Forum for National Development (FND), is working on an application to vacate the stay order the Malawi Supreme Court of Appeal granted to the Attorney General (AG) on Monday.

The Supreme Court granted the AG Thabo Chakaka Nyirenda the stay order on an injunction that FND obtained in the High Court that effectively stopped National Bank of Malawi (NBM) plc and NBS Bank plc from disbursing K105 billion loans to government for the construction of Salima-Lilongwe Water Project by Khato Civils, as was approved by the last sitting of Parliament.

Simbi Phiri owns Khato Civils

The stay order issued by Justice Dingiswayo Madise meant that the two banks may proceed to disburse the loans as the blockade has been stayed on conditions that the AG files fresh application with notice within seven days, FND to respond within 14 days and hearing of summons be heard within 21 days from Monday, May 22, 2023.

Private practice lawyer Edgar Kachere, representing FND, said in an interview they were making an application to vacate what he called “unprocedural order obtained through misrepresentation of facts”.

“The Attorney General misrepresented facts to the Supreme Court. The High Court [Commercial Division in Blantyre] did not dismiss his application for stay. Rather the court told him to file a formal application in writing. When he did so exparte, the court told him to bring it interpartes. Then he rushed to the Supreme Court with and misrepresented facts.

“Our position is that the matter is purely commercial in nature in that the Commercial Court is being asked to determine whether a party that breaches the contract is given different terms and assistance instead of the government terminating the contract and re-tendering the whole contract,” Kachere argues.

The lawyer said Khato Civils won the contract on the basis that it would source financing. Once it failed, it means that the contract became void, hence the need to re-tender, especially where now the government would assist any contractor to do the work. Other parties would be entitled to participate in the contract,” he says.

But the AG is arguing that the lower court did not entertain his application for a stay and he had no choice but to turn to the Supreme Court to protect interests of government.

Nyirenda argued that the judge in the lower court erred in law and in fact in holding that the presentation as to whether the matter before the court below was a commercial or not had been overtaken by events.

He said the lower court erred in assuming jurisdiction over the matter when there was no commercial relationship between the parties and that the matter was not commercial in nature.

The Salima-Lilongwe Water Project was initiated in 2015 and was supposed to be completed in 2018/19, but it has faced a number of challenges, including funding.

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