Court rejects Mulli Brothers appeal to dismiss RBM’s K1.4bn claim on fertilizer contract

High court has rejected an application by Mulli Brothers Limited to dismiss Reserve Bank of Malawi’s action to recover 1.4 billion kwacha of fertilizer contract from the company

Judge Jabar Alide has meanwhile given Mulli Brothers lawyers 7 days to file their defense on the case

Mulli brothers sought the court order but attorney general Thabo Chakaka Nyirenda opposed the application

Facts of the case are that Reserve Bank of Malawi and Trade and Development Bank TDB entered into a trade finance facility agreement to allow importation into Malawi of white petroleum products, fertilizer and other strategic commodities by government nominated companies

In 2019 Mulli brothers as one of the nominated companies entered into a contract with government acting through small holder farmers fertilizer revolving fund to supply fertilizer under farm input subsidy program in total sum of 2.1 billion kwacha

However Mulli Brothers paid to Reserve Bank of Malawi only 709 million kwacha leaving an outstand 1.4 billion kwacha hence the central bank commenced the legal action at High court

In response Mulli Brothers Limited applied to the court that the matter should have been referred to arbitration but Reserve Bank of Malawi argued that the company had admitted owing the bank the amount claimed

In his ruling judge Alide said “the application by Mulli Brothers failed to demonstrate that the company is ready and willing to do all necessary things for proper conduct of the arbitration.”

Therefore the court rejected Mulli Brothers Limited appeal to dismiss Reserve Bank of Malawi’s action to recover 1.4 billion kwacha from the company