‘SA-LL water case is civil’

Supreme Court removes Khato, NBM, NBS Bank from case

FND told to sue either President, Parliament or Minister of Finance

The Supreme Court in Blantyre on Tuesday ordered that the case surrounding loan authorisation by Parliament to the Malawi Government for construction of Salima-Lilongwe Water Project be filed and continued at the High Court Civil Division.

Justice of Appeal Dingiswayo Madise ordered that the case be brought in the High Court Civil Division by way of a judicial review, and being public interest litigation, the President, Parliament and Minister of Finance, be made respondents.

Forum for National Development (FND) initially filed the case in the High Court Commercial Division against the Malawi Government and two commercial banks set to disburse the funds and the contractor of the Salima-Lilongwe Water Project, Khato Civils, where an injunction against the funds’ disbursements was obtained.

But on Tuesday’s Supreme Court order meant that Khato Civils, National Bank of Malawi plc and NBS Bank plc, are off the hook as parties to the case, a plea the two banks also advanced in the court not to be dragged into the political realm.

In the initial lawsuit in the Commercial Division in Blantyre, FND sued Attorney General (AG) Thabo Chakaka-Nyirenda and Khato Civils while  the two banks were added as parties.

But when the matter was set for hearing on June 15 2023 and before a preliminary issue was addressed about the Commercial Court’s jurisdiction over the case, the court denied to grant the AG order of stay made orally on the FND injunction.

The stay order application by the AG was denied when it was clear the case was being adjourned to a later date as there were recent notices filed while  the issue of the court’s jurisdiction was to be resolved.

The lower court, presided over by Judge Ken Manda, asked the AG to make his application inter-partes, where both parties needed to be heard before him. The judge had, earlier on, invited the parties to address the court whether the issue at hand was commercial in nature.

Before the issue was determined, the AG, instead, rushed to the Supreme Court where the stay order on the injunction of the FND was granted.

The Supreme Court on Tuesday, immediately it heard submissions by the AG, Khato Civils lawyer Chancy Gondwe, two lawyers representing the two banks Lester Mwantisi and Tusume Mwabungulu, and also responses from FND lawyers Holmes Mazambani and Zwelithini Chipembere, made its decision to transfer the matter to the Civil Division of the High Court.

This meant Justice Madise agreed with the AG and others that the matter is purely civil, and not commercial as was argued by FND. The court said a written ruling would be ready in 14 days’ times.

The AG, in his arguments earlier, told the Supreme Court that FND could not represent Malawians.

“Malawians are represented by elected representatives who passed the Loan Authorisation Act. Forum for National Development Limited, therefore, lacked locus standi in the matter.

Siding with the AG, Gondwe, representing Khato Civils, argued there was no commercial relationship between FND and NBM, NBS Bank, Khato Civils and the Malawi Government.

“These issues border on public law category. They [FND] are challenging an Act of Parliament; these are issues that can be challenged through judicial review. These are purely policy issues,” he argued.

Mazambani, representing FND, argued the stay order was obtained in the Supreme Court by misrepresentation of what happened in the lower court and the application was made prematurely.

Teaming up with Chipembere, the two pleaded with the court to vacate the stay order and refer the matter back to the Commercial Division, pleas the Supreme Court dismissed.

The AG and Gondwe said they were happy that the Supreme Court has agreed with them and ordered in their favour while Chipembere said the Supreme Court made a decision within its powers and were going to consult their client for a way forward.

The loan for the Salima-Lilongwe Water Project was duly authorised by an Act of Parliament. The project was initiated in 2015.