Local arbitrator Patrice Nkhono has awarded Malawi Communications Regulatory Authority (Macra) $22 961 719 (about K23 billion) in a legal battle against an American company, Agilis International Inc for breach of contract.

The award follows an October 2022 claim Macra filed against the company, seeking $22 961 719 in damages, compound interest at 10 percent above the National Bank of Malawi plc base lending rate and arbitration costs.

Malawi Law Society (MLS) appointed Nkhono, a senior counsel, as the arbitrator in the matter, but Agilis International Inc did not defend or participate in the proceedings.

Macra’s claim related to a breach of contract by Agilis International, which was engaged by the authority in 2010  to supply, install and commission a telecommunications monitoring system called the Consolidated ICT Regulatory Management System (Cirms), popularly known as “the spy machine”.

Arbitrated the case: Nkhono

Macra first entered into the Master Services Agreement on May 21 2010 with the American firm for the supply of the Cirms, but the implementation encountered challenges when telecommunications operators in the country commenced a legal suit against implementing the Cirms.

Through its deputy director of legal services Dan Chiwoni, Macra told the arbitrator that it entered into the contract with Agilis to supply computer hardware and software.

He testified that out of four itemised list, Agilis only supplied the quality of services functionality and partially delivered the revenue assurance functionality that only allowed Macra to monitor international, but not local traffic.

Chiwoni further said Macra had paid Agilis $2 961 719 over a 10-year period.

The arbitrator learnt that in a letter dated April 5 2021, Agilis offered to replace all hardware devices, upgrade all software to the latest version, implement all deliverables within 90 days, and provide on-site Agilis personnel for one month.

However, the regulator rejected the proposal.

In his ruling, Nkhono observed that Macra’s claim of $22 961 719 appeared sufficient once the aspects of the contract Agilis failed to deliver upon are considered.

But he rejected Macra’s plea for an additional $17 million as damages for breach of contract, arguing that a more thorough assessment of damages would require additional evidence.

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