Judge queries AG Supreme Court stay order
High Court of Malawi Commercial Division Judge Ken Manda has questioned the manner the Attorney General (AG) proceeded to obtain a Malawi Supreme Court of Appeal stay order on the Lilongwe-Salima Water Project case.
In his address to parties to the case that included AG Thabo Chakaka Nyirenda, lawyers representing National Bank of Malawi (NBM) plc and NBS Bank plc as well as Khato Civils and Forum for National Development (FND) in Blantyre yesterday, the judge wondered why the AG went to the Supreme Court when his instructions were clear that the application for stay be brought before his court inter-partes.
“There was no decision made by this court,” said Manda.
In this regard, he said the matter was not going to proceed until a decision from the Supreme Court is made on the AG’s application.
The AG on May 22 this year obtained a stay order that put aside implementation of the Commercial Court’s order stopping NBM plc and NBS Bank plc from extending a K105 billion loan to government for the project as approved by Parliament.
Yesterday, Manda said he was surprised with the stay order the AG obtained from the Supreme Court on an interlocutory matter where he did not make any decision. He also wondered on what basis the stay order was granted.
The FND injunction effectively stopped NBM and NBS Bank from disbursing the loan.
But the stay order, issued by Justice of Appeal Dingiswayo Madise, meant that the two banks may proceed to disburse the loans as the blockade stopping that process was no longer there.
Madise granted the stay order on conditions that the AG should file an application with notice within seven days, FND to respond within 14 days and hearing of summons to be heard within 21 days from May 22 2023.
In applying for the stay order, the AG argued that the judge in the lower court, Manda, erred in law and in fact in holding that the presentation as to whether the matter before the court below was a commercial one or not had been overtaken by events.
He said the Commercial Court also erred in assuming jurisdiction over the matter when there was no commercial relationship between the parties and that the matter was not commercial in nature.
But private practice lawyer Edgar Kachere, who is representing FND, stated in an earlier interview that he was making an application to vacate what he called “unprocedural order obtained through misrepresentation of facts”.
He said: “The Attorney General misrepresented facts to the Supreme Court. The High Court [Commercial Division in Blantyre] did not dismiss his application for stay. Rather the court told him to file a formal application in writing. When he did so exparte, the court told him to bring it interpartes. Then he rushed to the Supreme Court and misrepresented facts.
“Our position is that the matter is purely commercial in nature in that the Commercial Court is being asked to determine whether a party that breaches the contract is given different terms and assistance instead of the government terminating the contract and re-tendering the whole contract.”
The lawyer said Khato Civils won the contract on the basis that it would source financing, arguing that once it failed, it meant that the contract became void, as such government needed to retender the contract.
But the AG argued in an interview earlier that the lower court did not entertain his application for a stay and he had no choice, but to turn to the Supreme Court to protect interests of government.
The Salima-Lilongwe Water Project was initiated in 2015 and was supposed to be completed in 2018/19 financial year, but it has faced a number of challenges, including funding.
FND, led by its national coordinator Fryson Chodzi, obtained the injunction on May 4 2023 stopping the banks from issuing the loans to government, arguing the nation needed an explanation to what happened to a financier that the contractor Khato Civils identified, Quay Energy Corp.
While Khato Civils’s lawyer Chancy Gondwe argued in the lower court that government passed the NBS Bank plc and NBM plc (Lake Malawi Water Supply Project) Loan Authorisation Bill, 2023.
