Kapsch Trafficcom AG v Lamise Trading Limited and Anor (CAZ/08/218/2025) [2025] ZMCA 87 (17 June 2025)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT LUSAKA (Civil Jurisdiction) CAZ/08/218/2025 BETWEEN KAPSCH TRAFFICCOM A. G APPLICANT AND LAMISE TRADING LIMITED 1 sT RESPONDENT INTELLIGENT MOBILITY SOLUTIONS LTD 2N° RESPONDENT Before the Hon. Lady Justice F. M. Chishimba in Chambers. For the Applicant: Mr. K. Phiri and K. Kawana of Messrs Corpus Legal Practitioners For the 1st Respondents: Mr. J. Chileshe of Messrs Eric Silwamba, J alasi & Linyama For the 2 nd Respondent: Mr. C. Salati and Mr. P. Chisunka of Messrs Mulenga Mund ashi Legal Practitioners RULING CASES REFERRED TO: 1. Breza Engineering Ltd v GN International Limited and Konkola Copper Mines PLC (S. C. Z Judgment No 2 of 2010, 2. Status Mineral Exploration Limited v Ocean Ore Limited and Another 2012/HPC/ 174 3. UMA Shankar v Oriental Bank of Commerce C. R. P No 1856 of2019 4. ZCCM Investments Holdings PLC v Vendanta Resources Holdings and Konkola Copper Mines PLC SCZ Judgment. No 13 of 2021 R2 5. Moba Holte and Convention Centre v Lyco Business Solut ions Limited Appeal No.66/2022 6. Global Freight Limited vs Benjamin Bwalya Appeal 133 of 2020 7 . LC and DK Limited (in Receivership) Angel Poultry Limited v Love more Chikuni Chinyama CAZ/ 08 / 409 / 2020 8. Rose Gabekile Fatudge v Bhekinkhosi Tsabedge and Lundiwe Tsabedze Civil Appeal No. 73/2003. 9. Intelligent Mobility Solutions Limited and Kapsch Trafficom A. G v Lamise Trading Limited (Suing in its Capacity shareholder of Intelligent Mobility Solutions Limited CAZ/08/568/2024 10. Ravasia Petrolum Limited v Kutasha Industries (PTY) (T / A LIQUID SOLUTIONS RSA) Appeal 40/2023 LEGISLATION REFERRED TO: 1. The Rules of the Supreme Court of England 1965 ( 1999 ) Edition 2. The Court of Appeal Act No 7 of 2016 1.0 INTRODUCTION 1.1 The applicant by Summons applied for an Order for leave to appeal to the Supreme Court as well as a for a stay of proceedings pending the hearing and determination of the farmer application. The applications were made pursuant to section 12 (2) and 23 (1) (c) of the Court of Appeal Act No 7 of the Court of Appeal Rules 2016 as well Order 59 Rule 13( 1) of the Rules of the Supreme Court of England 1999 Edition. 2.0 AFFIDAVITS BY THE PARTIES R3 2.1 In support of the application for leave to a ppeal, the applicant relied on its affidavit dated 7 th May 2 025. The background to the application is as fallows; that u n der cause 2021/HPC/0736 instituted by the 2 nd respondent, the applicant applied for an Order for to stay proceedings and refer the matter to Arbitration. The Court below refused to stay proceedings and dismissed the application. The applicant subsequently applied for leave to appeal to the Court of Appeal on 16th April 2024. The said application was rejected by the lower Court. 2.2 According to the deponent, on 30th April 2024, the 2 nd respondent on the instruction of the 1st respondent filed a Notice of Discontinuance of cause 2021/HPC/0736, which rendered the applicant's application for leave to appeal otiose, the underlying matter being no longer subsisting. 2.3 The 1st Respondent recommended the action u n der cause number 2024/HPC/0339. On 27th February 2025 the applicant, therefore, filed an application to stay p roceedings and to refer the matter to Arbitration. On 31 st March 2025, R4 the High Court delivered a ruling denying the application on the ground that the matter was res judicata. The applicant applied for leave to appeal to the Court of Appeal against the above ruling. The Court below declined to gran t leave to appeal on the 6 th May 2025. Hence, the renewed application before me. The applicant deposed that the intended appeal has merit and leave to appeal be granted. 2.4 In support of the application for a stay of proceedings, the applicant stated that unless a stay is granted, the Court will proceed to hear and determine the derivative a ction. This would render the application for leave to appeal and subsequent appeal nugatory as well as a mere academic exer cise, trial date having been set. That no prejudice will b e occasioned by the stay of proceedings pending determination of leave to appeal to the Court of Appeal. 