Diamond Firm Sues Zimbabwe Govt Over U.S.$14m
Pure Diam DMCC, whose mining licence was terminated by the government in 2016, paving way for the formation of the Zimbabwe Consolidated Diamond Company (ZCDC), has instructed the High Court Sheriff to seize diamonds owned by the state-run entity in a bid to recover over US$14 million, the Zimbabwe Independent has learnt.
This follows an October 11 2018 High Court ruling in favour of Pure Diam instructing the ZCDC to pay the Asian diamond miner “US$14 055 312,00 inclusive of interest accrued till 30 April 2018.”
The state-run mining firm is also liable to pay an additional US$561 371 to Pure Diam “being further interest at the rate of 5% per annum from 1 May 2018 to date of payment in full”.
Held under case number HC4899/18 and heard by Justice Munangati Manongwa, the Zimbabwe Mining Development Corporation (ZMDC), which entered into a mining joint venture with Pure Diam in 2010, was cited as the first defendant while the ZCDC is the second defendant.
Prior to the cancellation of its licence, Pure Diam was operating under Diamond Mining Corporation (DMC) in partnership with ZMDC.
In 2010, Pure Diam extended a loan of US$8 million to DMC, while its shareholding value stood at US$10,9 million in the joint venture.
However, in 2016, government revoked Pure Diam’s licence along with those of other players operating in Chiadzwa before the mining firm had recouped its investment capital in Zimbabwe, resulting in the dispute.
According to the letter addressed to the High Court sheriff dated 27 May 2019 seen by the Independent, lawyers representing Pure Diam are pushing to attach diamonds owned by the ZCDC kept at the Minerals Marketing Corporation of Zimbabwe (MMCZ) premises in a bid to recover over US$14 million from the state-run miner.
Pure Diam approached the Sheriff after the ZCDC failed to comply with the High Court ruling. Before the latest instruction to the High Court sheriff, Pure Diam had also sought to attach two properties owned by the ZCDC.
“You would recall that we previously instructed you to attach the two judgment debtors’ movable assets at their offices, being 80 Mutare Road Msasa, Harare and 35-37 Cosham Road Borrowdale Harare, respectively,” part of the letter of instruction to the High Court Sheriff reads.
“We advise that both the judgment debtors in the above matter have failed to liquidate the judgment debt in full and in the circumstances we have been instructed to attach further assets belonging to the Zimbabwe Consolidated Diamond Company.
“We therefore instruct that you further attend to the MMCZ building at Number 80 Msasa Road Mutare and attach the judgment’s debtors assets being diamonds which are kept in the vault room.”
Lawyers representing Pure Diam, Gill Godlonton and Gerrans, also instructed the Sheriff to advise the ZCDC against auctioning or moving the “diamonds from the vault until the judgment debt has been fully satisfied”.
The High Court sheriff was also ordered to record the carats of all the attached diamonds and package numbers.
The sheriff has, however, not yet attached the diamonds.