Online Reporter
Martin Kadzere
The High Court has dismissed an application by a labour body to place RioZim Limited under corporate rescue, ruling the union leading the legal action lacked the legal standing.
In a judgment delivered by Justice Gibson Mandaza on Tuesday this week, the court found that the Zimbabwe Diamond and Allied Minerals Workers union (ZDAMWU) failed to meet the specific criteria of an “affected person” as defined by the Insolvency Act.
The law defines an “affected person” as someone who has a direct legal or financial stake in the company.
Only these specific people or groups have the right to get involved in a company’s corporate rescue or insolvency process.
The application was brought by ZDAMWU alongside two individuals, Precious Mwanza and Owen Kapeta, who argued that RioZim was in dire financial distress.
The applicants claimed that the company’s liabilities exceeded its assets and that the “tragic death of the majority shareholder” had left the Zimbabwe Stock Exchange-listed miner without sufficient capital injection or shareholder support.
They argued that corporate rescue was necessary to preserve jobs and safeguard the company’s assets, including gold mines Renco and Cam and Motor and Murowa Diamond Mine.
RioZim opposed the application, raising several objections.
The company argued that ZDAMWU was a general industry union and not a registered trade union specifically representing RioZim employees as required by law.
RioZim further contended that the applicants had failed to properly notify all “affected persons,” such as creditors and shareholders, which is a mandatory procedural step under the Insolvency Act.
Justice Mandaza centered his decision on the issue of locus standi (legal standing).
He noted that while the Insolvency Act allows trade unions to initiate rescue proceedings, it specifies that the union must represent employees of the specific company in question.
The judge cited a Supreme Court precedent involving Metallon Gold, which established that being a general union for the mining industry is not enough to satisfy the statutory requirements for a specific corporate rescue case.
Justice Mandaza described the first applicant as a “busybody” in the legal sense, noting that it had failed to prove a direct and substantial interest as contemplated by the Act.
“The Insolvency Act does not provide for a registered trade union in the industry, but specifically provides for one representing employees of the company,” Justice Mandaza ruled.
“I hold that the first applicant lacks locus standi to pursue these proceedings. The first applicant is just a ‘busybody’ in the strictest sense of the word. It has no direct and substantial interest in the matter.
“It does not fit into the definition of an affected person as contemplated by the Insolvency Act.
“The application is an abuse of the court process.”
