The Malawi Supreme Court of Appeal has thrown out an application by TotalEnergies Marketing Malawi to stop proceedings in a case Malawi Government and Prima Fuels are claiming K824 billion ($480 million) for contract breach.
In its judgement delivered in Lilongwe on Tuesday, a nine-member panel of justices of appeal (JAs) ordered that the case should revert to the High Court of Malawi Commercial Division for a full trial.
JA Rowland Mbvundula, who read the judgement on behalf of the panel, ordered that the case should start within 45 days.
Reacting to the judgement, newly-appointed Attorney General Frank Mbeta said the court’s decision aligned with the arguments presented.
“We are fully prepared for the full trial so that we can recover millions of dollars for Malawians,” he said.
One of the lawyers for TotalEnergies, Noel Chalamanda, refused to comment, saying he had no instructions from his client to do so.
The claim relates to a rebate on fuels that TotalEnergies was obliged to pay the government in accordance with a contract signed in 2001. The company allegedly stopped honouring the payment in 2006.
In 2001, the Malawi Government contracted Prima Fuels Limited to supply the country’s national fuel requirements. Prima Fuels sub-contracted TotalEnergies to supply fuel and fuel products under a contract signed on December 1 2001. Since then, Total has been supplying fuel to the government under this contract, which is still in force.
Former Attorney General Thabo Chakaka Nyirenda, who started the proceedings, said as part of the agreement, TotalEnergies was required to pay the government a rebate in arrears equal to 50 percent of the retail margin on every litre of fuel drawn from filling stations in a month.
On the other hand, TotalEnergies was also required to pay Prima Fuels Limited 50 percent of the gross margin on every litre it imported.
In an earlier interview, Prima Fuels Limited managing director Joseph Mauri Swanepoel said the issue dates back to 2006 when the French fuel company stopped paying the royalties.
