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A Tanzanian judge threw out the $195 million claim against Patrice Motsepe last month without deciding whether the contract at the centre of it had been breached.
Judge F.M. Mirindo struck the case off the roll on Aug. 7 because Pula Group had not joined Evolution Energy Minerals and its related companies, which he considered necessary parties. He awarded no damages and made no finding on the confidentiality agreement.
Pula filed a notice of appeal on Aug. 24 against the whole of that decision, and its chairman says the group could also simply refile the case.
The dispute concerns graphite. Pula and its Tanzanian unit sued Motsepe, African Rainbow Minerals, African Rainbow Capital Investments and ARCH Sustainable Resources in 2023, alleging they breached a non-compete clause by investing in the Australian company Evolution Energy Minerals, whose Chilalo project sits next to Pula's own graphite ground in the Ruangwa district of Lindi region.
Charles Stith, the Pula chairman and a former United States ambassador to Tanzania, explained why Evolution was left out of the original suit. Evolution was a party to the transaction, he said, but the investment was made into the company and Evolution never signed a non-compete agreement. Only the investor, meaning the Motsepe-linked companies, could decide whether to make that investment with a non-compete in place.
The ruling was not entirely in Motsepe's favour. Mirindo confirmed that Tanzania has jurisdiction over the case, and found that Motsepe had the capacity to materially influence decisions through his controlling stake in African Rainbow Capital, which is linked to African Rainbow Minerals.
Both companies are being careful about what they say. African Rainbow Capital said it is aware of the notice of appeal but that the notice does not set out the grounds, making it too early to comment further. African Rainbow Minerals said it respects both the court's decision and Pula's appeal and will let the judicial process take its course.
The claim could grow. Stith said the $195 million figure came from a valuation by Bowline Professional Services of what Pula stood to lose from the competitive disadvantage created by the alleged breach of a two-year confidentiality and non-compete agreement. He said the number could rise now that Evolution has issued an investor document valuing the whole company at $340 million.
Motsepe has already won the South African leg of this fight. Judge Leicester Adams cleared African Rainbow Capital in the Gauteng High Court in April, finding that the 2019 non-disclosure agreement was signed between Pula and African Rainbow Minerals rather than with ARC, and that Pula's contractual remedies lay against ARM alone. Pula obtained leave to appeal in May and abandoned it in July, which African Rainbow Capital said meant the judgment had become final and binding.
Stith rejected that reading at the time, calling the withdrawal a disciplined legal and commercial decision rather than a retreat, and saying the court that mattered had yet to rule.
That court has now ruled, and it ruled on procedure.
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