8 January 2017

Malawi: 'Dobadoba' Takes Maizegate Mater to Court - Kalosye Sues Admarc, Zambia Co-Operative Federation for Breach of Contract.

Zambian private company, Kaloswe Commuter and Courier Ltd which was used as middleman (dobadoba) in the controversial maize deal between State grain trader Agricultural Development and Marketing Corporation (Admarc) of Malawi and Zambia Co-operative Federation (ZCF) has filed legal suit in Lusaka High Court on breach of contract.

Kalosye, set to make US $13 million in a 100 000 tonnes maize deal with Malawi, is dragging to court both Admarc and ZCF for failing to supply the maize.

The maize deal has since given rise to suspicion of criminal impropriety and in Malawi different sectors including civil society organisations have called for the resignation or firing of Agriculture, Irrigation and Water Development Minister George Chaponda and Admarc chief executive officer Foster Mulumbe who are implicated in 'maizegate'

The use of a private company to supply maize has raised suspicion of corruption element when Malawi government is on record to have said iits Minister Chaponda was in discussion with the Zambian government over the maize import deal, and at some point, engaged in discussions directly with Zambian President Edgar Lungu.

Both Chaponda and Mulumbe have denied any wrong doing in the 'maizegate'

According to report in Daily Nation of Zambia, Kaloswe has accused ZCF of failure to supply of 100, 000 metric tonnes of maize meant for export to Malawi despite receiving full payment for the consignment in the sum of US $34, 500, 000.00.

Commuter and Courier Limited chief executive officer Isaac Kapambwe in a statetemt of claim filed at the court said his company entered into contract with ZCF for the supply of the said quantities of maize at a unit cost of US $215 per metric tonne at a total contract sum of US $21, 500, 000.

"The plaintiff will aver that subsequently, on 17th June 2016 the plaintiff entered into a contact with ADMARC Limited (ADMARC) a company registered and domiciled in the Republic of Malawi, for the supply by the Plaintiff to ADMARC of the 100, 000 metric tonnes of 2014-2015 ex-stock Non GMO white maize at the price of US $345.00 per metric tonnes," Mr Kapambwe said.

He explained that the contract Kaloswe Commuter had entered into with ADMARC of Malawi was to be financed by Eastern and Southern African Trade and Development Bank, a bank domiciled in Nairobi, Kenyan (the "PTA Bank").

And that to ensure efficient delivery of the maize to ADMARC, the PTA Bank was to pay the full contract sum of US$ 34, 500, 000.00 directly to the source that the commodity would be purchased from, that is, ZCF.

"The plaintiff will further aver that on 1st September, 2016 the PTA Bank transferred the US $ 34, 500, 000.00 into the defendant's account, number: 0003203000439, held with First Capital Bank, Lusaka Main Branch," he said.

But that ZCF was only supposed to get US $21, 500, 000 for the 100, 000 tonnes of maize supply to Kaloswe based on the contract, and release an excess of US$ 13, 000, 000 to Kaloswe Commuter and Courier Limited.

Kapambwe in the statement says that on 30th August, 2016, wrote to ZCF for an initial advance payment of US$350, 000.00 from the excess US$ 13, 000, 000 to begin facilitation of transportation and associated logistics but that the request was rejected on the pretext that there was no need as the export permits for the maize had not yet been issued by the Ministry of Agriculture.

He has stated that it was wholly unjustified for ZCF to reject the request for payment as it was clearly indicated in the contract that "Zambia Co-operative Federation will assist the buyer by way of facilitating the process of obtaining all the relevant permits to allow the movement of grain from Zambia".

And further argued that it was never a condition precedent either orally or in writing that the funds for logistics and associated costs would be released to Kaloswe upon issuance of export permit by the Ministry of Agriculture in Zambia.

Kapambwe has further stated that following the legal principle of "privity of contract" ZCF is not permitted to interfere with the contact between Kaloswe Commuter and Courier Limited and ADMARC as it was not a party to it.

He has since applied to the court for an order of interim injunction to restrain ZCF from spending, transferring, administering or dealing with the said US $34, 500, 000.00 paid into its account by the PTA Bank as per contract before determination of the matter.

"The Plaintiff (Kaloswe Commuter) is of the view that the actions of the Defendant (ZCF) are not in good will and are deliberately intended to frustrate, not only the contract between the Plaintiff and Defendant, but also the contracts between the Plaintiff and ADMARC and the transporter," he said.

He has also requested for the courts to order ZCF for specific performance of the defendant's obligation under the contract dated 31st May 2016 between Kaloswe and ZCF.

President Peter Mutharika has instituted a Commission of Inquiry to investigate the scam in which Admarc reportedly bought maize at K26 billion from the Zambian company and it is believed that Malawi could have saved about K9.5 billion if it had bought the grain directly from the Zambian government.

The commission is being chaired by former Chief Justice Anastazia Msosa, Solicitor General Janet Banda, auditor Isaac Kayira and Mike Chinoko.

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