2.5 The 1st respondent filed an affidavit in opposition dated 15th May 2025 in which it brought to my attention the anti - suit injunction application issued in the Western Cape, High Court of South Africa. I shall not refer to it a s it is not relevant to the application for leave to appeal and to stay RS proceedings. Save to state that it appears that the applicant sought a declaratory relief in the Courts of law in South Africa based on the fact that the Zambian proceedings are subject to arbitration and should be withdrawn pending referral to arbitration. 2 .6 The 1st respondent had commenced a derivative action in its capacity as shareholder of the 2 nd Respondent. A single Judge of this Court determined that the said application was properly commenced. 2 . 7 In opposing the application for leave to appeal, the 1st respondent deposed that the application has no prospects of success as per intended grounds of appeal. No does it raise important question of law or of public important as the issues only affect the parties to the case. 2.8 In opposing the stay of proceedings sought , the 1st respondent stated that this Court is not vested with requisite jurisdiction to hear and determine the application as there is no appeal, merely an application for leave to appeal. The Order of 7 th May by this Court granting a stay of proceedings ex- parte is fundamentally flawed as it was granted pending R6 the hearing and determination of the application for leave to appeal and the subsequent appeal. The Order is grossly premature as it has suspended proceedings in the Court below and prejudices the right to be heard on the merits. 2.9 The applicant filed affidavits in reply to both applications dated 23 rd May 2025. Only the relevant material will be referred to. In regard to the South African proceedings, same are stated to be distinct subject matter, which do not affect or relate to this matter subject of the intended appeal. 2 .10 The shareholders agreement provided for a forum to resolve disputes by way of arbitration. The Intended appeal has merit as the applicant did not have an opportunity to explore all legal avenues under the first action due to the Notice of Discontinuance. The said intended appeal does raise importance questions of law to be determined by the appellate Court. 2.11 As regards the stay of proceedings, the applicant deposed that the application to stay proceedings referred to by the 1st respondent is of a varying subject matter. The High Court refused to stay proceedings because it had no jurisdiction to R7 grant the said application pending leave to appeal. That the application to stay proceedings would have equ ally been denied in the High Court as it had no leg to stand on as held by the Hon. High Judge in the derivative action. The ruling of the High Court dated 27th February 2025 was referred to which declined to stay proceedings pending an application for leave to appeal to Court of Appeal. Much of the averments in the affidavit in reply for stay of proceedings are repetitive of the affidavit in support for leave to appeal and I shall not rehash . 2.12 The applicant states that the 1st respondent does not have a right to prosecute the suit in the High Court when there is an arbitration clause subsisting between the parties. Hence the stay of proceedings sought. 2 .1 3 In respect of the granted Ex - parte Order staying the proceedings, that it is not defective as it was granted pending leave to appeal and will continue to take effect once leave to appeal is granted. The stay of proceedings will preserve and maintain the status quo of the High Court proceedings. R8 3.0 IN SKELETON ARGUMENTS OPPOSITION OF THE APPLICATION FOR LEAVE TO APPEAL AND TO STAY PROCEEDINGS SUPPORT AND IN 3.1 The applicant submits that the Court has jurisdiction pursuant to section 23(1) (e) and section 12 (2) of t he Court of Appeal Act (CAA) 2026, as well as Order 10 Rule 4(5) of the Court of Appeal Rules (CAR) to grant the sought application. 3.2 As regards whether sufficient reasons have been demonstrated, reference was made to the intended grounds of appeal, which are said to raise important questions of law for our determination such as whether the principle of re judicata extends to interlocutory application, whether a ruling can be considered final where the Applicant is precluded from lodging an appeal, due to the actions of the other party. Also issues such the effect of a Notice of Discontinuance on a leave to appeal application and enforceability of an arbitration agreement providing for a multitiered dispute resolution clause. 