Nearly three years after the Malawi Supreme Court of Appeal ordered Sadm Pharmaceuticals to refund $4.3 million (around K7.5 billion) to cash-strapped Central Medical Stores Trust (CMST), the firm is yet to do so.
In an interview yesterday, CMST chief executive officer Chikaiko Chadzunda said while in the process of selling Sadm’s assets it had seized following non-payment last year, the firm initiated court processes that froze the disposal efforts.
After that, the office of the Attorney General (AG) moved in to mediate on the enforcement of the 2023 Supreme Court order.
The matter emanated from the 2018/19 financial year, when Sadm was among local suppliers that CMST owed and in 2019, it took the trust to court for delayed payment of $340 000.
The High Court (Commercial Decision) ordered CMST to pay $4.3 million in interest over the $340 000 debt, which the trust settled. But after an appeal, in 2023, the Supreme Court set aside the High Court judgement and ordered Sadm to refund the $4.3 million.
In the May 25 2023 order, the nine-judge Supreme Court panel further ordered Sadm to honour the judgement within 14 days from May 25 2023 and pay costs of the proceedings.
It also set aside the summary judgement High Cour t Commercial Division Judge Ken Manda delivered in June 2020, which ordered CMST to pay the penalty, but allowed Sadm to go back to the same court, under a different judge, to file for claims for late settlement of payment.
Last October, CMST seized Sadm’s assets and even wanted to auction them, but the sales did not go through due to fresh legal proceedings that resulted in the mediation.
In yesterday’s interview, CMST’s Chadzunda confirmed mediation talks on the matter, but could not provide timelines on the same.
He said: “Because the mediation has not been concluded, we don’t know how it will end, whether it will be us holding the assets or not, it’s in the hands of the Attorney General.
“As the process to sell the properties was on course, there were some court issues initiated by Sadm and the Attorney General came in, brought the parties together and wanted to see how Sadm can settle the debt, so we are waiting for that.”
Whencontactedforcomment, Sadm Pharmaceuticals lawyer, Kalekeni Kaphale, said: “I haven’t perused that file for some time. I need to look at it and check progress.”
Ministry of Justice and Const i t u tional Af f a i r s spokesperson Frank Namangale yesterday said “we are still mediating, so we cannot divulge much on the status”.
Sadm was being run by David Bisnowaty—former member of Parliament for Lilongwe City Centre Constituency who the Lazarus Chakwera administration appointed as Chargé d’Affaires to Israel—as founder and group chairperson.
Reacting to delays in executing the Supreme Court judgement, Malawi Health Equity Network executive director George Jobe said it is unfortunate that when CMST was ordered to pay, it did, while the supplier is failing to refund the payment.
“This is very unfortunate considering that in the health sector we have a number of challenges that need money, but at the same time when you look at the issues of justice it means that justice is being denied on one end,” he said.
International Coalition on Health Financing Advocacy chairperson Maziko Matemba described the delay to refund the money as saddening.
“This puts CMST’s ability to operate properly in serving Malawians in jeopardy. The country is facing drug shortages while the resources are being held elsewhere,” he said.
Human Rights Defenders Coalition (HRDC) chairperson Michael Kaiyatsa said when public institutions are owed such large sums of money, it directly affects the ability of the health system to buy drugs and medical supplies for patients.
“The most important thing is that the outcome should protect public interest. Any agreement reached must ensure that the money owed is returned within a clear and reasonable timeframe,” he said.
Centre for Social Transparency and Accountability executive director Willy Kambwandira said the mediation should not become a backdoor for diluting or renegotiating what the Supreme Court already conclusively determined.
“Any outcome that delays or weakens enforcement would raise serious governance concerns and risk setting a dangerous precedent that court judgements involving public resources can be negotiated away,” he said.
