KCM didn’t deserve injunction against power restriction, CEC tells the court
THE Kitwe High Court has reserved ruling in a matter in which Copperbelt Energy Corporation (CEC) Plc has applied for the discharge of the exparte order for interim injunction granted to Konkola Copper Mines limited (KCM) by the Court.
This is a matter in which KCM obtained an interim injunction, on May 13, 2020, against CEC after a power restriction notice was issued on the mine owing to accumulating debt owed to the Kitwe-based power utility.
When the matter came up before Judge Evaristo Pengele, Monday, CEC was represented by State Counsel William Nyirenda and State Counsel Musa Mwenye and no one from KCM was in court as the lawyer that was sent to represent them was not on record and the application for the matter to be adjourned could not be heard, hence the decision to proceed in their absence.
In presenting their arguments on behalf of CEC, lawyers stated that KCM did not have a right to relief because the Power Supply Agreement (PSA) between CEC and KCM had expired, and it had entered into new agreements with Zesco.
“The law regarding injunctions was clear, that an applicant seeking an injunction was required to meet certain conditions and requirements, which were: the applicant must have a right to relief. KCM’s application for an injunction was premised on the Power Supply Agreement (PSA) and the Letter of Intent extending the PSA whose tenure had both expired. There were no continuing legal rights accruing from the expired agreement or letter of extension. KCM had written to CEC in no uncertain terms that the PSA would not be extended as it had entered into new arrangements with ZESCO effective 1st June, 2020. ZESCO had also advised of a new customer on the Copperbelt, though not disclosed, and seeking a wheeling path. The ZESCO customer was later confirmed by KCM when advising of its new agreement. There was consequently no legal relationship the basis on which KCM could seek a right of relief. If there was any doubt as to whether any rights were in existence, these had been obligated by KCM itself,” they stated.
“The applicant must show that if the application for injunction was not granted, it would suffer irreparable damage that could not be atoned by damages. KCM had not shown that it would suffer irreparable damage. The allegation that the restriction of power supplies would cause irreparable damage to the KCM facilities was untrue, as there was a prescribed procedure agreed between the parties by which restriction of power was required to be undertaken. Further that restriction had been done before and KCM had not shown what irreparable damage it had suffered in those situations, nor the alleged flooding. The purpose of the injunction should be to preserve the status quo between the parties. The current status quo is that there is no contractual relationship between the parties as the PSA is no longer in existence. The agreement has expired and the relationship between the parties has disengaged, there is no implied or express contractual relationship between KCM and CEC in relation to any power supply arrangement. If the Court were to grant a continuation of the injunction, it would essentially be extending the PSA or creating a new PSA, the Court had no authority to make or impose a contract on the parties.”
They added that KCM was seeking remedies, while being in breach as it did not show how or when it intended to settle the debt it owed to CEC, among others.
“The law of equity states that ‘He who come to equity must come with clean hands.’ There are many facts that are indisputable principally, that: KCM owes CEC well over US $132 million, which amount has been admitted by KCM. KCM has entered into arrangements for a new PSA with ZESCO. KCM has not shown how or when it intends to settle the debt it owes to CEC. The above are all breaches, KCM is seeking remedies while being in breach. An applicant cannot come to Court with tainted hands and seek to be availed remedies in equity,” they stated.
“In an application for an injunction, the Court must consider the balance of inconvenience. The Court must determine which party is likely to suffer the most inconvenience if the injunction is not granted. In this instance, the balance of inconvenience lies heavily in favour of CEC as it continues to provide full supplies of power to KCM at a huge cost, while there is no longer a contract in place and no arrangements by which CEC can recover its costs. Allowing the injunction to continue would be doing great injustice to CEC.”
They argued that there had been a change in events since the proceedings commenced by KCM begun and the PSA, which formed the basis for the injunction had expired and KCM itself has entered into new arrangements.
And in its prayer to the Court, lawyers submitted that the interim order of injunction granted to KCM should be discharged forthwith and costs for the proceedings be for CEC.
And after hearing the submissions, Justice Pengele reserved his ruling and stated that he would render ruling on July 31, 2020.
“At the conclusion of the submissions, the Judge said he had heard the arguments. He said that he, however, wanted to acquaint himself with the legal authorities (cases and the law) that had been referred to in the submissions by counsel and that he would render a written ruling on 31st July, 2020. The Judge, therefore, adjourned the matter to that date, the ruling was consequently reserved,” stated CEC counsel.
