Riozim Limited v Zimbabwe Diamond & Allied Minerals Workers' Union and Others

Riozim Limited (applicant/first respondent in original proceedings) sought leave to appeal against judgment HH 467/25, which granted a provisional interdict restraining it from disposing of its mining and non-core assets. The Zimbabwe Diamond & Allied Minerals Workers' Union (first respondent/applicant in original proceedings) had filed an urgent chamber application for an interim interdict after Riozim issued a cautionary statement on 21 July 2025 indicating it was negotiating transactions involving the disposal of mining and non-core assets to address liquidity challenges. This urgent application followed a pending court application filed on 28 April 2025 seeking to place Riozim under corporate rescue supervision in terms of section 124(1) of the Insolvency Act. On 5 August 2025, the court granted a provisional order interdicting Riozim from proceeding with the contemplated transactions pending confirmation or discharge of the order. Riozim filed an application for leave to appeal on 21 August 2025, raising seven grounds of appeal challenging various aspects of the court's interlocutory judgment.

• Whether leave to appeal should be granted against an interlocutory judgment granting a provisional interdict
• Whether the applicant demonstrated reasonable prospects of success on appeal
• Whether the trade union had locus standi to bring the urgent chamber application
• Whether section 127(1) of the Insolvency Act applies immediately upon filing an application for corporate rescue or only upon granting of the order
• Whether a company's board can dispose of assets during the pendency of a corporate rescue application
• Whether new grounds of appeal not pleaded in the draft notice of appeal can be raised before the court hearing the application for leave to appeal
• Whether non-compliance with procedural requirements (dies induciae, consultation with members, service by standard notice) rendered the urgent application defective

The application for leave to appeal was dismissed with costs. The court refused to grant leave to appeal against judgment HH 467/25, meaning the provisional interdict restraining Riozim from disposing of its assets remained in effect pending the return date for confirmation or discharge of the order.

The binding legal principles established are: (1) Corporate rescue proceedings commence immediately upon the filing of an application under section 124(1) of the Insolvency Act, not upon the granting of an order (per Metallon Gold Zimbabwe v Shatirwa Investments SC 107/21). (2) Section 127(1) of the Insolvency Act applies immediately upon commencement of corporate rescue proceedings (i.e., upon filing of the application), restricting the company's ability to dispose of assets to only those circumstances prescribed in the section. (3) The purpose of sections 126(1) and 127(1) is to protect company assets during corporate rescue proceedings - section 126(1) provides a moratorium protecting the company from creditors, while section 127(1) protects the company's property from its own managers. (4) In applications for leave to appeal, an applicant must demonstrate reasonable prospects of success, meaning an arguable prima facie case with a rational basis, not merely a remote possibility of success. (5) Proposed grounds of appeal must be stated in the application for leave to appeal as required by the proviso to Rule 94(2) of the High Court Rules; new grounds not so stated cannot be argued without leave to amend. (6) Appellants are confined to grounds stated in their notice of appeal and cannot raise new grounds without leave of the Supreme Court under Rule 51(2) of the Supreme Court Rules, even if the new ground raises a point of law. (7) Decisions of the Supreme Court on non-constitutional matters are final and binding on lower courts under the principle of stare decisis.

The court made several non-binding observations: (1) While acknowledging that directors may retain certain "residual powers" under common law principles developed in insolvency, winding up, and judicial management contexts (citing Venbar (Pvt) Ltd v Vendaland Development and O'Connell, Manthe & Partners Inc v Vryheid Minerale), such residual powers do not override the clear statutory restrictions imposed by section 127(1) during corporate rescue proceedings. (2) The court noted that section 130(2) of the Insolvency Act (deeming the board dissolved) is triggered only when a court makes an order placing the company under corporate rescue and appointing a corporate rescue practitioner, not upon mere filing of the application. This finding was intended to preserve the company's constitutional right to be heard under section 69 read with section 86(3)(e) of the Constitution during corporate rescue proceedings. (3) The court observed that even if an applicant has other remedies available (such as opposing confirmation of a provisional order or being heard in the main application), this is not a valid ground to refuse leave to appeal, as the sole test is prospects of success. However, availability of other remedies may be relevant to the issue of costs. (4) The court distinguished Form No. 23 applications under Rule 60(1) from the application in Reverend Clement Nyathi v The Trustees of the Apostolic Faith Mission, noting that Form No. 23 does not prescribe a mandatory dies induciae and leaves the notice period blank for appropriate modification in urgent matters. (5) The court commented that pursuit of technical procedural points without merit (such as the dies induciae argument) is "simply not about justice at all."

This case reinforces the binding authority of the Supreme Court's decision in Metallon Gold Zimbabwe v Shatirwa Investments regarding the commencement and immediate legal effects of corporate rescue proceedings under the Insolvency Act. It confirms that section 127(1) restrictions on asset disposals apply immediately upon filing of a corporate rescue application, not only after an order is granted appointing a corporate rescue practitioner. The judgment emphasizes the protective purpose of corporate rescue legislation - to preserve company assets so that corporate rescue practitioners do not "inherit shells." The case also clarifies important procedural principles for leave to appeal applications: (1) proposed grounds of appeal must be stated in the application as required by Rule 94(2); (2) new grounds cannot be raised orally without seeking amendment of the draft notice of appeal; (3) appellants (unlike respondents) are not at large to raise new grounds on appeal without leave of the Supreme Court under Rule 51(2); and (4) leave to appeal requires demonstration of reasonable prospects of success, not mere possibilities. The decision serves as a gatekeeper function preventing frivolous appeals from interlocutory orders and reinforces the principle of stare decisis - that lower courts are bound by Supreme Court decisions on non-constitutional matters.