Court awards Mulli K1.3 bn compensation

The Commercial Court in Blantyre has ordered government to pay Mulli Brothers Limited US$3, 305, 553 (K1.3 billion) as damages for breach of contract and compensation for loss of business in two separate deals.

Mulli Brothers dragged the Agriculture and Food Security Ministry to the Commercial Court in July 2013 for snubbing the company’s successful bids to supply Urea and NPK 23: 21:0+45 subsidy fertilisers in preference of exorbitant bidders which is contrary to principles of competitive biddings.

According to court affidavit, the company won a contract to supply the ministry the farm inputs which were supposed to be delivered at Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRM) depots in Chirimba, Kanengo and Mzuzu.

Leston Mulli: To be compesated with billions of Kwacha
Leston Mulli: To be compesated with billions of Kwacha

This, according to court documents, did not happen as the ministry during the biding process preferred exorbitant bidders despite disqualification of other suppliers.

Mulli Brothers Limited raised the query with the Agriculture Ministry but it did not respond, according to court documents.

In his ruling Justice John Katsala last month ordered the ministry to pay Mulli Brothers Limited US$3, 305, 553 (K1, 365, 193, 389) at the current lending rate) in damages for loss of profits.

According to Messrs Churchill, Norris and Legal Practitioners, the non- awarding of the bids was based on baseless and slanderous directive by the Ministry of Justice and Constitutional Affairs and Attorney General that were deemed irrelevant to the award of contracts therefore it is unlawful.

Reads part of the originating summons: “The loss occurred on the due date for payments under the respective contracts and the plaintiff has been compelled to commence legal proceedings due to failure by the defendant to address the queries and the claim for interest.”

In another order, the commercial court in Blantyre has directed the Ministry of Health to pay Mulli Brothers Limited the sum of K 14, 108, 353. 97 for a breach of contract for refusing to adjust transportation contract agreement.

According to a statement of claim, the two parties entered an agreement that Mulli Brother Limited do distribute Long Lasting Insecticide Treated Nets valued at K175, 950, 000 in 2011.

The Health Ministry, however, did not honour a contract price adjustment in accordance with the rising cost of fuel and other transport expenses despite nodding to client’s proposal.

“The defendant [Ministry of Health] has unfairly and in breach of the contract wrongfully neglected or refused to adjust in writing and pay the plentiful [Mulli Brothers Limited] the remaining money owing as a result of the adjustment of the cost of fuel and other transport expenses services amounting to K 36, 337, 500 without any just cause resulting in the losses and damages,” reads the claim.

In the order, dated May 7 signed by the court’s registrar, the ministry has been ordered to pay over K14 million in damages, the cost of the application within 30 days.

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