The High Court Commercial Division in Lilongwe has limited a $480 million (about K824 billion) fuel rebate claim against Total Malawi Limited to the six years preceding the filing of the lawsuit.
In a ruling delivered on Wednesday, Judge Trouble Kalua barred claims for rebates due before July 2013, holding that they are statute-barred under Section 4(1) (a) of the Limitation Act.
The decision means Prima Fuels Limited and the Attorney General, representing the Ministry of Finance and Economic Planning, can now pursue rebates accrued between July 10 2013 and July 11 2019, subject to proof of loss in the main trial.
The claimants filed the suit on July 11 2019, citing a fuel supply agreement signed in December 2001. Under Clause 8.1 of the agreement, Total was required to pay monthly rebates to both Prima and government within 30 days of the end of each month.
Kalua ruled that each missed monthly payment constituted a separate breach of contract, triggering a new six-year limitation period.
“The obligation to pay rebates was monthly,” the judge said. “At the end of each month, the obligation to pay arose in respect of the month gone by.”
He added: “Every monthly payment from today going backwards for six years would be within the limitation period. And every monthly payment unpaid going beyond six years would be caught by the statute.”
Total had argued that the entire suit was time-barred; claiming the cause of action arose in 2002, or alternatively after its letter of March 29 2012, which it said signalled an intention to abandon the contract.
The company further argued that Prima accepted the repudiation through silence. The court rejected the argument.
Kalua found that while Total’s letter amounted to anticipatory repudiation, Prima never clearly and unequivocally accepted it. He ruled that the agreement, therefore, remained binding.
“Acce-ptance must be clear and une-quivocal,” he said, noting that silence did not constitute acceptance.
The judge also dismissed Total’s claim that Prima’s letter of March 9 2012, was a formal notice of breach under Clause 15, saying it was instead a request for information to establish a payment plan.
On a non-waiver clause in the agreement, Kalua held that it did not prevent Total from relying on a statutory limitation defence, noting that any intention to exclude statutory rights must be explicitly stated.
The court also dismissed Prima’s application to strike out Total’s re-amended defence, describing it as untimely.
The preliminary ruling did not quantify the rebates owed.
Outstanding issues, including the exact calculation of rebates, proof of performance and distribution of entitlements between Prima and government, will be determined at trial.
Attorney General Frank Mbeta welcomed the ruling.
“We were looking forward to recovering the money due to the government. This judgment is a milestone in the recovery process,” he said.
