President of the Confederation of African Football and South African billionaire Patrice Motsepe and his associated companies face a $195 million (GH¢3.17 billion) lawsuit in Tanzania, in one of the largest cases to be heard by the country’s commercial court.
The Tanzanian mining firm Pula Group is suing Motsepe and his companies, including African Rainbow Minerals (ARM), African Rainbow Capital, and ARCH Emerging Markets, for allegedly breaching a non-compete agreement. The case is set to resume on Monday.
According to Pula Group Chairman Charles Stith, the lawsuit centers on claims that Motsepe’s companies violated a confidentiality and non-compete agreement when they invested in Australia’s Evolution Energy Minerals, a project neighboring Pula’s own graphite site in Tanzania. Stith explained that the $195 million amount was determined by a third-party valuation estimating Pula’s losses due to this alleged competitive disadvantage.
Motsepe and his companies deny the allegations, stating that there is no merit to Pula’s claims. An ARM spokesperson noted, “ARM was considering investing in minerals it hadn’t previously mined when the Pula graphite project was presented for review.
ARM signed a confidentiality agreement with Pula but ultimately decided not to invest in the project, and this decision was communicated to Pula.” ARM declined further comment, citing the ongoing legal proceedings. Pula claims a two-year non-compete contract was in place and alleges that Motsepe’s companies negotiated and finalized the deal with the Australian company during this period.
Stith, a former U.S. ambassador to Tanzania, argued that such practices perpetuate unfair competition in Tanzania’s mining sector, dominated by international firms from countries like Australia and Canada. He noted, “This case is expected to set a legal precedent in protecting local mining and exploration firms in Tanzania from the dominance of international competitors.”
The lawsuit has seen delays, with Motsepe’s legal team questioning Tanzania’s jurisdiction and claiming improper service of court documents, according to Stith. In some instances, ARM’s legal representatives have failed to appear in court, further slowing proceedings.
The outcome of this case could have significant implications for the rights of local Tanzanian companies in the mining industry, and it may influence future foreign investments and partnerships across the African continent.
