AG battles K5.8bn MDF deal claim
The Attorney General is fighting a $7.1 million (about K5.8 billion) bill which Shiraz Ferreira of SF International charged government for supplying military hardware to Malawi Defence Force (MDF) between 2012 and 2017.
Ferreira claims he supplied the said military equipment at $30 million in two chunks, but the interest is due to delayed payment and legal collection fees.
He sought a default judgement last year on December 7, but it has since been set aside to allow the claimant provide an amended statement and also for the AG to file a statement of defence, which has since been done.
In the filed submissions, AG Thabo Chakaka Nyirenda argues that the default judgement was irregular in that the claimant entered a final judgement instead of an interlocutory judgement which was supposed to be followed by an assessment of damages.
Reads part of the submission: “The claim herein being for an unliquidated demand, an interlocutory judgement ought to have been entered. The default judgement also included legal collections costs amounting to $208 270.78 which is by any standard too excessive and exorbitant.
“The claimant’s statement of case is embarrassing and speculative as it does not provide the specific date, month and year when the defendant took delivery of equipment as alleged. Such lack of particulars has prejudiced the defendant from properly conducting its defence.”
Chakaka Nyirenda argues that Ferreira’s claim for compound interest is statute-barred, having being caught by Section 4 of the Limitation Act (6:02) of the Laws of Malawi and, therefore, prays that the present action to be dismissed with costs.
“The claimant’s claim for compound interest is speculative and has no legal basis as it does not specify the dates the said interest became due and payable.
“In addition, the statement of case does not particularise the rate of interest and the basis for the claim for interest,” he adds.
In the initial statement of claim, Ferreira states that the said agreement was agreed upon on December 17 2012 where the company was to supply various military equipment at $30 million.
“Pursuant to the said agreement, the defendant took delivery of equipment valued in the sum of $8 382 000.00, leaving a balance of the sum of $21 618 000.00 undelivered by reason of the defendant’s default.
“By a further written agreement dated 18th March 2017, the defendant agreed to take delivery of the remaining equivalent from the claimant for the sum of $21 618 000.00. There were clear terms of the aforesaid contracts that the defendant shall pay compound interest on delayed payment the claimant,” it reads.
On November 4 2021, Ferreira commenced the present proceedings against the AG, claiming the sum of $6 942 359.49 being compound interest for delayed payments for the supply of various equipment, legal collection costs in the sum of $208 270.78 and costs of the action.
Chakaka Nyirenda will now have to scrutinise, investigate and allow for payment or defend in court compensation claims that are now hovering over K2 trillion.
Last week, the AG was forced to block a payment of K27 billion which government was supposed to pay to Savenda Management Services after a botched ambulance procurement deal.
