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Khumalo Told To Honour French Arbitration Award

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  • Khumalo Told To Honour French Arbitration Award

    KHUMALO TOLD TO HONOUR FRENCH ARBITRATION AWARD

    The Sunday Independent (South Africa)
    May 25, 2014

    by LOYISO SIDIMBA

    TOP businessman Mzi Khumalo has been ordered to pay more than |R53
    million to his Lebanese associate over the sale of shares and a mining
    deal that went wrong in Armenia.

    Lebanese businessman Pierre Fattouch won a bid in the South Gauteng
    High Court to have a Parisian arbitration award recognised and enforced
    in South Africa.

    Court papers filed by Fattouch say he and Khumalo reached an agreement
    in March 2009 for Khumalo to pay US$5m in four instalments of US$1.25m.

    Khumalo's bill is likely to top R77m as he has also been ordered to
    pay |9 percent in annual interest from April 2009 until the date of
    final payment.

    He must pay Fattouch's legal costs, according to the ruling, delivered
    by Judge Sherise Weiner on May 6.

    Fattouch approached the high court in South Africa in 2012 after
    Khumalo failed to pay him in accordance with the award. Khumalo had
    between April and September 2009 to pay Fattouch.

    The battle between the two millionaires dates back to May 2006 when
    Fattouch and Khumalo, through Rosario International Investments,
    entered into a written sale of shares agreement. Two years later,
    there was a dispute and the matter was referred to arbitration.

    After winning the French arbitration, Fattouch applied to the South
    Gauteng High Court to have the award made an order of the court.

    Khumalo, one of South Africa's richest businessmen and a former
    Umkhonto we Sizwe operative, then insisted that Fattouch put up
    security for costs with the high court's registrar and the Lebanese
    tycoon complied.

    In court Khumalo claimed he had a pactum de non petendo (agreement not
    to sue) with Fattouch who had undertaken not to proceed with litigation
    until he, Fattouch, had obtained two mining licences in Armenia.

    Khumalo said it did not make sense for him to pay the amount Fattouch
    claimed if Fattouch was unable to obtain the licences.

    Fattouch is president of the Armenia-Lebanon Friendship Association
    and owns Armenia's Karabakh Telecom, which trades as VivaCell,
    through the Fattouch Investment Group.

    VivaCell is one of two mobile operators in Armenia and has been
    operating there since July 2005.

    Khumalo had also undertaken to pay Fattouch in terms of the arbitral
    award, according to court papers.

    Weiner said in her judgment: "There is no mention of any agreement
    that the applicant (Fattouch) would not proceed pending the obtaining
    of the licences in Armenia".

    Khumalo also argued that Fattouch needed Finance Minister Pravin
    Gordhan's permission to enforce foreign arbitration awards in terms
    of the Protection of Businesses Act.

    Weiner said the requirement to seek Gordhan's permission needed to be
    analysed to ascertain whether it was in conflict with the constitution.

    She said she would be able to decide on the facts before her and
    that to adjudicate on the constitutionality of the Protection of
    Businesses Act Gordhan and his justice and international relations
    and co-operation counterparts, Jeff Radebe and Maite Nkoana-Mashabane
    respectively, would have to joined in the matter.

    Fattouch's lawyer Pumzo Mbana could not be reached for comment.

    Last month, The Sunday Independent reported that Khumalo's palatial
    Zimbali mansion escaped its second scheduled auction after he entered
    into yet another settlement agreement with RMB Private Bank.

    Khumalo owes the bank millions |of rands after it won a case against
    him for the payment of more than R16.6m including 10 percent annual
    interest in 2012.

    He had also managed to save the property from being sold off in
    October last year.

    TOP businessman Mzi Khumalo has been ordered to pay over R53 million
    to his Lebanese associate over the sale of shares and a mining deal
    that went wrong in Armenia.

    http://africa.tmcnet.com/news/2014/05/25/7847164.htm




    From: A. Papazian
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