Malawi seeks K7tn from fuel deal
Malawi Government is claiming $4 billion (about K7 trillion) from TotalEnergies Marketing in France for breach of a fuel contract dating back to 23 years.
In a demand letter from Attorney General (AG) Thabo Chakaka Nyirenda, Malawi states that the claim relates to a rebate on fuels TotalEnergies was obliged to pay government, in accordance with a contract signed in 2001, but the company allegedly stopped honouring the payment in 2006.
“I have been instructed by the Government of the Republic of Malawi [GoM] to demand from you the immediate payment of the sum of $4 000 000 000 [four billion US dollars].
“The GoM has further instructed me to demand from you interest on the said sum of $4 000 000 000 [four billion US dollars] at the commercial bank lending rate,” reads the letter dated August 2 2024 signed by the AG.
Information from the AG’s office indicates that in 2001 government mandated Prima Fuels Limited to supply the country ’s national fuel requirements. But Prima Fuels is said to have later invited tenders from oil companies and selected TotalEnergies Malawi to supply fuel and fuel products before signing the contract on December 1 2001.
Since then, according to the demand letter, Total has been supplying fuel to government under the contract which is still in force.
The AG’s office has also instructed a United Kingdom-based law firm Messrs Hogan Lovells International LLP to protect government interest in the matter. The legal firm will work hand in hand with the AG.
Under the contract, TotalEnergies enjoyed access to storage facilities, remission of duty on capital equipment and exclusive implementation of a ‘Top Card System’ to the government.
The AG was yesterday not available, but Ministry of Justice spokesperson Fr a n k Nama n g a l e confirmed the demand against Total Energies. He, however, declined to divulge further details.
But in a separate interview Prima Fuels Limited managing director Joseph Mauri Swanepoel confirmed demanding the amount and that the issue dates back to 2006 when the French fuel company stopped paying the royalties.
He said the High Court referred the matter to the International Court for Arbitration as per the contract but mediation took too long and never got to a conclusion until last year when Prima took the matter back to the High Court of Malawi.
Malawi Honorary Consul in France Dr Nir Gess is facilitating the engagement of the legal representative in France.
