Judgment Day for Mbada Diamonds

Chief Court Reporter
The High Court is today expected to deliver judgment in the case in which Mauritius-registered Grandwell Holdings, with a 50 percent controlling stake in Mbada Diamonds (Private) Limited, is involved in mining dispute with the Government of Zimbabwe.

Mbada returned to the diamond mining site in Chiadzwa to secure its equipment pending determination of the dispute after it obtained a temporary reprieve from the same court.

Parties to the dispute have since been notified of the judgment today.

Grandwell Holdings and Marange Resources entered into a joint venture mining partnership in which the two held 50 percent each some seven years ago.

A diamond joint venture company, Mbada Diamonds was formed, which carried out diamond mining activities in the Chiadzwa area in terms of the set conditions.

Government ordered all diamond mining companies off the Chiadzwa fields after they defied a policy directive for all to merge into a single company called the Zimbabwe Consolidated Diamond Company (ZCDC).

Mbada, among other diamond firms, was given 90 days to remove its equipment and other assets from the site. However, Grandwell is seeking the eviction of the Ministry of Mines and Mining Development and representatives of the Zimbabwe Mining Development Corporation, Marange Resources and the Zimbabwe Consolidated Diamond Company from the mining site.

The company is also seeking restoration of its full control, peaceful and undisturbed possession of the mining site. Grandwell Holdings holds 50 percent of the issued share capital of Mbada while the remaining 50 percent is held by Marange Resources, which is wholly owned by ZMDC.

Government accused Mbada of failing to renew the special grant, hence the expiration of such grants now requires the company to shut down its operations and vacate the premises.

However, Grandwell in its application, argued that Marange Resources, a Government company, undertook to do the renewal of the grants among other warranties on behalf of the joint venture company.

Grandwell argued that Government, through Marange Resources, undertook to protect the rights of the foreign investor and to “observe the utmost good faith and not do, or omit to do anything which might prejudice or detract from the rights or interests” of the foreign investor.

The company argued that Government had wilfully and with malice, breached its obligations and undertakings.

Grandwell said Mbada, over the existence period of the joint venture agreement, paid $472 million into the fiscus, a figure which will drop to zero if the company’s operations are permanently shutdown.

The company stated that diamonds were being stolen from the mining sites in the absence of Mbada’s security personnel and there was need for an order compelling Government to allow the diamond company’s security team back to the site.

It was also claimed that Mbada’s equipment was being misappropriated and damages were being sustained on an on-going basis.

Pin It