3.3 In regard to the reasonable prospects of success of the intended appeal, a plethora of authorities were cited such as R9 Breza Engineering Ltd v GN International Limited and Konkola Copper Mines PLC'1 ' and Status Mineral Exploration Limited v Ocean Ore Limited and Another121 to mention a few. 3.4 The applicant contends that the intended grounds of appeal are meritorious. That the principle of res judicata does not extend to interlocutory applications. The case of Uma Shankar v Oriental Bank of Commerce131 wa s cited as authority, in which the lower Court declined to stay proceedings and refer the matter to arbitration because of res judicata. That interlocutory proceedings cannot be rejudicata since they do not pertain to the substantive issues of the case. 3.5 Further, that the lower Court was legally entitled to vary or alter the first Arbitration Ruling. The varying circumstances of the two applications for referral to arbitration renders the res judicata principle inapplicable. Therefore the lower Court was entitled to consider the second application for reference to arbitration 3.6 The Notice of discontinuance could not be challenged as the RlO action was brought to an end, contrary to the cou rt's ruling that the applicant ought to have challenged the discontinuance. Order 21/5/14 of the Rules of the Supreme Court of England (RSC) on the effect of an appeal in respect of a discontinued action was referred to that the appeal in that action becomes ipso facto vacated. It was contended that the above scenarios is applicable to the application herein. Challenging a Notice of Discountenance is tantamount to a defendant imploring the Court to issue an Order compelling the plaintiff to continue an action against it. 3 . 7 The applicant in relation to the intended grounds 2 and 3 submit that the Court below did not consider its application to stay proceedings and refer the matter to arbitration, thereby failing to address the effect of the arbitration clause in the Articles of Association and Shareholders Agreement and whether a derivative action is capable of being referred to arbitration. The cases of ZCCM Investments Holdings PLC v Vendanta Resources Holdings and Konkola Copper Rll Mines PLC141 and Moba Holte and Convention Centre v Lyco Business Solutions Limitedl51 were cited on the effect of an arbitration clause. 3.8 The applicant went on to submit on the decision of the Court to expunge paragraphs 15, 17, 18, 19,21 and 23 of the 1st defendant's affidavit for containing extraneous matter by way arguments, conclusions and prayer. That the Court did not avail the applicant an opportunity to be heard before arriving at this finding. Reference was made to the case of Rapid Global Freight Limited v Benjamin Bwalya161 on the principle of natural justice. 3. 9 In respect of the application for stay proceeding, the applicant in its arguments submits that we have jurisdiction under Order 10 Rule 5 of CAR to grant a stay of proceedings. That the applicable principles in the grant of a stay of proceedings are the prospects of success, and that good and sufficient reasons must be shown. The case of LC and DK Limited (in Receivership) Angel Poultry Limited v Lovemore Chikuni Chinyama171 was cited as authority. The applicant went on to demonstrate sufficient reasons i.e. that R12 the appeal with be rendered academic and nugatory if a stay of proceedings is not granted. Further, that not staying proceedings in the High Court will lead to prejudice being occasioned to the applicant in that leave to appeal was yet to be granted. Instead, the status quo will be maintained by the order of stay of proceedings until leave to appeal is granted and the subsequent appeal is head and determined by the Court of Appeal. 3.10 As regard whether the intended appeal has pr ospects of success, the applicant repeated its submissions made 1n support of the application for leave to appeal. I shall not rehash the said arguments which I have taken note of appearing at pages 9 to 15 of its arguments. I wa s urged to stay proceedings pending the determination of the application for leave to appeal and to grant leave t o appeal. 3.11 The 1st respondent filed skeleton argument in opposition to summons for an order to stay proceedings and for leave to appeal. In respect of the stay of proceedings, it is submitted that the application is irregular because the applicant did not demonstrate that it approached the High Court for an Order R13 of stay of proceedings pending hearing and determination of the application for leave to appeal. The procedural requirement of first approaching the lower Court is not limited to applications for leave to appeal. The actions of the applicant flys within the doctrine of approbation and reprobation as stated in the Eswatine case of Rose Gabekile Fatudge v Bhekinkhosi Tsabedge and Lundiwe Tsabedzel81 3.12 I was implored not to entertain the argument tha t the High Court would have lacked jurisdiction to hear an application for a stay pending determination of the application for leave to appeal. Hence, the Ex parte Order granted is a nullity. 