By Mercy Matonga:
Government is challenging the move by construction firm Fargo to transfer an assessment of a K31 billion claim from the Registrar of the High Court to Commercial Court Division under Judge Ken Manda.
Fargo is suing government for two separate 2011 construction contracts with the Southern Region Water Board (SRWB).
According to Ralph Mhone, one of the government lawyers who is defending the claim, the State accepted liability for failing to settle three invoices which were presented by Fargo as outstanding payment arrears for the projects.
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However, Mhone told The Daily Times that the State calculated the amount owed to Fargo plus interest accumulated over the years to be K3 billion while the company claims the interest and sum owed is at K31 billion.
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According to Mhone, the dispute in calculation was supposed to come for assessment by the Registrar of the High Court, which assigned the matter to Assistant Registrar Emilia Mvula Zidule.
However, in a move described as “surprising” by the State, Fargo, through lawyer Frank Mbeta, has applied to the court to have the assessment done by the Commercial Court Judge.
“We are questioning our colleagues as to why they want the judge to handle the assessment of damages when it is a job that a judge delegates to the registrar. We all agreed that the registrar was going to do the assessment,” Mhone said.
Mbeta refused to comment on the application, saying his position on the matter is explained in the application.
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According to court documents The Daily Times has seen, the matter originates from two contracts dated October 10 2011 and October 21 2011 to upgrade the Zomba and Mangochi water supply schemes for original contract sums of K836,381,075 and K516,919,190, respectively.
According to the court documents, Fargo is claiming the sum from a 2011 contract between State-owned SRWB and Fargo, which the company says the government has yet to fully honour by allegedly failing to pay an outstanding balance of K6 billion.
The company is claiming an additional K24 billion as accumulated interest over the period since the contract came to a close in 2014, plus legal fees.
In a sworn statement by Fargo’s representative in the case, Mbeta said since an assessment is akin to a trial and there are such complex contract terms and construction issues, it is in the interest of justice that the assessment be conducted before the judge, where the positions on the contested contractual terms would be determined and, simultaneously, the assessment done at the same time.
“I verily believe that had the matter gone through trial or summary judgement on admission before the judge, the complex issues being raised by the parties, as stated in paragraph 8 above, would have been determined by the judge, thereby giving clear direction to the registrar on the assessment of outstanding sums as per the contracts,” the statement reads.
The issues originate from projects that were funded by Opec Fund for International Development and International Development Association.
Last week, The Daily Times broke the news that the government was embroiled in a legal fight with construction company Fargo over a claim of K31 billion, with Attorney General (AG) Thabo Chakaka Nyirenda claiming that the figure is fraudulent.
The AG’s office has been claiming that the claim that the government owed the construction company K6 billion is not false but that the company was actually overpaid even before the contract expired.
Chakaka Nyirenda recently confirmed both the claim by Fargo and also the counterclaim by his office.
