatlet will get the remainder at intervals determined by a steering committee, using transactional platforms approved by the Fidelity Printers and Refiners.