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ZCDC barred from selling Mbada diamonds

by Staff reporter
26 Feb 2020 at 06:37hrs | Views
THE Supreme Court on Monday dismissed with costs the appeal made by government-owned Zimbabwe Consolidated Diamond Company (ZCDC) which sought to continue the sale of diamonds extracted from an area previously mined by Mbada Diamonds.

ZCDC had approached the Supreme Court to challenge the ruling of the High Court which had issued an order barring the entity from selling diamonds in the area until the finalisation of the cases before the courts.

Grandwell, which owns 50 percent shareholding in Mbada Diamonds (Mbada) had argued that no prejudice will be sustained by ZCDC complying with a High Court order made on March 15 2018 and awaiting the final determination of matters before the courts.

Mbada Diamonds had initially approached the High Court seeking to secure its diamond ore that were being sold by ZCDC pending finalisation of the matter.

The firm's lawyer Thembinkosi Magwaliba confirmed the Supreme Court ruling.

"The Supreme Court confirmed the High Court judgement by Justice Chitapi interdicting ZCDC from selling the diamonds from the disputed area, where Mbada Diamonds used to carry out mining operations," Magwaliba told Zim Morning Post.

"The appeal was therefore dismissed with costs," he added.

ZCDC had submitted that High Court judge Tawanda Chitapi, handed down an interim ruling, demanding ZCDC to return the diamond ore that it took, which purportedly belongs to Grandwell, claiming that Chitapi misdirected himself in ruling in Grandwell's favour.

"The court a quo erred at law and grossly misdirected itself when it granted on an urgent basis an order which has the effect of holding the appellant (ZCDC, in the Supreme Court appeal) in contempt of court, when it was clear that no contempt of court proceedings had been launched by the first respondent (Grandwell) in terms of Rule 388 of the High Court Rules, 1971," ZCDC had claimed in its Supreme Court appeal claim.

Mbada challenged the move, by seeking for leave to enforce the order pending appeal.

"No prejudice will be sustained by the respondents complying with the order made on the 15th of March 2018 and awaiting the final determination of matters pending before the courts. The Chiadzwa diamond mining area is a vast area," Grandwell chairman David Kassel said in an affidavit.

"The first respondent (ZCDC) carries a special grant in respect of the area previously held by Marange Resource (Private) Limited and mined by the second respondent (Mbada). There is no necessity to sell diamonds from the concession area in respect of which there are disputes," Kassel added.

The company said, the diamonds are being sold secretively.

"The terms on which the diamonds are being purchased are unknown. The quality of the diamonds being sold is unknown. The buyers are unknown. The whole process is opaque and conducive to corruption and prejudice being suffered by the applicant (Grandwell) and the second respondent (Mbada)"
"The first respondent is an entity which has no capacity to compensate the applicant and the second respondent. It was unlawfully incorporated as a vehicle for joint ventures between the government of Zimbabwe and private companies. The constitutional framework for joint ventures of that nature was not observed," Grandwell said.

Mbada Diamonds was sometime in 2016 ejected from Chiadzwa diamond mining fields following the cancellation of its operating licence by the government, culminating in a bruising legal battle where several court orders were made in its favour, but appealed against by ZCDC.

Grandwell has recently filed an urgent chamber application accusing the government, through the ZCDC, of intending to sell diamonds extracted from its concession area unlawfully and also seizing actual diamonds which were contained in a vault when Mbada Diamonds was evicted from the diamond fields in 2016.

The application was granted.

Source - monringpost