Konkola Copper Mines Plc v U&M Mining Zambia Ltd

Konkola Copper Mines Plc v U&M Mining Zambia Ltd

There is a real risk that KCM will not be able to pay U&M’s costs if ordered, given its financial position, lack of liquid assets, and conduct in resisting enforcement. It is just to order security for costs under s70(6). However, there is no evidence that the challenges to the award prejudice U&M’s ability to enforce the award in Zambia, and thus no basis to order security for the sums due under s70(7).

Parties
Claimant: Konkola Copper Mines PLC; Defendant: U&M Mining Zambia Ltd
Jurisdiction
England and Wales
Judgment Date
02 July 2014
Procedural Posture
Commercial Arbitration Challenge / Ruling on Applications for Security for Costs and Security for Sums Due Under Arbitration Award
Outcome
Application for security for costs granted; application for security for sums due under award refused.
Legal Topics
Security for Costs, Enforcement of Arbitral Awards, Jurisdictional Challenge, Serious Irregularity in Arbitration, Dissipation of Assets
Arbitration Commercial Law Security for Costs Enforcement of Arbitral Awards Jurisdictional Challenge Serious Irregularity in Arbitration Dissipation of Assets

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Parties

Konkola Copper Mines PLC

Claimant

U&M Mining Zambia Ltd

Defendant

Procedural Posture

Commercial Arbitration Challenge / Ruling on Applications for Security for Costs and Security for Sums Due Under Arbitration Award

Legal Issues

  1. 1 Whether security for costs should be ordered under s70(6) Arbitration Act 1996 in respect of challenges to an arbitral award
  2. 2 Whether security for sums due under the award should be ordered under s70(7) Arbitration Act 1996
  3. 3 Whether the applicant demonstrated a real risk that the respondent would be unable to pay costs if ordered

Ratio Decidendi

There is a real risk that KCM will not be able to pay U&M’s costs if ordered, given its financial position, lack of liquid assets, and conduct in resisting enforcement. It is just to order security for costs under s70(6). However, there is no evidence that the challenges to the award prejudice U&M’s ability to enforce the award in Zambia, and thus no basis to order security for the sums due under s70(7).

Court Disposition

Application for security for costs granted; application for security for sums due under award refused.

Orders

  • KCM to provide security for costs in the sum of £300,000 under s70(6) Arbitration Act 1996.
  • Application for security under s70(7) Arbitration Act 1996 refused.