MG Commodities Zambia Limited and Anor v Bluecrest Resources AG Pty and 3 Ors (2024/HP/0341) (22 July 2025) – ZambiaLII

1;( 2024/HP/0341 IN THE HIGH COURT FOR ZAMBIA AT THE PRINCIPAL REGISTRY HOLDEN AT LUSAKA (CIVIL JURISDICTION) BETWEEN MG COMMODITIES ZAMBIA LIMITED 1ST PLAINTIFF BLUECREST RESOURCES AG P-TY 2ND PLAINTIFF AND DEFENDANT 1ST PATRICK MANGE 2ND DEFENDANT ALICK MAKELANI 3RD DEFENDANT LESUCHO ZAMBIA LIMITED DEFENDANT 4TH Before the Honourable Mr. Justice G. C. Mulenga on 10th April 2025 and 22nd July 2025. For the Plaintiffs: Mr. ZM Mubiana and Mr. M Mbulakulima of Messrs. Nsapato and Company Advocates For the Defendants: Mr, M. Mulele of Messrs. GM Legal Practitioners RULING ON INTER-PARTY APPLICATION FOR A MAREVA INJUNCTION Cases Referred To: 1. Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 ALL ER 213. 2. Kalymnos Processing Limited and Another v Konkola Copper Mines Pie (In Liquidation) - Application No. 60/2023. R -1 2024/HP/0341 3. Turnkey Properties v Lusaka West Development Company Ltd and Others ( 1990) ZR 1. 4. TSB Private Bank International SA v Chabra [1992] 2 All ER 245. 5. SCF Finance Co Ltd v Masri [1985] 2 All ER 747. 6. Cruz City 1 Mauritius Holdings v Unitech Ltd and others [2014] EWHC 3704 (Comm). Legislation Referred To: 1. High Court Rules, Chapter 27 of the Laws of Zambia. 2. The Rules of the Supreme Court of England 1965. 1. INTRODUCTION 1. 1. This ruling relates to an application heard inter partes on 10th April 2025 to confirm or discharge the interim Mareva injunction order which I had granted ex-parte in favour of the Plaintiffs following an application dated 11th March 2025. 1.2. The Defendants responded to the application in two ways. Their first reaction was to file their opposition to the Plaintiffs' application on 31st March 2025. Next, the Defendants filed, on 8th April 2025, an ex parte application to discharge the interim Mareva injunction order. 1. 3. I should mention at the outset that I have taken account of the Defendants' discharge application in my evaluation of whether or not the Mareva injunction should be made interlocutory. Accordingly, I have treated what arguments the Defendants have R-2 2024/HP/0341 advanced in prosecution of the discharge application as an opposition to the confirmation of the Mareva injunction. 2. BACKGROUND 2.1. According to the statement of claim filed on 6th March 2024, the 1st Plaintiff is a Zambian incorporated company and is primarily engaged in the wholesale trade of metals and metal ores and in other non-specialised trade. The 2nd Plaintiff is a company incorporated in Switzerland, and is engaged in the business of purchasing copper concentrates. 2.2. The 1st, 2nd and 3rct Defendants were officers of the 1st Plaintiff. The 1st Defendant was the Chief Operations Officer primarily responsible for the daily administrative and operational functions of the 1st Plaintiff. The 2nd Defendant was employed as an accountant of the 1st Plaintiff. The 3rd Defendant was the 1st Defendant's associate employed by the 1st Plaintiff. 2.3. The 4th Defendant on the other hand is a company in which the 1st Defendant is the majority shareholder. 2.4. By the pleadings filed, the Plaintiffs say that on 29th June 2022, the 1st Plaintiff entered into a contract with Mopani Copper Mines Plc, the 'First Contract', wherein, the Plaintiff was the buyer and Mopani Copper Mines Pk, the seller of copper concentrates. On 6th November 2023, the 1st Plaintiff entered into a contract with the 2nd Plaintiff for the sale and delivery of a total of 32,000 dry R-3 2024/HP/0341 metric tonnes of Mopani copper concentrates, the 'Second Contract'. 2.5. The 1st Defendant was responsible for ensuring that the 1st Plaintiff executed the 1st and 2nd Contracts in accordance with the terms agreed by the 1st Plaintiff. 2.6. The Plaintiffs' plea is that the 1st Defendant without due authorisation, caused an alteration of the signatory record held with the Zambia National Commercial Bank and made himself a sole signatory to the Plaintiff's account in order to access 1st money paid by the 2nd Plaintiff to the 1st Plaintiff in accordance with the 2nd Contract. 2.7. By reason of the changes to the 1st Plaintiff's account, the 1st Defendant received and applied to his own use, an amount in the sum of USD 1,074,352.86, paid by the 2nd Plaintiff and intended to be paid to the 1st Plaintiff's, representing proceeds of sale of a quantity of 512.169 dry metric tonnes of copper concentrates. 