May a final disposal of the dispute be just a procedural order ?

In ZCCM[1] a dispute had arisen between shareholders of Kansanshi Mining PLC (KPM) a mining company in Zambia, namely ZCCM Mining PLC (KPM), a company owned by the State of Zambia, holding 20% of the share capital and Kansanshi Holding Limited (KHL), holding 80% of it.

ZCCM has claimed, in ad hoc arbitration proceedings, that transfers which had been made by the opposite party had been in breach of the Shareholders’ Agreement.

ZCCM’s claim was made on behalf of Kansanshi Mining PLC (KMP).

The arbitral tribunal found that ZCM had not proven that such derivative action had “realistic” prospects of success.

ZCCM challenged that decision before the High Court.

 

The Judgment

The Court held that the challenged decision was dealing with a procedural and not with a substantive issue, since the derivative claim is a procedural device, and that such a decision could not be treated as an award, but just as a procedural order.

 

Comment

The Court’s ruling is not convincing since that decision formally disposed of the claim.

The distinction between an award and a procedural order is generally that an award finally disposes of the claim, while procedural orders deal only with a procedural issue which does not decide the case.

 

[1] ZCCM Investments Holding PLC v. Kansanshi Holding PLC and another [2019] EWHC, 1785 (Comm.)

About the article

This article has been published by Mauro Rubino-Sammartano on Lexology

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