Malawi govt pays Mulli K1 billion compensation

Malawi tax payers will finance the payment of K1, 020,000,000 to Mulli Brothers Limited as out of court settlement with government as damages for breach of contract and compensation for loss of business in two separate deals during the previous administration.

Nyasa Times understands that Mulli stormed Accountant General’s office on Friday (19 September, 2014) where he wanted to collect the K1 billion cheques but he was turned back after being told that the cheque dispatcher had already knocked off.

Accountant General, Thomas Makiwa confirmed to Nyasa Times about the payment to Mulli, saying his office would scrutinise the documents regarding the pay.

“Let me say that we have not paid Mulli yet, what we can say as professionals is that we examine each and every vouchers coming for payment with the relevant authorities so the same applies to what you have asked (of Mulli Brothers),”said Makiwa.

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.

The company argued that it 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.

This did not happen as the ministry during the biding process preferred exorbitant bidders despite disqualification of other suppliers.

High Court Judge John Katsala 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.

In another order, the commercial court in Blantyre 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 by the court’s registrar, the ministry has been ordered to pay over K14 million in damages and the cost of the application.

The previous regime challenged the claims by Mulli and the Supreme Court of Appeal granted a stay order stopping the payment of K2 billion compensation to Leston Mulli’s Sunrise Pharmaceuticals.

Justice of Appeal Edward Twea granted a stay order in favour of the government on the judgment by the late Justice Joseph Manyungwa on Sunrise Pharmaceuticals and Chombo Foods Limited vs the Attorney General.

The High Court through late judge Manyungwa ruled that government must pay Mulli’s as compensation for damages the company suffered during the anti-government demonstrations on 20 July, 2011.

But the current government has resorted for an out of court settlement and pay Mulli K1 billion.