2.8. Further, it is the Plaintiffs' case that between December 2022 and March 2023, the 1st Defendant acting through the 2nd and 3rd Defendants and in breach of his duties, fraudulently converted copper concentrates that had been sold by the 1st Plaintiff to the 2nd Plaintiff under the Contracts. 2.9. The Plaintiffs seek to show that due to the interference in the legal possession of the copper concentrates by the 1st Defendant with the other Defendants, the Plaintiffs have suffered loss and damage. R-4 2024/HP/0341 2.10. Consequently, the Plaintiffs commenced this action, seeking the following reliefs against the Defendants: (i) Damages for wrongful conversion; (ii) Alternatively, USD 1,074,352.86 as money had and received by the Defendants; (iii) Special damages as pleaded; (iv) Interest; (v) Costs; (vi) Any other relief which the Court will deem fit. 2.11. The Defendants filed their defence on 17th April, 2024. While admitting to having been involved in the execution of the two contracts in his capacity as the Chief Operations Officer of the 1st Plaintiff, the 1st Defendant denies ever altering the 1st Plaintiff's bank acco_unts for purposes of accessing the monies paid into the 1st Plaintiff's account by the 2nd Plaintiff. 3. PLAINTIFFS' APPLICATION 3.1. On 11th March 2025, the Plaintiffs took out exparte summons, a supporting affidavit, supporting arguments and list of authorities for an order of Mareva injunction, pending the determination of this matter pursuant to Order 27 Rule 1 of the High Court Rules and Order 29 Rule 1 of the Rules of the Supreme Court of England 1965 (RSC). R -5 2024/HP/0341 3.2. The Plaintiffs, based on their action seeking damages for wrongful conversion or, in the alternative, the sum of USD 1,074,352.86 as money had and received by the Defendants, together with special damages, interest, and costs, deposed through an affidavit sworn by Jabir Singh Bhandhair that the 1st Defendant, acting through the 4th Defendant, had requested a tax refund from the Zambia Revenue Authority. 3.3. It is the Plaintiffs' position is that unless the injunction is confirmed, the assets of the 4th Defendant are likely to dissipate and thus rendering the judgment the Plaintiffs are likely to obtain in this action nugatory. 3.4. The Plaintiffs thus seek that I confirm the Mareva injunction to prevent the Defendant from disposing of, or removing money 4th held in the Atlas Mara account (s) belonging to the 4th Defendant where the 1st Defendant is a majority shareholder. 4. DEFENDANTS' OPPOSITION 4.1. The Defendants filed one affidavit in opposition, dated 31st March 2025, which was deposed to by the 1st Defendant. 4.2. The 1st Defendant generally denied any wrong doing by the Defendants regarding the Plaintiffs' allegations for either the conversion or the money allegedly had and received in connection with the sum of USD 1,074,352.86. He further deposed that the 4th Defendant was never involved in the contracts referred to by the Plaintiffs. R-6 2024/HP/0341 4.3. It was agreed that the VAT refund for the Defendant emanated 4th from the 4th Defendant's tax compliance with the Zambia Revenue Authority in which the 1st Defendant is merely a shareholder with others as directors. 4.4. The Defendants emphasised that although the 1st Defendant is a shareholder in the 4th Defendant, the principle of separate legal personality precludes the extension of the injunction to the 4th Defendant for alleged actions of the 1st Defendant that are unrelated to the 4th Defendant. 4.5. Regarding the application to discharge the Mareva injunction, the Defendants by their application filed on 8th April 2025, argue that I should proceed to discharge the injunction on the strength of the Plaintiffs not having made an undertaking in obtaining the Mareva injunction. 