ZAMBIA Trends and Developments Contributed by: Christopher Kapambe, Kasewe Banda, Nakasamba Banda Chanda and Chamwaza Chioneni Phiri, AMW & Company Legal Practitioners
In Zambia, construction disputes are governed almost exclusively by contractual terms. When FIDIC stand - ard forms retain the dispute adjudication board clause, they enable interim decisions that allow projects to advance without interruption. Where the employer’s bargaining strength results in the board clause being deleted, the contractor has no interim remedy short of a full arbitration. Enforce - ment compounds the problem: a board decision that the losing party ignores must be converted into an arbitral award and the award must then be registered with the High Court. Each stage adds delay and cost to a mechanism meant to avoid both. The draft ADR Bill proposes statutory adjudication, creating a right that exists by law rather than by con - tract. That would move Zambia toward the model introduced in the UK by the Housing Grants, Con - struction and Regeneration Act 1996 and its princi - ple that the paying party pays now and argues later. Enforcement is pivotal: reform will succeed only if adjudication decisions are swiftly enforceable, spar - ing successful parties from the need to pursue full arbitration before obtaining meaningful relief. Power and the multiplication of contracts Progress toward the 2031 target depends on coor - dinated electricity-market reform and mining sector expansion, together with increased generation and transmission capacity. The Electricity (Open Access) Regulations of 2024 replaced the single-buyer model under which ZESCO alone purchased independent power; producers may now sell directly to consumers through the networks of ZESCO, Copperbelt Energy Corporation and North-Western Energy Corporation. Open access may place transmission, distribution and supply contracts around one industrial customer; con - sequently, a single curtailment or metering failure can create related claims across separately documented relationships. The Arbitration Act contains no express consolidation or joinder power. LIAC’s Rules do, but only where every contract consistently selects them. Without aligned clauses, parallel proceedings may arise, as occurred in the ZCCM and First Quantum Minerals disputes.
Zambian power purchase agreements and mining- finance arrangements have used United States dol - lar obligations. The Bank of Zambia Currency Direc - tives, 2025 require domestic transactions in ZMW, but exempt electricity production, transmission, distribu - tion and trading, together with financial and mining transactions. Those exemptions reduce the conflict but do not eliminate award-currency questions where a contract or claim falls outside or partly within, the Schedule. Parties should state payment and award currencies and address prevailing exchange-control requirements. What the Trafigura Award tells the market Enforceability explains why parties contracting with Zambian counterparties arbitrate. A foreign judgment depends on reciprocity under the Foreign Judgments (Reciprocal Enforcement) Act; without it, a claimant may need to sue again in Zambia or sue on the judg - ment. An arbitral award instead benefits from the New York Convention, given effect by the Arbitration Act. That difference makes foreign seats commercially workable and explains the prevalence of arbitration clauses in cross-border finance. The Trafigura proceedings show the framework in practice. Trafigura commenced LCIA arbitration against ZCCM Investments Holdings Plc in Febru - ary 2024 under a copper prepayment agreement with Konkola Copper Mines backed by a ZCCM-IH guaran - tee. A partial award in December 2025 held the guar - antee binding. The final award in May 2026 ordered about USD69.3 million in principal and USD19.7 mil - lion in interest, plus arbitration costs and Trafigura’s legal fees. The first lesson from the award concerns guarantees. The tribunal held ZCCM-IH bound by its guarantee regardless of the identity of the ultimate shareholder. For a country seeking to finance its 2031 programme partly through credit support from ZCCM-IH, IDC and ZESCO, the result is on balance constructive: clear and predictable enforcement strengthens counter - party confidence in guarantees issued by state-linked commercial entities, although the effect will always depend on the wording of the instrument and the financial position of the guarantor.
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