3.13 In the alternative, it was argued that the applicant has failed to discharge the burden of proof. An appeal does n ot operate as a stay on the Order appealed against. Order 5 9 / 13/2 of RSC was referred to on the granting of a stay where good reasons are shown. That an applicant must demonstrate that the intended appeal has reasonable prospects of success, that the applicant will suffer irreparable harm and that the balance favours the grant of a stay. There being no subsisting appeal, granting a stay of proceedings will open R14 the door to every party desirous of appealing to seek stays without determination or grant of leave to appeal. 3 . 14 The case of LC and DK Limited (In Receivership and Angel Poultry Ltd supra was distinguished from the case in casu. Further that no compelling evidence was presented to substantiate the assertions that proceeding to trial will render the appeal nugatory and a mere academic exercise. In casu, a stay of proceedings is sought to curtail on going trial without a pending appeal. I was urged to dismiss the application because no appeal has been filed or leave granted etc. 3.15 In the alternative, the 1st respondent submits that the Court executed a defective order which prima facie insinuates that I had already granted leave to appeal vis ·a vie the stay pending a subsequent appeal. 3.16 The 1st respondent drew my attention to the cases of Intelligent Mobility Solutions Limited and Kapsch Trafficom A. G v Lamise Trading Limited (Suing in its Capacity Shareholder of Intelligent Mobility Solutions Limited191 and Ravasia Petrolum Limited v Kutasha RlS Industries (PTY) (T / A LIQUID SOLUTIONS RSA)l101 on stay of execution pending appeal. 3.17 In respect of the arguments in opposition to the application for leave to appeal to the Court of Appeal, the 1s t respondent made reference to the matter filed before the South African Court which conduct is said to amount to forum shopping and an abuse of process. This is because the applicant relied on the same arbitration clause. 3.18 As regards the threshold to be met in the grant of leave to appeal, reference was made to a number of authorities including Intelligent Mobility Solutions and Kapsch Trafficcom (supra) before Judge Makungu on the preview by the Courts of the prospects of success of the intended appeal and compelling reasons for the appeal to be heard. 3.19 As to whether the applicant has demonstrated sufficient reason, the 1st respondent contends that no sufficient reasons have been advanced. The important questions intended to be raised fail to meet the test for the grant of leave to appeal. The 1st respondent went on to address each of the questions raised in the intended grounds of appeal. I will not R16 rehash save to state that I have taken note of the submissions. 3.20 Counsel submits that the intended grounds of appeal have no merit. I note that the submissions by Counsel for the 1st respondent are repetitive on the intended grounds of appeal particularly the issue on re judicata. 3.21 At the hearing of the matter, the parties reiterated the submissions m their respective skeleton arguments and prayers. 3.22 The applicant filed affidavits in reply to summons for an order of leave to appeal and to stay proceedings dated 28 th May 2025. I will not rehash in detail the said submissions. In summary the applicants contends that it has met the threshold to be granted leave to appeal, that the application to stay and refer the matter to arbitration was not res judicata, that the intended appeal raises novel issues or issues of public importance. Further, derivative actions such as 1n casu which contained an arbitration clause (Shareholders Agreement) ought to have been referred to arbitration. In addition, that the applicant's actions do not R17 constitute abuse of Court process or forum shopping as the South African proceedings pertained to an injunctive relief, distinct from the subject matter for leave to appeal. 3.23 In response to the affidavit in opposition to the stay proceedings, the applicant submits that this is an appropriate case to stay proceedings as the appeal will be rendered a mere academic exercise. Further, tha t it will suffer irreparable harm if not granted a stay as well as cause utmost prejudice to the applicant. 