Khato funding case awaits Supreme Court
Financing for the Salima-Lilongwe Water Project will remain stalled until the Malawi Supreme Court of Appeal decides on a stay order granted to the Attorney General (AG) which technically blocks proceedings in the High Court.
In a judgement delivered on Wednesday in Blantyre, High Court of Malawi Commercial Division Judge Ken Manda said the case before his court where he was set to hear and later determine on a number of issues, including whether the matter was commercial, remains adjourned.
The AG obtained the stay order earlier from the Supreme Court against an injunction Forum for National Development (FND) was granted by the High Court to stop two local commercial banks, National Bank of Malawi (NBM) plc and NBS Bank plc, from financing the controversial water project.
Delivering his ruling, Manda said once the Supreme Court renders its decision on the application for the stay, his court would immediately communicate to the parties at the earliest convenient date to have the matter heard.
The judge detested the approach taken by the AG, arguing he was going to find it worrying if the AG thought he could ignore the court’s directions just like that.
Manda had asked the AG to bring the application for stay inter-partes before his court, but Nyirenda sought the stay order from a single judge of the Supreme Court.
In his ruling this week, Manda said: “All in all, we are of the view that this matter remains adjourned to a date to be fixed for hearing of all substantive matters and preliminary objections to a date to be fixed, albeit after the premature issues taken to the Supreme Court are dealt with there.”
The judge said he did not determine the AG’s application for stay and wondered what ruling of his court was the AG applying for a stay. He said the application for the stay in his court was not finalised.
NBM plc and NBS Bank plc alongside Khato Civils and the AG are defendants in the case in the Commercial Division while FND is a claimant.
The AG on May 22 this year obtained the 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.
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.
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.
