Local firm wins K5bn case in Hong Kong

Malawi Leaf Company Limited, a wholly owned subsidiary of AHL Group in the business of buying and exporting tobacco, has won a case in the Hong Kong Administrative Court against Star Tobacco.

The firm’s legal services manager Martha Ngoma yesterday said the case involved unsettled invoices amounting to $13 million (about K10 billion) worth of leaf exported between 2013 and 2015.

Tobacco sales in progress at the floors

In a ruling under case number HCA 2530/2015, Master Ho, registrar of the Hong Kong High Court, awarded Malawi Leaf the sum of $6.1 million (K4.4 billion) through a summary judgement and ordered Star Tobacco to pay part of the costs incurred by Malawi Leaf in pursuing the case.

Malawi Leaf’s Hong Kong-based lawyers, Messrs DLA Piper and the company’s internal legal team commenced summary proceedings against Star Tobacco for claims that were being admitted by the Hong Kong registered company as being due and payable to Malawi Leaf.

Summary judgement proceedings are a quicker way in which a court disposes of a claim where parties are not disputing all or part of a claim.

Tobacco still dominates Malawi’s exports

Despite the admissions made, Star Tobacco unsuccessfully defended the summary judgment application.

In his ruling, Master Ho held that Star Tobacco did not provide any evidence to justify why summary judgement could not be granted in Malawi Leaf’s favour.

Meanwhile, Malawi Leaf continues to pursue its claim for the remaining amount of $6.9 million (K5 billion) at a full trial and the court in Hong Kong has since set March 28 2018 to look at the case.

Ngoma has since stressed that Malawi Leaf will continue taking legal action against all overdue and defaulting debtors, both local and international.

The establishment of Malawi Leaf in 2006 brought in competition on the tobacco market at a time tobacco companies were merging or being acquired, reducing the number of buyers on the floors.

In the midst of the fuel crisis in 2011 that crippled the country’s economy, Malawi Leaf responded positively to the Malawi Government’s request to support fuel importation through a currency swap arrangement that saw the tobacco processing firm directing its foreign currency tobacco export earnings towards settlement of fuel bills through the then PTA Bank also known as the Eastern and Southern African Trade and Development Bank in the Common Market for Eastern and Southern Region.

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