Court rules in favour of Khato

The Malawi Supreme Court of Appeal on Friday dismissed a case by Malawi Law Society (MLS) against Khato Civil, clearing a way for the engineering company to proceed with the $500 million (K400 billion) Salima-Lilongwe water project.

The parties that included the MLS, Khato Civils as an interested party and Lilongwe Water Board (LWB), battled it out in the Supreme Court where the lawyers’ body wanted sustenance of a stay order the Supreme Court vacated.

The Supreme Court earlier on September 21 vacated the stay order the High Court in Zomba granted to MLS on September 15 that effectively stopped Khato’s ground works for the project.

This meant the Supreme Court gave Khato Civils a lifeline to continue with its activities pending the hearing which the Supreme Court settled on Friday by dismissing the MLS case, effectively permitting Khato Civils to freely rollout the multibillion kwacha project.

MLS president Khumbo Soko said in an interview yesterday that the society was studying the ruling before deciding the next course of action.

He conceded Khato Civils, as per the Supreme Court ruling of Friday, were at liberty to continue with all activities they so wish to implement. Determining the matter, Supreme Court judge Lovemore Chikopa said all parties in the matter before the High Court ceased to exist upon the expiry or lapsing of time the Law Society should have filed substantive summons for leave for judicial review.

MLS was supposed to file the substantive summons by May 5 2017, 14 days after the High Court granted leave for judicial review. But it only did this nine days after May 5, according to the court record.

Chikopa said if the contention was to be sustained that the High Court had lost jurisdiction by close of court business on May 5 2017, the conclusion was going to be simple enough.

“It would mean that whatever ‘happened’ beyond that date/time was nothing, but exercises in futility. There would have been no proceedings. No interlocutory injunction granted [to stop the project].

“There would by extension be no matter before us for we cannot be called upon to stay phantom interlocutory injunctions or proceedings. Ones that do not exist,” the judge said.

But the Law Society had argued on its part that the matter of the lapsed or expired leave should have been placed before the High Court, and not Supreme Court.

But Chikopa observed that to be fair to the Law Society, the High Court record showed that the Law Society on June 2 2017 filed a summons seeking to extend time within which to file the motion and also to amend the same.

“It was set down for hearing on June 15 2017. It was not heard. According to the Judge’s notes on the summons the society’s counsel did not pitch and did not even pick up the notices for service,” he observed.

Chikopa, therefore, ruled that any orders made after the expiry of the leave, including the order of interlocutory injunction and the one refusing to vacate the leave, were of no effect.

“ The court lost jurisdiction to preside over the matter. Regarding the leave there was in fact nothing to vacate the leave having expired [or] lapsed,” he said, ordering each party to foot own costs.

Chikopa earlier on observed that considering that LWB and Khato Civils had agreed that construction works would not start without an EIA (Environment Impact Assessment), Khato had actually gone out and identified an EIA consultant.

“Can it be true that there was no alternative remedy about this matter? There was in our view. We do not see a reason why the society opted for litigation instead of monitoring the first [LWB].

“The [Law] Society referred to [Khato] bringing into Malawi equipment particularly the trenchers and spoke of it as evidence that [they] had already started implementing the contract without doing an EIA. The society was perhaps reading too much into the above.

“To begin with, a proper reading of the contract and the briefing notes shows that [Khato] had to prove capacity, including possession of requisite equipment. Possession out of Malawi would not make too much sense. There should, therefore, be nothing wrong with [Khato] bringing trenchers into Malawi. It is not evidence that they have started trenching. Or will soon start,” he observed.

Chikopa said it was obvious the MLS was not going to be able to pay for damages if the project was stopped and the contractor successfully sued.

He stated that the High Court said a lot about the society’s lack of financial muscle.

Khato Civils is a construction and engineering company headquartered in South Africa and owned by billionaire Simbi Phiri a Malawian by parentage.

In its application for the judicial review, MLS had put LWB, Ministry of Agriculture, Irrigation and Water Development, the director of Environmental Affairs and Ministry of Natural Resources, Energy and Mining as respondents in that order.

In May, Khato Holdings Limited unveiled to the media multi-million kwacha machinery for the construction of the pipeline from Lake Malawi in Salima to Lilongwe to ease water problems in Lilongwe, disclosing that $13 million (K9.8 billion) had already been invested.