Kaphale saves govt K97bn on Malawi Mobile Limited  network licence case at Comesa Court

Attorney General Kalekeni Kaphale has saved Malawi government from paying K97 billion damages  Malawi Mobile Limited (MML), the country’s third cellular phone service provider licenced in April 2002, demanded in  the Common Market for Eastern  and Southern Afrcan (Comesa) court as compensation for loss of revenue for unlawful cancelling of contract.

According to court documents seen by Nyasa Times,  the Comesa court sitting in Lusaka, Zambia ruled that the cancellation of the contract was not in breach of Comesa Treaty and that the court had no jurisidiction on the matter.

The panel of Comesa Court judges was led by judge Lombe Chibesakunda, Malawian judge Micheal Mtambo, judges Abdalla Bashir, David Cha Khan Cheong and Wael Rady.

The judges ruled out that MML haf not exhausted local remedies in the national courts of Malawi.

It rule that the alleged  breach of contract by Malawi Communications and Regulatory Authority (Macra) are  based solery on Malawi domestic law and not Comesa Treaty related., are not “unlawful” within the meaning of  Article 26 of the treaty.

Kaphale, who represented government in the case alongside  Apoche Itimu from Ministry of Justice chambers, said they have save the State “ a whopping K97 billion”  which could have spent to pay MML.

The Comesa court, however ordered each party to bear own costs of the proceedings.

High Court Commercial Division ruling by Judge Frank Kapanda on April 20 2012 awarded MML US$66, 85 million  as damages for ‘unlawfully’ cancellation of mobile licence agreement between MML and MACRA.

Macra in 2005 cancelled a renewed mobile licence agreement with MML following unlawful and unconstitutional action of then Attorney General (AG) Ralph Kasambara decision to suspend the Macra board and invalidating the resolutions of the board retrospectively.

But the regulator  appealed against the damages arguing the company has no basis to demand such money.

Kaphale argued that the MML which is run by Malawians with majority shares owned by South Africans,  doesn’t need to claim such amount because it failed to prove its financial capacity.

“Three years after given the contract, it didn’t set up any structure in Malawi worth to demand such claim,” argued Kaphale.

Supreme Court panel of three judges Andrew Nyirenda, Edward Twea and Richard Chinangwa overturned the lower court’s ruling.

MML registration

MML was registered as a Private Company under registration number 6375 at the Office of the Registrar of Companies in Blantyre and a Mobile Telephone Licence, valid for 15 years, was issued to MML on April 19, 2002 by MACRA.

The initial investment Capital outlay is US$15 million likely to increase to US$ 40 million in 10 years.

The Company is owned by three investors namely Finanz Capital Management Private Limited of South Africa with 55 per cent Shares, Finanz Holdings Limited of Mauritius with 35 per cent Shares, and 3x Telecommunications with 10 percent Shares.

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