The Lusaka High Court has directed Konkola Copper Mines (KCM) to pay its former power supplier, Copperbelt Energy Corporation PLC, 40 percent of US$29.6 million within 10 days.
The order, issued under the Creditor’s Scheme of Arrangement, results from KCM’s failure to meet its obligations to CEC, a Class 2 creditor.
High Court Judge Charles Kafunda ruled that the restriction on lawsuits under the Deed of Release and Waiver does not apply to appeals challenging the approval of a scheme.
He states that affected creditors have statutory and constitutional rights to object and appeal such approvals.
Judge Kafunda noted that the bar date for KCM to settle debts under the scheme expired on August 30, 2024, with no extension granted.
Despite this, KCM was yet to pay the required 40 percent of the admitted debt to CEC, even though other Class 2 creditors have received payments.
CEC’s Chief Financial Officer, Mutale Mukuka, revealed that efforts to resolve the matter administratively had failed.
KCM informed CEC that payments could not be made due to a pending appeal in the Court of Appeal, a justification the judge deemed insufficient.
Judge Kafunda stated that the appeal does not contest KCM’s indebtedness to CEC and ruled that an appeal does not automatically stay a court judgment.
He clarified that no stay order had been issued, meaning the initial ruling remains binding.
The judge referenced Section 46(10) of the Corporate Insolvency Act No. 9 of 2017, which grants creditors the right to object to scheme approvals, and Article 131 of the Constitution of Zambia, which guarantees the right to appeal.
These provisions, he ruled, override any restrictions in the Deed of Release and Waiver.
The court directed KCM to pay the first installment of the admitted debt to CEC within 10 days from date of ruling of December 2, 2024. It also awarded costs to CEC, to be borne by KCM.