3.24 As regards the contention that the Ex- parte Order granted by the Court is defective, the applicant submits that the Order did not pre-empt the decision of this Court. It sought a stay pending the determination of the leave to appeal and a stay of execution. 3. 25 In regard to the issue whether the application for a stay of proceedings ought to have been made before the High Court in the first instance before being renewed in this Court, the applicant's position is that due to the circumstances of this case, it could not competently do so before th e lower Court. This is because the stay of proceedings is premised on the R18 hearing and determining of leave to appeal before this Court and no longer with the High Court. I was urged to grant a stay of proceedings pending determination of leave to appeal. 4.0 DECISION 4.1 I have considered the application for leave to appeal and to stay proceedings pending appeal or pending determination of leave to appeal. I have also considered the arguments and authorities. The undisputed facts precipitating the applications before this Court are that, the 2 n d Respondent had instituted under cause 2021/HPC/0736 an action against the applicant seeking damages for breach of fiduciary duties, consequential loss of capital investment and return on the terminated Concessions Agreement. The applicant (defendant) applied for an order to stay proceedings and to refer the matter to arbitration on the basis that the Shareholders Agreement and Articles of Associa tion provided for resolution of dispute by arbitration pursuant to the cited clause 83 and 38 of the two agreements above . The lower Court found the arbitration prov1s1on incapable of performance pursuant to the Arbitration Act . The lower R19 Court dismissed the application. Subsequently on 30th of April, 2024, the 2 nd respondent filed a Notice of Discontinuance of the matter. According to the applicant, it could not file a notice of appeal against the refusal to refer matter to arbitration because the matter under Cause 2021 / HPC / 0736 had been discontinued. 4.2 The 1st respondent, Lamise Trading Limited commenced under cause 2024/HPC/0339 a matter against the applicant and 2 nd respondent seeking the exact reliefs as 1n the discontinued caused. On the 27th February, 2025, the applicant filed summons for an order to stay proceedings and to refer the matter to arbitration pursuant to Order 10(1) of Arbitration Act number 19 of 2000 on the same grounds as the earlier application in cause 2021 / HPC/ 0736. 4.3 The learned Judge dismissed the application on ground that the issue of reference to arbitration was det ermined with finality under cause 2021/HPC/0736. In a nutshell, the application to refer the matter to arbitration was dismissed based on the principle of re judicata. 4. 4 An application for leave to appeal to the Court of Appeal made R20 on the 11th April 2025, in th e Cou rt below by the applicant was dismissed for lack of merit. Hence the revived application for leave to appeal before th is Cou rt. 4. 5 In respect of the application for leave stay of proceedings pending determin ation of leave to appeal, the record shows that the applicant did not apply to th e Cou rt below for a stay of proceedings, instead it ru shed to this Court for a stay pending hearing and determination of the application for leave to appeal to the Court of Appeal and determination of the subsequent appeal. 4 .6 In regard to the stay of p r oceedings sough t , I 'am of the firm view that the application is improperly and irregularly before this Court on account of failure to comply with the provisions of Order 13 Rule 12 of the Court of Appeal Rules which stipulates as follows: "Where an application may be made to the Court or the High Court. It shall be made in the first instance to the High Court" Order 10 Rule 5 of the CAR provides as follows: "An appeal shall not operates as a stay of execution or of proceedings under the judgment appealed against unless the High Court, quasi - judicial body or the Court so orders and R21 no intermediate act or proceedings shall be invalidated, except so far as the may direct." 