By Mercy Matonga:
The government has hired three foreign lawyers to strengthen the case in which Malawi is suing French energy firm TotalEnergies for $4 billion (approximately K7 trillion) for breach of contract.
The matter arises from disagreements over remittances the French company was supposed to make from a 2001 fuel supply contract up to 2006.
However, the Malawi Government claims that TotalEnergies abruptly stopped making payments in 2006.
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The decision to sue the company follows a demand letter from Attorney General c, which yielded no results regarding the payment.
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Ministry of Justice spokesperson Frank Namangale confirmed the development but could not immediately disclose the identity of the lawyers or their law firms.
Namangale also could not disclose who will be responsible for paying the law firms but justified the need for international law experts to bolster the case.
“Preparations for the case are well underway and have reached an advanced stage,” Namangale said.
Questions regarding the hiring of law firms have become controversial due to the secrecy surrounding such engagements and potential disregard for public procurement laws.
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However, Namangale dismissed queries about the procurement of the lawyers as “immaterial” at this stage.
“What is important to know is that this is our case. The plan is to have the lawyers in the country from November 18, 2024 on a fact-finding mission,” he added.
The government believes that the intervention of the lawyers will impact the outcome of the case.
“Their insights and expertise are crucial for a thorough examination of the matters at hand and their presence will contribute significantly to a successful outcome,” an internal government correspondence which we have seen says.
The correspondence further details the activities of the lawyers once in the country, including case information research that will involve sourcing documentation from the Malawi Regulatory Authority, Malawi Investment Promotion Agency, Public Procurement and Disposal of Assets Authority, National Oil Company of Malawi, Malawi Cargo Company, Malawi Revenue Authority and National Bank of Malawi.
Additional insights provided in the correspondence include planned discussions with former Attorney General Chikosa Silungwe.
In August this year, Chakaka Nyirenda issued a demand letter to TotalEnergies, requiring payment of the alleged outstanding balance.
According to the demand letter, in 2001, the Malawi Government contracted Prima Fuels Limited to supply the nation’s fuel needs.
Prima Fuels, in turn, subcontracted TotalEnergies to supply fuel and related products under a separate contract.
According to the letter, under the contract, Total SA was permitted to use government-owned storage facilities, was allowed a remission of duty on capital equipment and was to implement the installation of an exclusive ‘TopCard System’ for the Government of Malawi.
Consequently, Total SA was obliged to pay Malawi a “rebate on fuels in arrears equal to 50 percent of the retail margin on every litre of fuel drawn from filling stations in a month,” while also paying 50 percent of the gross margin on every litre of fuel that Total Malawi imported into Malawi.
