Mulungushi Textiles legal war erupts

The Tanzanian Company operating  Mulungushi Textiles Limited  has been evicted after failing to satisfy Government of its operations, but has now applied for an injunction against the decision by the Zambia China Mulungushi Textiles (Joint Venture) Limited to cancel their lease agreement and eviction notice from their business premises in Kabwe.

This was after the Tanzanian company currently running Mulungushi textiles declared a dispute against any action to cancel the lease agreement and subsequently evict it from the Zambia China Mulungushi Textiles (Joint Venture) Limited premises on plot 2419 and 2420 in Kabwe.

The lease agreement was entered into for the purpose of operating, maintaining and management of the textile plant for the period of 12 years with an option to renew for a further 18 years at a fixed lease fee of K220,000.00 per month.

According to an affidavit for an order of interim injunction pending appointment of arbitral tribunal on the matter, MeTL country manager Cosmas Mtesigwa said the two parties failed to reach an agreement on questions arising from the Lease Agreement despite making the necessary payments on the property.

“Pursuant thereto the applicants through their advocates did on 15 November, 2015 give Notice to the Respondent for a declaration of a dispute and call for formal negotiations prior to Arbitration as provided for in the Lease Agreement.

“This was prompted by failure of the parties to agree on the effective date of the Lease Agreement for purpose of paying Lease fees as the leased premises were never formally handed over to the applicant until 2nd November 2015 when an agreement was reached that the stores department whilst listed as leased would remain under the control of the respondent who would grant controlled access to the respondents by placing personnel to attend to access  requisitions and record draw by down of spares removed,” he said.

Mr Mtesigwa challenged the decision to evict his company from their business premises despite payment of K1,321,000.00 towards the lease fees by November 2, 2015.

He claimed that despite all the efforts made in meeting agreed conditions, Zambia China Mulungushi JV has issued eviction notices and issued a deadline of November 11, 2015 to the company manager to vacate the said premises in Kabwe.

That if not restrained from evicting the applicants from the premises, the intended arbitral proceedings which the parties freely agreed to, will be a mere academic exercise and therefore it is imperative that the status quo is maintained until the full determination of the dispute between the parties,” he said.