Mining conglomerate contests court ruling
In an appeal heard at the Supreme Court before Justices Wilson Sandura, Luke Malaba and Elizabeth Gwaunza, Metallon is seeking a reversal of the decision reached by the lower court last March.
In his ruling, Justice Yunus Omerjee granted Stanmaker the lawsuit against Metallon in Zimbabwe’s biggest ever damages claim saying the former had established the grounds for its entitlement to damages suffered.
Metallon appealed against the decision arguing that the lower court had misdirected itself in awarding Stanmaker the damages, when it did not consider the fundamental issues of law and facts raised by the mining giant during the trial.
South African Advocate Cedric Puckrin, in his submissions, urged the court to overturn the lower court’s decision arguing it was improper.
Advocate Puckrin, who described the contract entered by the parties in June 2002, as “an agreement to agree”, said it was not binding.
He said the agreement was predicated on a fuller shareholders’ agreement being made and the formation of a new company.
The agreement, Advocate Puckrin said, had restrained the parties from negotiating any deals with other people for three months.
Advocate Puckrin, however, argued that any agreement entered by his client after the expiry of the restraint period could not amount to a breach of contract.
The lower court, he argued, failed to take cognisant of the fact that the parties had not entered into a partnership.
The parties’ relationship was a mere joint bid to acquire shares for and had not entered into partnership as defined by the law, which the trial judge failed to distinguish in his judgment, said Advocate Puckrin.
He urged the court to allow the appeal.
However, through their lawyer, Advocate Chris Andersen, Stanmaker argued that the nature of their relationship with Metallon was a partnership.
In view of their relationship, Stanmaker argued the parties owed each other a
duty of good faith that they should not do anything that would negatively affect the other party.
Stanmaker also argued that in breach of the agreement Metallon paid a deposit of US$1 million in a deal with another company during the restraint period and waited for the expiry of the three months to sign a new deal for themselves excluding it.
Advocate Andersen urged the court to dismiss the appeal by Metallon arguing that it was devoid of merit.
He said the court should uphold the lower court’s decision for the judge in that court had reached the “perfect decision” after considering all the important issues placed before him during the case.
After hearing submissions by counsel for both parties Justice Sandura reserved judgment to a later date.
Metallon and Stanmaker had in June 2002 entered into an agreement in which they agreed to work in a joint bid to acquire shares in Cableair (Private) Limited, a United Kingdom-based company.
Had the agreement materialised, the two companies could have jointly acquired shares in Cableair or alternatively, Stanmaker would have owned 40 percent while Metallon got 60 percent, they would have formed a new company called Newco.
Metallon, however, unlawfully and in breach of the contract acquired ownership of the Cableair shares in October 2002 after ditching Stanmaker.
This prompted Stanmaker to file a lawsuit against Metallon, which is owned by South African business mogul Mr Mzi Khumalo.
Mr Lloyd Hove owns Stanmaker, an indigenous company.
Mr Khumalo is currently embroiled in another legal wrangle with Manyame Consortium led by businessman Mr John Mkushi, after he allegedly breached another partnership contract.