4.7 The applicant did not comply with the provisions of Order 13 Rule 12 by the failure to the first instance apply for a stay of proceedings before the High Court prior to the launching of the application before this Court. The application therefore is irregular as it ought to have been made in the High Court and upon refusal, renewed application ou ght to have made before the single Judge in the Court of Appeal. For the above reasons, I a ccordingly dismiss the application for a stay of proceedings pending application for leave to appeal on account of irregularity. 4.8 In respect of the application for leave to appeal to the Court of appeal, it is trite that leave will be granted where there are reasonable prospects of success. Section 12(2) of the Court of Appeal provides that a single Judge of the Court may grant leave to appeal where appellant is denied leave to appeal by the High Court or quasi - judicial of body. 4.9 The proposed grounds of appeal are as follows: 1) That the Court below erred in law and in fact when it suo moto proceeded to make a R22 determination at page R9 of the Ruling regarding the authentication of the Affidavit in Support of Summons for an Order to stay proceedings and refer the matter to arbitration which resulted in the Court erroneously expunging the said Affidavit when n one of the parties herein raised the issue of a u thenticity and also without hearing the Defendant on the issue of authenticity prior to the Court making a determination on the same. 2) That the Court erred in law and in f a ct when it held at page R9 of the Ruling that the Affidavit in Support of Summons for an Order to Stay Proceedings and Refer the matter to Arbitration was improperly before the Court for want of authentication of the power of Attorney notwithstanding that the power of Attorney was authenticated in accordance with the Authentication of Documents Act Chapter 75 of the Laws of Zambia. R23 3) That the Court below erred in law and in fact when it held at page Rl 1 that the Arbitration clause was incapable of performance for not having met preconditions for submission of the dispute for arbitration as agreed on by the parties notwithstanding that there was evidence on record of a request for medication by the Defendant which request was rejected by the Plaintiff. 4) That the Court below erred in law when it held at page R 11 that the arbitration provision was incapable of performanc~ as provided by Section 10(1) od the Arbitration Act No 19 of 2000 notwithstanding that the circumstances herein did met the requirements of the foregoing provision thereby warranting the dispute therein to be refereed to arbitration. 4 . 10 I am entitled as a Court to preview the intended grounds of appeal to assess whether the appeal has reasonable/ realistic prospects of succeeding. Without delving into the ... R24 merits of the said appeal, a perusal of the intended grounds in my view, shows no prospects of success. The ruling subject of appeal dismissed the sought stay of p roceedings and reference of the matter to arbitration on the basis of res judicata, having been earlier determined in an earlier cause between the same parties. It is for this reason, that I'm of the firm view, that there are no prospects of success of the intended appeal. 4.11 The reason advanced that the applicant could not appeal the earlier ruling because the matter was discontin ued is not tenable. Though the applicant contends that it h ad filed an application for leave to appeal before the notice of discontinuance, the Court below addressed this issue and dismissed the assertions. If indeed there was a pending application for leave to appeal the first ruling before Notice of Discontinuance was filed, the applicant ought to have challenged the discontinuance of the matter whilst there was a pending application. Instead of contending that the leave to appeal was rendered ipso facto vacated. .. .. 4. 12 Perusal of the other grounds of appeal reveals no prospects R25 of success in my view and I shall not belabou r the point. Save to reiterate that the application subject of the intended appeal, i.e. stay of proceedings and reference of the dispute to arbitration having been earlier determined in cause 2021/HPC/0736 was found by the Court below to be res judicata. In my view, the appeal has no prospect s of success based on the above finding therein in the Court below. 5.0 CONCLUSION 5.1 For the forgoing reasons, I accordingly d ecline to grant leave to appeal and to stay proceedings. I hereby dismiss the applications to stay proceedings pending appeal and for leave to appeal. Costs to the 1st respondent to be taxed in default of agreement. Dated the 17th day of June 2025 Hon. Mrs. Justice F. M. Chishimba COURT OF APPEAL JUDGE