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Zambian Govt wins case in London Court against US-registered Company 

22 August 2020

By Chris Phiri

The Zambian government has won an international arbitration case against US- registered Lodestar International at the London Court of Arbitration in the United Kingdom.

Home Affairs Minister Mr. Stephen Kampyongo made the revelation at a press briefing today.

He said Lodestar International and Lodestar International Zambia had sued Government in 2018 on alleged breach of contract.

In 2018, Lodestar International LLC and Lodestar International Zambia Limited sued the Zambian Government in the London Court of International Arbitration through their lawyers based in the United States of America, Messrs Cooley LLP on a contract entered into by the parties on 4th September, 2012 for the construction of housing units for the Ministry of Home Affairs, mainly the Zambia Police Service.

Mr Kampyongo said Lodestar claimed that Zambia was in breach of the contract because it failed or never tried at all to reasonably perform the obligations under the contract.

The company further claimed that Zambia corruptly awarded the contract to AVIC international to do the same works it was contracted to do.

“In defence, the Zambian Government stated that there was no breach of contract because the conditions precedent to the fulfilment and enforcement of the contract were not met and therefore there was no compliance with the legal requirements for the enforcement of the contract as required by Zambian law particularly, the Constitution of the Republic of Zambia and the Zambian Public Procurement Act Number 12 of 2008 among other reasons,” Mr Kampyongo told the media.

As a result, the Arbitral Tribunal found that there was insufficient evidence to prove any corruption allegations against any official in the employment of the Zambian Government.

The tribunal went further to state that based on the evidence presented before it by Lodestar, it could not find any iota of evidence in the subsequent awarding of the contract to AVIC International for the construction of the housing units.

“Following this tremendous decision, the Tribunal ordered Lodestar International LLC to pay the Zambian Government $2.7m in respect of Zambia’s legal and other costs and in excess of $197,000 as reimbursable expenses incurred by the Republic of Zambia for the hearing of the matter at the London Court of International Arbitration,” Mr. Kampyongo said.

In this matter, the Zambian Government was represented in the London Court by a team of internal and external lawyers from Messrs DLA Piper of the United Kingdom, the Solicitor General Mr. Abraham Mwansa, SC, Mrs. Kaumbi Ndulo Mundia, Principal State Advocate and Mrs. Diana Majokwe Shamabobo, Principal State Advocate of the Ministry of Justice in Zambia.

Source: Zambia Reports

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