Huawei, ZTE dragged to court for failing to pay Malawian  company

Malawian company, Bengol-Tele Construction Ltd has dragged to court two foreign companies, Huawei Technology Investment and ZTE Corporation for failing to pay about 1.5 million US dollars (about K600 million) after completion of work the two companies subcontracted the latter.

The two companies subcontracted Bengol to perform some optical fibre cable installation engineering works in various parts of Malawi and work was completed two years ago.

High Court in Blantyre has since given the two companies 21 days from July 8 2014 to satisfy the claim or challenge the summons which was served by lawyer Victor Gondwe of John Tennyson & Associates.

From ZTE Corporation, Bengol is claiming payment of interest on 484, 453.33 US dollars at 1 percent above the commercial bank lending rate from 22nd December 2013 to 14th March 2014; payment of interest on 395 887.52 US dollars at one percent above the commercial bank lending rate from 14th March to 22nd April 2014; payment of 153, 636.25 US dollars being the remaining balance; interest on 153 636.25 US dollars at one percent above the commercial bank lending rate from 22nd April 2014 till payment and 15 363.62 US dollars being indemnity to the plaintiff for legal costs already incurred by the plaintiff.

From Huawei, Bengol makes the following claims: payment of interest n 62 351.39 US dollars at one percent above the commercial bank lending rate from January 2012 to November 2013; payment of 58 589.75 US dollars being the remaining balance; interest on 58 636.25 US dollars at one percent above the commercial bank lending rate from March 2013 till payment and 10 000 US dollars being indemnity to the plaintiff for legal costs already incurred by the plaintiff.

In the Huawei-Bengol contract, the agreement was that the latter would perform some optical fibre cable installation engineering works in various parts of Malawi at a total cost of 585 997.50 US dollars for the copper installation and 623 513.90 US dollars for the fibre installation.

Over a year now, Huawei failed or neglected to pay 58 589.75 US dollars and 62 351.39 US dollars was only paid in November 2013 after a year and 11 months from the date it was due.

Court documents show that Bengol performed the contract without any dispute arising save for the non payment on the part of Huawei.

With ZTE contract, the project was completed and handed over to Huawei on 22nd November 2013 and the balance of 484 453.33 US dollars became payable within 30 days from November 22 2013.

“The defendant in breach of the agreement never paid the sum within the 30 day period but instead made a payment of 88 565.81 US dollars on 14th March 2014 and another payment 242 686.51 US dollars on the 22nd April 2014 leaving a balance 153 636.25 US dollars which the defendant has refused or neglected to pay despite several reminders from the plaintiff,” reads court document.

Bengol is a Malawian company which has performed several cable installation projects from Malawi Telecommunications Limited and Airtel. The company has a labour force of over 2 000 Malawian workers.

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