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Better Brands gets huge relief

THE High Court on Wednesday struck off from the urgent roll an application by Probadek Investments seeking an order to sue Redwing Mining for allegedly breaching a mining contract.


Justice Tawanda Chitapi said the case against Redwing was not urgent and should be on the common court roll.

Probadek Investments approached the court alleging that it signed a contract to have exclusive mining rights at Redwing, a gold mine in Manicaland which had been under corporate rescue since 2018, in November last year.

The company said it later learnt that two other firms, Better Brands and Prime Royal, had also been granted mining rights at Redwing in violation of the agreement it entered with the mine’s corporate rescue practitioner Cecil Madondo.

Better Brands, Probadek Investments alleged, was already on the ground mining.

Chitapi judged the case was not urgent because Probadek knew about Better Brands and Prime Royal deals in December 2020, but did not approach the court until February 12 this year.

“The need to act in relation to 2nd (Better Brands) and 3rd (Prime Royal) respondents would have to have been 2 December 2020 when the applicant became aware that the 1st respondent (Redwing) had concluded tribute agreements with the 2nd and 3rd respondents.

“There is no reasonable explanation offered as to why the applicant did not sue the respondents immediately after it discovered the existence of the agreement, copies of which were obtained from the offices of the corporate rescue practitioner,” Chitapi ruled.

Probadek director Patricia Mutombgwera said it had taken so long for Probadek to take action as they were waiting for a co-director to return from abroad to decide on course of action to take.

But Justice Chitapi dismissed her reason for the delay, citing that there had been no need to wait for the physical appearance of the co-director as there were other alternatives.

“The applicant’s explanation that it could not file an application in the absence of a board resolution is unreasonable. The meeting could have been virtually held or even discussions held over the phone. And at best the issue could have been discussed immediately upon the arrival of the co-director,” the judge ruled.

“The applicant averred that the co-director had to be quarantined upon his return and that the meeting could not be held before the co-directors quarantine period. Again this explanation is not reasonable. The quarantine status of the co-director would not have been a bar to holding a telephone or virtual meeting.”

Justice Chitapi struck the matter off the urgent roll noting that Probadek had failed to act urgently when the matter arose and that it could not be left to the court to view the matter as urgent.

“The fact of this case clearly shows that there was no such hurry or urgency of action taken by the applicant. If the applicant did not jump when the need arose, it cannot call upon the court to jump for it.”

Several official documents gleaned by the Daily News on Sunday show that Madondo wrote to Probadek seeking to cancel the mining agreement on the basis that the company had failed to honour contractual obligations, among them paying creditors and workers.

But Probadek resisted the move arguing it had sunk close to US$2 million after paying creditors and workers up to November last year. It said it had also bought equipment for US$1,6 million to dewater the mine.

Madondo and Better Brands then inked a multi-million dollar seven-year non-standard tribute mining agreement to revive Redwing in December last year

The deal was approved by the Mining Affairs Board, which falls under the Mines and Mining Development ministry, on January 28 this year.

Documents show that Better Brands are now the sole holders of mining rights for all claims under mining lease 34 owned by Redwing Mining Company. Mining should commence on or before March 1 this year.

Redwing was placed under judicial management in 2018 after experiencing acute viability challenges due to critical shortages of foreign currency and Madondo was tasked to find ways to resuscitate the mine.

Madondo identified Better Brands, one the country’s major buyers of gold on behalf of Fidelity Printers and Refiners, to mine all Redwing claims.

“Please be advised that the Mining Affairs Board at its 2021 first extraordinary meeting held on 28 January 2021 deliberated on and considered the above application for a non-standard tribute agreement between Redwing Mining Company (Pvt) Ltd and Better Brands Mining (Pvt) Ltd.

“After deliberation and consideration of the application, the board resolved that the application be and is hereby approved as follows: i) Tenure of tribute — seven years with effect from 28 January 2021 (being the approval date) to 27 January 2028 and (ii) Royalty payable -20 percent,” reads a letter dated January 29 2021 from the Mining Affairs Board.

Under the terms of agreement, Better Brands would invest US$3 million during the tenure of the deal and has since paid US$90 000 in non-refundable transaction fees.

The two parties agreed that Better Brands should pay Redwing monthly royalty of 20 percent of the total proceeds of the gold mine.

The granting of Better Brands exclusive rights to mine at Redwing has triggered a legal fight that recently resulted in Madondo’s arrest on allegation of fraud involving US$260 000 after  Probadek Investments claimed they were duped.

Madondo was granted

$100 000 bail last week by the High Court after spending over two weeks in remand prison.

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