The Malawi Government has sued Total Malawi for K350.4 billion in connection to a fuel contract signed in 2001.
Malawi and Prima Fuels which brokered the contract claim that Total Malawi and French fuel company Total SA were supposed to pay the money over the past years.
The case was taken to a commercial court in Malawi but has been referred to a South African court for arbitration.
Lawyer for Prima Fuels Latham Dixon told the South African media earlier this week that his clients were in 2001 mandated by the Malawi Government to supply all of Malawi’s annual fuel requirements.
Prima Fuels then invited tenders and awarded a contract to Total Malawi to supply fuel to Malawi. The French company Total which is now called Total SA also formed part of the agreement.
Over the past 18 years, Total SA has supplied fuel to Malawi as part of the deal.
“In terms of the agreement, Total SA and Total Malawi is supposed to pay certain rebates back to the Malawi Government and according to our calculations it is to the tune of US$480 million (K350.4 billion),” said Dixon.
He added that Total Malawi has not denied the terms and conditions of the agreement but Total SA which is also party to the agreement denies that it is liable to make any payments and that is the reason the matter is in court.
Currently, the contract is still in force and Total SA is still supplying fuel to the Malawi Government while also enjoying benefits such as tax waivers.