A long-running dispute between businessman Leston Mulli and the State has ended in a major High Court ruling that could force government to pay Mulli and five companies massive compensation running into billions of kwacha.
The High Court of Malawi has ruled that the 2012 government directive which barred Mulli and five of his companies from doing business with public institutions was unlawful and issued without legal authority.
Delivering judgment, Justice Allan Hans Muhome found that the then Attorney General and Minister of Justice and Constitutional Affairs, Ralph Kasambara SC, acted beyond his powers when he issued the directive on September 5, 2012.
“Mr Kasambara SC made the impugned Directive when he had dual roles of Attorney General and Minister of Justice and Constitutional Affairs. He was clearly a public officer. And he made that Directive in the way of his office.
“In the absence of a plausible explanation from the Defendant, it is the judgment of this Court that Mr Kasambara, SC had acted with the specific intent to injure the Claimants. He acted without legal authority and the Claimants were not heard in any way,” reads parts of the judgment.
The court also held that the affected companies were not given an opportunity to be heard before the directive was imposed, a move the judge said violated basic principles of fairness and lawful administrative action.
As a result of the directive, Mulli and five companies, including Mulli Brothers Limited, Sunrise Pharmaceuticals, Celcom Limited, National Bus Company of Malawi and Chombe Foods Limited, say they suffered devastating financial losses after being shut out of government contracts.
The companies later dragged the State to court, claiming damages of about K270 billion, arguing that ministries, departments and agencies stopped trading with them immediately after the directive was circulated.
Government, through the Attorney General, had denied liability and raised several legal objections, including claims that the matter should have been handled through judicial review and that the claim was time barred, arguments that were already dismissed in earlier rulings.
The court ultimately focused on whether the directive amounted to misfeasance in public office, a legal test used when a public officer abuses power or acts with malice or reckless disregard of consequences.
Justice Muhome found that the directive was not only unlawful but also issued in bad faith, saying the State failed to provide any credible justification for singling out the companies.
The court further noted that although the directive was later reversed in 2014, no formal action was taken to prosecute the allegations that had initially justified the ban, weakening the government’s position.
In his ruling, the judge concluded that the conduct amounted to abuse of public office and ordered that damages arising from the losses be assessed by the Chief Registrar if the parties fail to agree within 14 days.
“The Claim, therefore, succeeds with costs. Damages for loss suffered by the Claimants, directly arising from the issuance of the Directive before it was reversed, shall be assessed by the Chief Registrar, if not agreed by the parties within 14 days,” it concluded.
