Tanzania court strikes Pula Group’s $195 million claim against Motsepe-linked firms  

A Tanzanian court has struck Pula Group’s $195 million damages claim against companies linked to South African billionaire Patrice Motsepe from the court roll, but stopped short of ruling on whether confidential information was misused to support a competing graphite project. 

The High Court of Tanzania found that Pula had failed to join two companies at the center of its case, Australian-listed Evolution Energy Minerals and its Tanzanian subsidiary, Ngwena Tanzania. Ngwena operates the Chilalo graphite project in Tanzania’s Ruangwa district, near Pula’s own graphite development. 

The ruling means the court did not determine whether confidential information was improperly used, leaving the central dispute between the parties unresolved.

Dispute dates to 2019 

The legal fight dates to 2019, when African Rainbow Minerals signed a 24-month confidentiality agreement with U.S.-based Pula Group while considering an investment in Pula’s Ruangwa graphite project in southern Tanzania. 

Pula says it shared confidential geological, commercial and strategic information with ARM as part of those discussions. Under the agreement, ARM was barred from using the information for a competing purpose or in a way that could harm Pula. 

Pula later discovered that ARCH Sustainable Resources Fund had invested in Evolution Energy Minerals, which was developing the nearby Chilalo project through Ngwena Tanzania. 

Pula alleges that the relationship between ARCH, ARM and Motsepe gave the investment vehicle access to information covered by the confidentiality agreement and that the information was later used in connection with the competing project. 

ARC has denied receiving or using Pula’s information and maintains that it was not a party to the confidentiality agreement. 

Pula had named Motsepe and three companies as respondents: African Rainbow Minerals, African Rainbow Capital and ARCH Sustainable Resources.

Tanzania court keeps jurisdiction 

The Tanzanian ruling was not entirely in Motsepe’s favor. The court held that Tanzania had jurisdiction over the dispute, despite an earlier South African court ruling concerning the confidentiality agreement. 

That South African judgment found that the agreement was between ARM, rather than ARC, and Pula Group. It also found that Pula Graphite, a subsidiary of Pula Group, had no contractual rights under the agreement and could not claim damages arising from the alleged breach. 

The Tanzanian court took a different view, describing the South African judgment as “inconclusive and immaterial” to the Tanzanian proceedings. It did not, however, decide whether the confidentiality agreement had been breached. 

Pula Chairman Ambassador Charles Stith said the decision was significant because the court had upheld what he described as key parts of the company’s case. 

“This is an important judgment because the court has affirmed central elements of the case Pula has advanced from the outset,” Stith said. 

Pula says the court recognized the links between ARM, ARC and ARCH, the investment connections involving Evolution and Ngwena, and the operation of the Chilalo project during the period in question. 

The company is now considering its next move, including an appeal, a review of the ruling or fresh proceedings that would include Evolution and Ngwena as respondents. 

Motsepe-Linked businesses

Pula Group International LLC is a U.S.-based natural resources company with operations focused mainly on sub-Saharan Africa, including mining exploration, real estate and economic development. It has offices in Johannesburg and Dar es Salaam. 

ARM, ARC and ARCH are separate businesses associated with Motsepe. ARM is focused on mining, while ARC invests across a range of sectors and ARCH manages specialized investment funds.