Malawi wins right to recover K824bn from TotalEnergies: Unpaid fuel refunds

Malawi’s Government and Prima Fuels Limited have been given the green light by the High Court’s Commercial Division in Lilongwe to recover fuel supply refunds owed by TotalEnergies Marketing Limited, covering a six-year period from 10 July 2013 to 11 July 2019, after the court found the company had breached a fuel supply agreement.

The Malawi Government, acting through the Ministry of Finance and Economic Planning and represented by Attorney General Frank Mbeta, is claiming K824 billion – roughly US$180 million – relating to unpaid rebates owed to the state, while Prima Fuels Limited is separately pursuing a claim worth US$300 million.

Delivering judgment, Justice Trouble Kalua ruled that while the case involves a lengthy dispute stretching back over a decade, only unpaid monthly refunds falling within six years before the case was filed remain legally recoverable, with any older claims deemed statute-barred under Malawi’s limitation laws.

‘Every monthly payment from today going backwards for six years would be within the limitation period,’ the judge said. ‘And every monthly payment unpaid going beyond six years backwards would be caught by the statute.’

In a further significant finding, the court ruled that a letter sent by TotalEnergies Marketing Limited on 29 March 2012 amounted to an anticipatory repudiation of the supply agreement – effectively signalling the company’s intention to walk away from its obligations – but crucially, Prima Fuels never accepted that repudiation at the time.

As a result, the judge found the original supply agreement remained legally valid and enforceable throughout the disputed period, undermining any suggestion that TotalEnergies could simply treat the contract as void from that point onward.

TotalEnergies Marketing Limited, named as the first defendant in the case, was represented in court by Mordecai Msisha SC, Patrice Nkhono SC, and Alfred Majamanda, while Prima Fuels Limited’s case was argued by Wapona Kita.

The ruling marks a significant legal victory for both the Malawi Government and Prima Fuels Limited, bringing to a head a long-running commercial dispute that has dragged through the courts for years, though it remains to be seen whether TotalEnergies will seek to challenge the decision.