5. ANALYSIS AND DECISION 5.1. Regarding the principles on the grant of a Mareva injunction as guided in the case of Mareva Compania Naviera SA v International Bulkcarriers SAf1 [1980] 1 ALL ER 213, the J parties are effectively agreed as can be gleaned from their respective arguments. The principles relating to Mareva injunctions are properly set out in the explanatory note in the RSC, specifically Order 29/L/42, which reads as follows: R-7 2024/HP/0341 "29/L/42 Requirements for Mareva injunction The granting of a Mareva injunction is a matter for the discretion of the fudge hearing the application. The plaintiff has a duty to make full and frank disclosure (see para. 29/ lA/24, above). In the exercise of this discretion, the Court may grant a "domestic" Mareva injunction where the following factors are apparent: (1) the plaintiff has a good arguable case on a substantive claim over which the Court has Jurisdiction; {2} the defendant has assets within the jurisdiction; {3} there is a real risk of dissipation or secretion of assets which would render the plaintiffs relief nugatory. In the case of "worldwide" Mareva injunctions, additional factors become relevant {see para. 29/L/65)." (Emphasis mine) 5.2. Adopting the requirements for a Mareva injunction, the Court of Appeal in the case of Kalymnos Processing Limited and Another v Konkola Copper Mines Plc (In Liquidation12l Application No. 60/2023, had this to say: "Mareva infunctions are ordinarily used to prevent a defendant from disposing of its R-8 2024/HP/0341 assets or taking assets out of furisdiction, once an action is served, so as to avoid enforcement of a iudgment." (Emphasis mine) 5.3. I consider first the requirement that the Plaintiffs as applicants ought to have a good and arguable case on the substantive claim over which the court has jurisdiction. I stress here, that I am simply invited to determine whether the Plaintiffs have shown that they have a "good arguable case", and not to engage in any detailed evaluation of evidence. 5.4. Taking, at face only, the allegations of conversion against the Defendants as pleaded in the statement of claim by the Plaintiffs, I am inclined to the view that the Plaintiffs have a good arguable case in the context of Mareva injunction applications. Here, I profess myself suitably mindful that an evaluation of this point does not require me at all, at this interlocutory stage, to determine the matter on the merits. 5.5. On considering the arguments advanced by the parties, it is fairly clear to me, however, that the parties have largely yielded to the temptation to canvass issues which clearly engage the merits of the matter and which therefore, are best reserved for resolution at trial. This approach is inconsonant with the protocol of the court in dealing with such issues at interlocutory stage. Accordingly, minded as I am to avoid the impropriety of pronouncing myself at this stage and thereby preempting the decision on issues which properly fall for determination on the merits at the trial, I will not indulge the arguments of the parties R-9 2024/HP/0341 beyond the present pronouncement of there being a good argument at face. This position remains the law as seen from the case of Turnkey Properties v Lusaka West Development Company Ltd and Othersf3J, (1990) ZR 1 which is instructive in that respect. 5.6. I therefore find, based on the evidence provided in support of the application and from the statement of claim, that the Plaintiffs have a good arguable case against the Defendants. 5.7. I consider next the second consideration, which requires an evaluation as to whether the Defendants have assets within the jurisdiction of the court. I will say at once that this position is uncontroverted. By the affidavit in opposition to the grant of this injunction, the Defendant acknowledges having assets within 4th Zambia. 5.8. The final consideration is whether there is a real risk of dissipation or secretion of assets which would render the Plaintiffs' reliefs nugatory. The Defendants argue that the 4th Defendant did not at any point deal with any contracts involving the Plaintiffs upon which this action is premised. The 4th Defendant, whilst acknowledging that it is presently working on some Value Added Tax (VAT) refund with the Zambia Revenue Authority, argues that the monies due therefrom would simply form part of the assets or working capital of the 4th Defendant and would not be for the 1st Defendant, in any case. R -10 2024/HP/O341 5.9. It has been contended that the 1st Defendant is merely a shareholder in the 4th Defendant, and by law, the company is a separate legal entity from its members. The 4th Defendant's position is that confirming the Mareva injunction will cripple the 4th Defendant as it will be unable to meet its contractual and statutory obligations. 5.10. The question I should ask myself in light of the fundamental question that the Defendants have repeatedly asked throughout these proceedings, and again arises in this application, is whether I should confirm the Mareva injunction restraining the 4th Defendant wherein the 1st Defendant is the majority shareholder, from dealing with or disposing of its assets. 