Pula withdraws ARM suit

Pula Group’s attorney has at the Tuesday hearing held at the High Court, Commercial Division withdrawn Pula’s 195 million US dollars suit against African Rainbow Minerals and its six affiliates but intends to refile the suit within ten days.

The decision to withdraw and refile was made because of a technical issue that could have affected the case.

The issue in question was whether having a resolution from Pula directors authorising the suit needed to be attached as a part of the original complaint.

When the case was originally filed on October 28, 2022, there were various arguments from the Tanzanian Court as to whether it was necessary to include a copy of the resolution of the board of directors authorising the corporation to commence litigation as part of filing of the complaint.

However, after the Pula pleadings were filed in October, the Tanzanian Court issued a decision in Sharaf Shipping Agency (T) Limited v. Barclays Bank Tanzania Limited on 24 February 2022, which emphasized the Court’s view that “(a) suit is incompetent for failure to plead and annex board (the) resolution sanctioning the institution of the suit.”

For this reason, Pula Graphite Partners and the Pula Group, on advice of Counsel, withdrew their current complaints against African Rainbow Minerals et. al. and will refile their law suit with the board resolution, which is consistent with the Sharaf Shipping Agency (T) Limited v. Barclays Bank Tanzania decision.

This decision is intended to ensure that minority shareholders of a board are not overlooked in decisions to bring legal action.

Pula is a 50-50 joint venture, with Tanzanian shareholders having equal representation.

Pula’s board met  before the suit was originally filed and Pula’s directors were on board with the legal action against ARM and its affiliates.

Despite this Pula’s attorneys thought the best strategy, in light of the court’s February ruling, was to withdrew the original suit and refile it.

Pula President Mary Stith said, “Withdrawing and refiling is based on a technicality.  We are comfortable with the course of action recommended by our lawyers.

We do intend to refile our suit because we believe our case is strong and we believe our taking this action will ensure that Tanzanian companies will have a fair chance to defend their interests against foreign competitors.

Our filing the suit against ARM should not be interpreted as an attempt to discourage foreign investment.

Our action was taken because we don’t think it’s fair for foreign companies to step on, step over, or step around Tanzanian companies if they want to do business in Tanzania.

Foreign companies that want to do business here must honor the contracts and agreements they sign with local companies.

It is the only way to ensure that Tanzanian companies will be able to help develop Tanzania and benefit from the tremendous resources the country has.”

The date for the next stage in the battle will be set at some point after the suit is refiled.