In Vedanta v Lungowe, the UK Supreme Court ruled that KCM, the subsidiary of London-listed Vedanta could be sued in the English courts despite many factors connecting the dispute to Zambia. Perhaps aware of the sensitivity of bringing KCM under English jurisdiction and conscious of the need to exercise restraint on grounds of comity, the Supreme Court had emphasised the cogent evidence taken into account that led to the conclusion that substantial justice could not be achieved in Zambia. As highlighted here, this was a bold decision given that the Zambian government places huge importance on KCM and owns shares in the company. These comity concerns are now reflected in the [unrelated] announcement of the Zambian government that it is seeking to ‘divorce’ from Vedanta, a procedure that could result in the nationalisation of KCM.
Over the weekend, Zambian President Edgar Lungu announced that the government was considering nationalising or seizing the assets of KCM and ‘divorcing’ from Vedanta after KCM miners’ wives decried KCM’s management and called on the government to step in. The announcement was also prompted by a dispute over taxes and alleged breaches of operating licences by KCM. The President’s spokesman added that the government had already received interest in KCM’s assets from other foreign investors. The announcement reflects the sensitivities around the importance of KCM to Zambia’s economy. According to KCM’s spokesperson, it is the country’s largest Pay As You Earn contributor and has contributed over $1.4 billion to the Zambian economy.
KCM and copper mining evoke strong patriotic and nationalist sentiments in Zambia, as such the government’s announcement should be taken seriously. If KCM is nationalised then the English courts will be engaging with a politically and economically charged foreign government company under new management. Practical complications may arise out of the fact that KCM will no longer be under the control of Vedanta raising potential difficulties with accessing documents and calling witnesses that may be crucial to the substantive hearing. Given the nationalist fervour involved in this dispute, the English Courts’ desire not to be accused of ‘colonial condescension’ may prove difficult in reality.
On the other hand, it may be that this crisis presents an opportunity for the claimants and the Zambian government to unite against a common foe, Vedanta. However, it is difficult to see such unification given that the Zambian government had opposed English courts’ jurisdiction over KCM. If the Zambian government has complaints over Vedanta’s handling of KCM, I imagine they’d want to be in control of any process seeking to hold Vedanta accountable.
It is impossible to predict how this situation will be resolved and whether despite the potential nationalisation of KCM, the claimants will obtain justice. What is certain is that access to justice is not guaranteed simply because the dispute will be heard in English courts.