Chiadzwa diamonds fallout: Govt-owned ZMDC’s bid to evade US$378m lawsuit fails

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By Mary Taruvinga I Senior Reporter

THE High Court has dismissed an application by Zimbabwe Mining Development Corporation (ZMDC) which is being sued FOR US$378 million by a foreign investor company Grandwell Holdings over cancellation of the Chiadzwa diamond mining contract.

ZMDC and its subsidiary, Marange Resources was seeking to have the lawsuit dismissed but filed their application out of time.

High Court Judge, Justice Joseph Chilimbe threw the application out in its entirety.

“In the final analysis, the applicant did not proffer a plausible reason for having failed, in the first instance, to timeously file their special plea,” said the judge.

The judge also said the applicants failed to provide a reasonable explanation for the lengthy one-and-a-half year delay in filing the application for condonation.

“The disputes between the parties must be put to bed,” he said.

“I believe that it will be in the best interest of justice that this matter proceeds to trial on the issues identified during the pre-trial conference. I am not persuaded that the applicants have tendered good and sufficient cause for condonation and, as such, the application will be declined.”

Grandwell Holdings is involved in a string of legal battles with the government and ZMDC over the cancellation of the diamond mining contract.

In 2020 the company dragged ZMDC to court, demanding US$378 536 300 in damages following the termination of the contract.

Among other things, the company demanded restitution for the money it invested in the project, management fees, projected profits lost as well as the damage to property by artisanal miners following the cancellation of the contract.

According to court papers, in August 2019, the government through its parastatal ZMDC, agreed a joint venture with Grandwell Holdings.

They formed Mbada Diamonds in order to exploit the Chiadzwa diamonds in permanent deal.

Grandwell Holdings and ZMDC were both equal partners with the investor injecting US$100 million in tranches and ZMDC ensuring that the special mining grants be renewed to ensure perpetuity of the contract.

Unexpectedly, the government wrote to Mbada Diamonds advising it to stop all mining operations citing that special grants had expired.

The investor was forced to stop all operations and lost a lot of property to artisanal miners during that period.

This prompted legal proceedings.