HARARE – A US$37 million windfall awarded to over 200 RioZim employees has been thrown into limbo after the High Court ruled that the mining giant is shielded by corporate rescue proceedings.
Justice Catherine Bachi Mzawazi has pulled the case off the roll, saying the law imposes a sweeping freeze on all litigation once a company enters corporate rescue.
“The law is indeed an ass, so they say,” the judge remarked. “The respondent tactfully sought refuge from the law at the detriment of the employees’ rights, thereby throwing their legitimate course of action off course. Arguably, yet another delaying tactic by the respondents which caught the applicants off guard. The law is the law nonetheless. It has to be obeyed unless or until it is repealed or overturned.”
The dispute involves Edmore Kasirori and 219 other workers, who won a labour arbitration award against RioZim valued at more than US$37 million. They had asked the High Court to register the award so it could be enforced.
But a day before the scheduled hearing, RioZim’s lawyers argued the proceedings could not go forward because the Zimbabwe Diamond Allied Workers Union had already applied to place the company under corporate rescue in April.
Mzawazi sided with RioZim, citing Section 126 of the Insolvency Act, which imposes a legal moratorium once such an application is filed.
“All legal proceedings pending, in progress or to be instituted are placed on hold once an application for corporate rescue has been commenced,” she said.
While acknowledging the workers’ anger, she stressed their claims had not been lost but only “temporarily derailed.” Corporate rescue proceedings, she said, must be concluded within three months.
“Corporate rescue is a lifeline thrown to enable a company in financial distress to be rehabilitated in order to make a financial turnaround so as to meet its obligations,” the judge added.
In the end, the court ordered the matter removed from the roll, with each side covering its own legal costs.
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