5.11. In answering the above question, and in accounting for the additional time taken to render this ruling beyond the time indicated to the parties at the hearing, I have traversed the length and breadth of our jurisprudence and my exertions in the regard did not yield much in the way of help. I did, however, by extended recourse to other relevant jurisdictions, come across what is now referred to as the Chabra type of jurisdiction which deals with exactly the question I posed. This type of jurisdiction arose from what appears to be the makings of what may well be the leading case on granting a type of Mareva injunction that could extend to a third party or to assets to which the defendant is beneficially interested. In TSB Private Bank International SA v Chabraf4 J [1992] 2 All ER 245 Mummery J held that: R -11 2024/HP/0341 In brief, in the light of the plaintiff's evidence and the absence of any detailed evidence on the part of the defendants, I am of the view that there is a good arguable case that there are assets, apparently vested in the company, which may be beneficially the property of Mr Chabra and therefore available to satisfy the plaintif.I's claims against him if established at trial. I am also of the view that it is arguable that the company was, in fact, at relevant times the alter ego ofM r. Chabra and that its assets, or at least some of its assets, may be available to meet the plaintiffs claims against him if established. There is support for the claims in the plaintifCs evidence, though they are not yet arl:iculated in the statement or claim. Those claims have not been satisfactorily dealt with in the scant evidence adduced by the defendants. I dee line to strike out the writ as against the company. In my view, the company is a proper parl:y to these proceedings, even though there is no cause of action against it on the guarantee. (Emphasis mine) 5.12. It seems to me that the Chabra type jurisdiction was inspired in large part by the position taken earlier by Lloyd J. in SCF Finance Co Ltd v Masrif5J [1985] 2 All ER 747, regarding the grant of a Mareva injunction and the possibility of extending its application to a third-party. Lloyd J., therein pronounced himself thus: R -12 2024/HP/0341 "(.tJ Where a plaintiff invites the court to include within the scope of a Mareva in;unction assets which appear on their face to belong to a third party, eg a bank account in the name of a third party, the court should not accede to the invitation without good reason for supposing that the assets are in truth the assets of the de,fendant. (iii Where the defendant asserts that the assets belong to a third party, the court is not obliged to accept that assertion without inquiry,. but may do so depending on the circumstances. The same applies where it is the third party who makes the assertion, on an application to intervene. {iii} In deciding whether to accept the assertion of a defendant or a third party, without further inquiry, the court will be guided by what is fust and convenient, not only between the plaintiff and the defendant, but also between the plaintiff, the defendant and the third party. {iv} Where the court decides not to accept the assertion without further inquiry, it may order an issue to be tried between the plaint i ff and the third party in advance of the main action, or it may order that the issue await the outcome of the main action, again depending in each case on what is just and convenient". (Emphasis mine) 5.13. Of even greater significance to the case at hand is the inclusion of a third party in whom the Defendant may have a beneficial R-13 2024/HP/0341 interest as a Defendant to the action. In this regard, Mummery J in TSB Private Bank International SA v Chabraf4J [1992] 2 All ER 245 had this to say: "I also considered when I made the order for the ioinder of the company that it should be ioined as a party if, as I intended, an in/unction was to be made against it, so that it would then have the bene( it of the cross-undertaking in damages which the plaintiff was required to give1 (Emphasis mine) '. 