The High Court of Zimbabwe granted an urgent interdict to the Zimbabwe Diamond & Allied Minerals Workers' Union (ZDAMWU), effectively blocking RioZim Limited from disposing of its mining assets while pending corporate rescue proceedings.
The judgment, delivered by Justice Maxwell Dembure, encapsulated the precarious intersection of corporate governance and worker rights.
The case arose after RioZim, a publicly listed company, issued a cautionary statement on July 21, 2025, initiating discussions regarding the potential sale of its mining and non-core assets. This announcement followed ZDAMWU's filing of a court application on April 28, seeking to place the company under supervision due to financial distress.
Dembure noted, "The mere filing of the application for corporate rescue triggers an immediate moratorium on the disposal of a company's assets," emphasising the protective nature of the law intended to shield creditors and employees from the adverse effects of asset stripping.
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He further highlighted that any attempt at asset disposal during this phase could render the corporate rescue application "academic," fundamentally undermining the purpose of such proceedings.
In lambasting RioZim's move, the judge said, "If the applicant's rights are not preserved, the purpose of the ongoing litigation will be defeated, which is against the interests of all affected, including the workers." The court affirmed that allowing the asset disposals would suit a strategy that "frustrates and defeats the pending corporate rescue proceedings," further noting that the company must not be allowed to operate as if it were free from legal encumbrances.
ZDAMWU's counsel, R. Mabwe, characterised the urgency of the application as essential, asserting that "should the court fail to act swiftly, irreparable harm would result," reflecting the union's commitment to safeguarding employee interests linked to the company's asset base.
RioZim's response, led by attorney E. Donzvambeva, contended that the company should be allowed to explore transactions to alleviate financial duress without impediment.
He argued, "The proposed disposals are necessary for the company's survival," pointing out that asset sales could provide much-needed liquidity during corporate rescue discussions.
However, Dembure countered, highlighting the lack of clarity in RioZim's intentions about which specific assets might be sold, noting that such details could impact any ruling on the matter.
The court granted two key orders: prohibiting any asset sales contemplated in RioZim's cautionary statement and mandating the company to bear the costs of the proceedings.
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"The balance of convenience strongly lies in favouring the applicant's request for an interim interdict to prevent potential asset dissipation until a determination is made on the main application."
As a result of this significant ruling, RioZim's shareholders and stakeholders will need to navigate the complexities of corporate restructuring under the court's oversight, while the future of the company's asset management remains uncertain.
The outcome of the wider corporate rescue proceedings now looms large, with potential implications for the mining sector and employee security within the industry at stake.
