- Summary
Court case centers on violation of the noncompete clause between Ruangwa mining companies
DAR ES SALAAM; A landmark lawsuit involving two major players in the graphite mining sector, Pula and African Rainbow Capital (ARC), is set to resume in Dar es Salaam on Wednesday, despite a recent ruling by a South African High Court in Johannesburg in favor of ARC.
The case, which has drawn significant attention world-wide, concerns a $195 million dispute centered o the violation of a noncompete clause in a Confidentiality Agreement between two graphite mining projects in Tanzania.
It pits Pula Group and its Tanzanian subsidiary Pula Graphite Partners, in which Tanzanians have a 50 percent stake, against South African mining magnate Patrice Motsepe and his affiliated companies, African Rainbow Minerals (ARM), African Rainbow Capital (ARC), and London-based investment firm ARCH.
Patrice Motsepe, ARM, and ARCH did not appear in Court and are facing a default judgement.
The allegations are straightforward: Motsepe’s ARM signed a non-compete and confidentiality agreement with the Pula Group regarding a graphite project in Tanzania.
ARM received confidential geological data, and subsequently channeled an investment through a sister company into a rival graphite project on adjacent to Pula’s project.
Last week, on Tuesday, the High Court of Tanzania (Commercial Division), presided over by Judge Frank Mirindo, ordered both parties to submit expert witness statements by April 28 of this month to address the jurisdiction issue raised by the South Africa ruling.
This paves the way for the main case to proceed. The Tanzanian court has stated that the matter will be heard “post haste,” with proceedings expected to continue this week.
The expert witness statements will address the issue of whether Tanzania or South Africa has jurisdiction over mining assets in Tanzania due to a ruling in South Africa.
South African Ruling and Appeal
In late 2025, African Rainbow Capital filed an application for the South African courts to intervene. the South African Court delivered an unusually speedy ruling in favor of ARC in April 14th.
ARC succeeded in obtaining an order from the Gauteng High Court in Johannesburg, declaring that Pula Group and its Tanzanian subsidiary are prevented from pursuing their lawsuit against ARC in Tanzania.
Judge Leicester Adams ruled that, to the extent Pula Group can prove a breach of agreement and resulting damages, its contractual remedies lie solely against African Rainbow Minerals (ARM), one of Motsepe’s companies.
The Johannesburg court found that ARC had no contractual obligations under the agreement and could not be accused of breaching it. The court also held that Pula Group had not established a valid contractual claim against ARC.
Senior Counsel Gasper Nyika, representing the South African defendants, presented the April 2026 judgment from a South African court.
This caused another delay in the trial as witnesses prepare statements on jurisdiction.
The suit by Pula was originally filed in Tanzania in 2023. The Defendants have presented numerous applications in the Tanzania Court, which were all heard and ruled upon clearing the way for the trial to held. Senior Counsel Beatus Malima is at the helm of the Plaintiffs Legal Team.
Diplomatic and Legal Commentary
Ambassador Charles R. Stith, a former U.S. envoy to Tanzania, has repeatedly questioned the speed through which ARC’s applications through the South African Courts, starting with the edictal citation, that enabled the South African courts to deal with the case.
Stith cited that the initial hearing took only two minutes. Despite the South African court initiative to insert itself it this ongping case, Stith emphasized, “Justice delayed is not justice denied.”
Ambassador Stith further noted that the case between Pula PLC and African Rainbow Capital could set a precedent in the Tanzanian legal system, across Africa, and for the future of the mining industry on the continent.
“This is a risky strategy because the South African ruling has weaknesses. First, it is already under appeal in South Africa, which makes it legally moot. This fact was not shared with the judge in last week’s hearing,” he noted.
He concluded that the case would be a game-changer for the mining sector in East, Central, and Africa at large, while also setting standards for court jurisdiction and the protection of Tanzania resources.
Detailed Allegations and Data Concerns
Dr. Mary Stith, President of Pula Group , elaborated on the nature of the confidential information allegedly accessed by ARC.
“African Rainbow Minerals and its affiliates had access to confidential information and data, it means the extensive reports generated by our team and independent local and international experts from geologists, geographical survey reports, the quality of minerals underground, the magnitude of the mineral deposits, and other relevant information for mineral extraction and processing.
We say that the competitive landscape was altered because an investment was made in a competitor during the duration of agreement and our business is very competitive.”
Ambassador Stith added that he initially filed the case but later withdrew it, hoping for an amicable resolution. “After I met Patrice Motsepe in Beverly Hills, California, he told me to let’s hear what the lawyers have to say,” he said.
Context and Significance
It has been four years since Pula Graphite Partners and Pula Group filed their $195 million suit.
This mining dispute is unique in that it draws attention to the independence of the judicial system in Africa.
The plaintiffs are pursuing damages in Tanzania, accusing companies linked to Motsepe of using confidential mining data to gain and enjoy advantages in Tanzania’s graphite sector.
The High Court of Tanzania (Commercial Division), under Judge Mirindo, has stated clearly that the case will be heard in Tanzania without further delay, with proceedings set to resume this week.