5.14. The Chabra jurisdiction on Mareva injunction has been adopted in several other cases. For instance, in case of Cruz City 1 Mauritius Holdings v Unitech Ltd and Others<6J [2014] EWHC 3704 (Comm) the Court held that: "THE CHABRA JURISDICTION [BJ Although I am not concerned with the merits of the claim for Chabra relief, I summarise briefly, by way of background to the present jurisdiction challenge, the circumstances in which such relief is available. The principles are not disputed. Chabra itself was a case where there was a good arguable case that assets apparently owned by a third party were in .fact beneficially owned by the defendant against whom there was a cause o,f action. If the assets were indeed beneficially owned by that defendant, they would in due course be available to R -14 2024/HP/0341 satisfy any fudgment against htm, lust as trnst property would be available to satisfy a judgment against the beneficiary under a bare trnst. On that basis a .freezing order was made against the legal owner of the assets, even though there was no cause of action against it for any substantive relief, so as to preserve the assets pending any judgment. That left for later determination the question whether the assets held by the third party were in fact beneficially owned by the defendant against whom there was a cause of action". (Emphasis mine) 5.15. From the above cases, it is clear that the court will grant a Mareva injunction extending to the assets of a third party or defendant against whom the Plaintiff may not have a direct cause of action, provided there is evidence to show that the defendant is beneficially interested in or owns the assets of the other defendant or third party. Additionally, the injunction should be granted where it is just and convenient based on the facts of the case. 5.16. In the present case, the Plaintiffs seek relief against the Defendants for conversion or, in the alternative, for money had and received. The evidence on record establishes that the 1st Defendant is the majority shareholder in the 4th Defendant. Unless the injunction is confirmed, any judgment obtained by the Plaintiffs is likely to be rendered nugatory, as the personal assets of the 1st, 2nd, and 3rd Defendants are unlikely to satisfy the judgment sum. It 1s therefore necessary that the Mareva R -15 2024/HP/0341 injunction be extended to the assets of the Defendant, in which 4th the 1st Defendant, on the evidence, is beneficially interested or has an ownership interest. 5.17. While I have found that this is a proper case for me to exercise the Chabra jurisdiction to grant a Mareva injunction that extends to the 4th Defendant's assets, I should address my mind to whether I should proceed to confirming the Mareva injunction in favour of the Plaintiffs, despite their not having made any undertaking as to damages. 5.18. My answer to this question lies in the case of TSB Private Bank International SA v Chabraf4 [1992] 2 All ER 245 wherein J Mummery J highlighted that the dangers of granting a Mareva injunction extending to the assets a third party are alleviated if the third party is made a party to the proceedings. This ensures that the third party may benefit from the Plaintiff's undertaking as to damages in the event that the Plaintiff is ultimately unsuccessful. 5.19. In my ex tempore ruling dated 17th January 2025, I had declined to mis-join or strike out from the proceedings the 4th Defendant. Seeing that the 4th Defendant is a party to the action, I confirm the Mareva injunction I granted to the Plaintiffs restraining the Defendants from disposing of, or dissipating, or removing the money held in an Atlas Mara account under the control of 4th Defendant wherein the 1st Defendant is the main shareholder, provided that the Plaintiffs give an undertaking as to damages. R-16 2024/HP/0341 5.20. For the avoidance of doubt, I hereby confirm the Mareva injunction subject to the Plaintiffs giving an undertaking as to damages within the time set out in paragraph 6.2 of this ruling. 6. CONCLUSION AND ORDERS 6.1. Upon the grounds set out in part 5 of this ruling, I confirm the Mareva injunction that I granted to the Plaintiffs restraining the Defendants from disposing of, or dissipating, or removing the money held in an Atlas Mara account under the control of the 4th Defendant wherein the 1st Defendant is the main or controlling shareholder, provided however that the Plaintiffs do give an undertaking as to damages. 6.2. The Plaintiffs are to file a formal order, including a prov1s10n relating to the undertaking as to damages within 7 days from the date of this ruling failing which the Mareva injunction will stand discharged. 6.3. Costs of the application will be in the cause. Delivered at Lusaka this day of July, 2025. HIGH COURT JUDGE R-17