Jinan loses Chiadzwa battle

Jinan loses Chiadzwa battle | The Herald March 28, 2016

Fidelis Munyoro Chief Court Repoter
A Chinese diamond mining firm Jinan had its hopes to continue mining at Chiadzwa dashed when the High Court threw out its application.

Justice David Mangota threw out an application by Anhui Foreign Economic Construction Group, a key shareholder and investor in Jinan, which sought to compel Government to allow the company to continue with its operations at the mining site after expiry of its grants.

He ruled that Anhui approached the court with dirty hands and could not succeed in the matter.

“It should cleanse itself before it seeks the court’s attention to assist it,” said Justice Mangota in a judgment handed down on Thursday last week. “It cannot, under the circumstances, be allowed to return to the status quo ante 22 February 2016.”

Anhui had approached the court challenging the closure of the mine following the expiry of its two Special Grants last year.

“The court, in other words, cannot assist it to continue to live outside but within the law,” said Justice Mangota.

He said Anhui’s assertion that Government allowed them to operate ceded portions of the grants for an indefinite duration was misplaced.

“The grants became void and could not be reinstated except through having them renewed. This, unfortunately for them, was turned down,” he said.

“The court has considered all the circumstances of this case. It is satisfied that on the basis of the foregoing the applicant (Anhui) failed to prove its case on a balance of probabilities. The application is dismissed with costs.”

After the company’s bid to renew the grants was turned down, it meant it should have moved out of Chiadzwa.

Through its lawyer, Mr Perez Ranchhod of Hussein, Ranchhod and Company, Anhui argued that Mines and Mining Development Minister Walter Chidhakwa’s action of cancelling Special Grants 5249 and 5244 without due process resulted in the cessation of the mining operations of Jinan.

It was also argued that the cancellation of the grants caused severe financial prejudice to the company.

Anhui argued that its rights and property had been infringed on by the Government’s action.

It said it was not afforded a chance to protect its rights.

Anhui described the action by Government as arbitrary and disproportional conduct.

But Minister Chidhakwa, Commissioner-General of Police Dr Augustine Chihuri, Marange Resources, Zimbabwe Mining Development Corporation opposed the application, while Home Affairs Minister Ignatius Chombo and Jinan said they would abide by the court ruling.

Advocate Lewis Uriri, who acted for Minister Chidhakwa and Adv Sylvester Hashiti, who appeared for Marange Resources and ZMDC, argued that the Chinese company knew the consequence of failing to seek renewal of the grants would be a cessation of the mining operation.

Adv Uriri made submissions to show that the application was defective and that Chinese laws, which the applicant sought to rely on were not applicable in Zimbabwe.

In the application Jinan was seeking an order quashing the notice for their eviction and shutdown of operations in Chiadzwa.

The company also sought to prevent the police from disturbing its mining operations at Chiadzwa.

In a founding affidavit deposed by Jinan director Mr Zhang Shibin, the company said it had invested more than $100 million in the project and it employed thousands of locals.

He stated that one of the applicant’s shareholders is a Chinese entity whose rights are protected in terms of the Agreement between the Government of the People’s Republic of China and the Government of the Republic of Zimbabwe on the Encouragement and Reciprocal Protection of Investments.

According to Mr Shibin, in terms of the agreements, no expropriation or similar measures against an investor’s rights in Zimbabwe might be taken without following due process and against payment of compensation.

Jinan argued that the process was illegal in that Government did not allow them to make representations on the issue to the permanent secretary (in the Mines and Mining Development Ministry) as per agree- ment.

The company argued that Government’s process was flawed in several respects.