African Rainbow Capital (ARC) says a final judgment by a South African court has removed the legal basis for claims brought against it in a lawsuit in Tanzania involving graphite exploration rights.
In a statement issued on Wednesday, ARC said Pula Group LLC and Pula Graphite Partners Tanzania Limited initiated the litigation in the Tanzanian courts in October 2023 against African Rainbow Minerals (ARM), ARCH Sustainable Resources GPCO Limited (ARCH), ARC and South African businessman Patrice Motsepe.
Pula alleges that ARM breached the terms of a non-disclosure agreement (NDA) governed by South African law and that confidential information was improperly shared with ARC and/or ARCH.
Pula said that allegedly enabled ARCH to acquire a stake in Evolution Energy, which it described as a competitor in Tanzania, resulting in future losses linked to its graphite exploration interests.
The lawsuit seeks contractual damages from ARM, ARCH, ARC and Motsepe on a joint and several basis, even though ARC noted that only ARM was a party to the NDA.
ARC said developments during the legal proceedings revealed that Pula no longer held the exploration right on which its damages claim was based.
The company said that while Pula claimed to hold the exploration licence when the Tanzanian proceedings were filed, it later emerged that the licence renewal was unsuccessful and the exploration right had to be surrendered.
ARC said that in August 2023 a newly incorporated company, Pula Carbon, was granted a fresh exploration right over the same mining tenements. However, the company noted that Pula Carbon was neither a signatory to the NDA nor a party to the Tanzanian litigation.
Seeking legal clarity because the NDA is governed by South African law, ARC approached the South Gauteng High Court in Johannesburg for declaratory relief regarding the contractual claims being pursued in Tanzania.
The company said that during those proceedings, Pula acknowledged that ARC was not bound by the NDA, could not be in breach of its terms and could not be held liable for contractual damages arising from the agreement.
ARC said Pula admitted it had no contractual claim for damages relating to the surrendered exploration licence.
On April 14, 2026, the South Gauteng High Court in Johannesburg ruled in ARC's favour, issuing orders that, according to the company, found Pula had failed to establish a contractual cause of action against ARC in the Tanzanian proceedings.
The court also ruled that Pula had no contractual claim for damages relating to the surrendered exploration licence.
ARC said it has been advised that the effect of the high court ruling was that Pula had no legal basis for any of its claims against any of the defendants named in the Tanzanian case.
The investment company added that although Pula initially sought leave to appeal the South African judgment, it later abandoned the appeal process.
"By not prosecuting the appeal, Pula has accepted that the high court's judgment is final and binding upon it," ARC said in the statement.
The company said it subsequently argued before the Tanzanian court that the South African judgment rendered the issues before the Tanzanian court res judicata — a legal principle preventing matters finally determined by a competent court from being litigated again.
ARC said the Tanzanian proceedings were sub judice, with judgment expected to be delivered at the end of July 2026.
The outcome of the Tanzanian case is expected to determine whether the South African court's findings will influence or dispose of the contractual claims being pursued in Tanzania.
Pula had not commented in the ARC statement on the company's interpretation of the South African judgment or on the pending Tanzanian proceedings.