King's Daughter Mining Company UK Limited v Redwing Mining Company (Private) Limited (Under corporate rescue) and Others

King's Daughter Mining Company UK Limited ("KD"), a UK-registered company, was the sole shareholder of Redwing Mining Company (Private) Limited ("Redwing"), a Zimbabwean mining company. Redwing was placed under corporate rescue by court order in HC 99-19 at the instance of its workforce represented by the Associated Mineworkers Union of Zimbabwe. Cecil Hondo Madondo was appointed as the corporate rescue practitioner. Redwing was saddled with debts and operating below capacity, with workers unpaid for years. Despite Redwing's opposition, the corporate rescue order was granted by Muzenda J on 23 July 2020. Redwing appealed, but leave to execute pending appeal was granted on 3 September 2020. KD subsequently brought two consolidated applications: HC 7218-20 seeking to set aside the corporate rescue order or alternatively remove Madondo as practitioner, and HC 6478-20 being Madondo's application for a nine-month extension to publish the corporate rescue plan. By the time of hearing in September 2021, Madondo had been suspended by the Master following fraud complaints from a joint venture partner and was facing criminal charges.

• Whether the corporate rescue order should be set aside on the basis that Redwing was no longer financially distressed
• Whether Madondo should be removed as corporate rescue practitioner for incompetence, failure to prepare a proper corporate rescue plan, and conflicts of interest
• Whether the corporate rescue practitioner was entitled to an extension of time to publish the corporate rescue plan beyond the statutory 45 business days prescribed by section 142(5) of the Insolvency Act
• The proper procedure and grounds for removal of a corporate rescue practitioner under section 132 of the Insolvency Act
• Whether entering into long-term joint venture agreements without an approved corporate rescue plan and without consulting key stakeholders constituted improper conduct

i) The application to set aside the corporate rescue order in HC 99-19 was dismissed. ii) The fifth respondent (Madondo) was removed as corporate rescue practitioner for the first respondent (Redwing). iii) The application for an extension of time to publish the corporate rescue plan (HC 6478-20) was dismissed. iv) No order as to costs.

A corporate rescue practitioner must prepare and publish a corporate rescue plan within 45 business days of appointment as required by sections 142 and 143 of the Insolvency Act. In preparing the corporate rescue plan, the practitioner must consult all key stakeholders including creditors and major shareholders. Operating without an approved corporate rescue plan and entering into long-term agreements with far-reaching consequences without consulting key stakeholders constitutes grounds for removal under section 132 of the Insolvency Act. The proper remedy for removal of a corporate rescue practitioner based on post-appointment conduct is removal under section 132, not setting aside the original appointment order. An application to set aside a corporate rescue order requires demonstrable proof that the company is no longer in financial distress and that the circumstances warranting corporate rescue have changed significantly.

The court observed that although the couching of the draft order seeking "setting aside" of Madondo's appointment was technically incorrect (as it suggested something was wrong with the original order), the substantive grounds pleaded and argued were valid grounds for removal under section 132. The court noted that the proper relief for post-appointment misconduct is removal based on incompetence, failure to perform duties, or conflict of interest, not rescission of the original appointment order. The court also commented that unrelenting litigation had consumed significant time and energy, which partially explained (though did not excuse) the failure to meet the statutory corporate rescue timeline. The court noted that by the time of hearing, the matter had effectively been overtaken by events on the ground with a new practitioner in place implementing a new plan, making the application somewhat academic, though legal determination was still warranted.

This case provides important guidance on the operation of corporate rescue proceedings under the Insolvency Act [Chapter 6:07] in Zimbabwe. It clarifies the duties and obligations of corporate rescue practitioners, particularly the mandatory requirement to prepare and publish a corporate rescue plan within 45 business days of appointment in consultation with key stakeholders. The case demonstrates the grounds for removal of a corporate rescue practitioner under section 132 of the Act, including incompetence, failure to perform duties properly, and conflict of interest. It also illustrates the distinction between setting aside an order (rescission) and removing a practitioner for subsequent conduct. The judgment emphasizes that corporate rescue is a short-duration process (three months under section 125(3)) and that practitioners must operate transparently with proper consultation of shareholders and creditors. The case shows judicial willingness to intervene and remove practitioners who breach their duties, even where technical aspects of the relief sought may be incorrectly formulated.