The Court of Appeal has ruled that Konkola Copper Mines (KCM) must treat the Copperbelt Energy Corporation (CEC) as a preferential creditor and pay the company, accordingly, overturning parts of a High Court ruling that had denied CEC’s claim.
The landmark judgment, delivered on October 5, 2025, marks a major legal victory for CEC, which is owed over US$29.6 million by the mining company.
The Court found that the High Court had misdirected itself on key statutory preconditions when sanctioning KCM’s scheme of arrangement, which categorized CEC’s debt as an ordinary trade claim instead of a preferential one.
A three-member bench comprising Justices Justine Chashi, Petronella Ngulube, and Annesie Banda Bobo ruled that the lower court failed to properly scrutinize related-party debts, misclassified creditors, and undermined statutory safeguards meant to ensure fairness in restructuring proceedings.
The judges emphasized that creditor classes must be determined by legal rights rather than claim size or commercial interest, stating that grouping CEC with ordinary unsecured creditors diluted its preferential rights and created an unfair classification.
The Court also criticized the explanatory statement that accompanied KCM’s scheme of arrangement, noting that it failed to disclose how related parties, acting as both shareholders and creditors, could benefit from the arrangement, compromising fairness and transparency.
CEC’s appeal stemmed from a 2019 winding-up petition filed by ZCCM Investment Holdings Plc, which led to the appointment of a provisional liquidator tasked with organizing creditor meetings and proposing the restructuring scheme.
In June 2024, High Court Judge Charles Kafunda sanctioned the scheme, dismissing CEC’s preferential claim a decision now overturned by the appellate court.
The Court ordered that CEC be recognized and paid as a preferential creditor, with costs to be taxed in default of agreement.
By Lovemore Sondashi
