[2008-08-01]  AF Diamonds/De Beers case defers
Acting Judge Gabriel Rwelengera has dismissed an urgent application for an interdict lodged by BSE-listed African Diamonds to prevent De Beers applying for a retention licence over Boteti Exploration (AK 6), saying the matter is not "desperately urgent".




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The matter will now be heard on a non-urgent basis on a date to be agreed on by the parties in September.

African Diamonds filed the urgent application on July 24, 2008 with the High Court in Lobatse to prevent the lodging of the retention licence. The parties argued the matter to determine if African Diamonds had sufficient grounds to approach the court on an urgent basis.

Delivering his judgement on Tuesday, Rwelengera said while there was a degree of urgency, the matter was not desperately urgent within the meaning of the court's rules for it to be approached on an urgent basis.In a statement yesterday, De Beers celebrated the dismissal of African Diamonds' application, saying it was "pleased with the court ruling."

In an interview with Business Today after the dismissal of the case on Tuesday, African Diamonds' leading lawyer Advocate Bruce Barman (SC) said the ruling affected only the urgency of the matter and not the merits of the case. Contacted by phone in South Africa yesterday, another lawyer on African Diamonds' team, Kevin Pietersen, said the De Beers statement was "wrong".

"The statement by De Beers with regard to the ruling by Acting Judge Rwelengera is incorrect as the ruling was only with regard to the urgency of the matter," Pietersen said. "There was no finding relating to the contractual relationship between the parties."

The De Beers statement also said Judge Rwelengera had found that Boteti was bound by the terms of its Diamond Marketing Agreement, which could not be changed without De Beers' consent and that the judge had also found that De Beers' arguments were "convincing". "De Beers is pleased with the court ruling. As previously stated, developing a mine while knowing that it is likely there will not be sufficient power available would result in an unsustainable and non-viable project," the De Beers statement said.

Continuing with the project would impact negatively on Boteti shareholders, employees and other stakeholders. "To secure the project by means of a retention licence is the right way to maximize the benefits of AK6 for the Boteti shareholders, other stakeholders and the citizens of Botswana," it continued.

De Beers was enthusiastic about AK6 and remained fully committed to seeing it come into production.But Pietersen, who is a director at Leppan Beech Attorneys in Johannesburg, has countered De Beers' statement, saying the diamond giant "misconstrued the (court) finding and this will be evident on release of the written ruling".

De Beers used its majority stake in the Boteti (De Beers 71 percent; African Diamonds 28 percent; Wati 1 percent) joint-venture company developing AK6 to pass a resolution to apply for a retention licence.

Pieterson said African Diamonds considers this to be totally unnecessary, costly and time wasting. He said African Diamonds and its legal team would meet on Friday to decide on the next step. Government had given the two parties until August 12 to sort out their dispute, but Piterson said the management of African Diamonds had written to government seeking extension of the deadline.

African Diamonds Chairman John Teeling said after the ruling that the AK6 mine should be developed immediately, in line with the terms offered by the Government of Botswana. He said African Diamonds and local Botswana interests were ready to proceed and that delays would benefit no one."We remain hopeful of a speedy and successful resolution to the dispute over AK6, but we have moved to protect our interests," Teeling said.

He disclosed that the injunction sought on Tuesday was part of a suit of legal proceedings instituted by African Diamonds against De Beers."A successful outcome would, I believe, have expedited a resolution," he said, "but we now move to have the full issue heard in the High Court. We are seeking, inter alia, the sale of De Beers's shares in the Boteti joint venture to African Diamonds."

Sources say the dispute between the two companies started after the Botswana government demanded that diamonds from the proposed AK6 mine be auctioned in Gaborone, as part of conditions for the granting of a mining licence.

African Diamonds was willing to accept the conditions; De Beers was not.As a result, African Diamonds declared a dispute with De Beers in terms of the shareholders' agreement and offered to buy out De Beers' majority stake in the joint-venture project.The dispute process in the shareholders agreement included arbitration being held in Botswana.
Source: © MMEGI 2002 - 2008