ECM sued for breach of contract
A private company, JF Investments Ltd, has taken the Episcopal Conference of Malawi (ECM) to court for failing to honour part payment for the supply of groundnut seed which the company supplied in December last year.
The contract between ECM, under which the project implementers,the Catholic Development Commission of Malawi (Cadecom) falls, and JF Investments was for the supply and delivery of certified CG7 Groundnuts seed for the United States Agency for International Development (Usaid) funded Integrating Nutrition in Value Chain Project which Cadecom was implementing.
According to documents in our possession, JF Investments supplied 15 tonnes at K925 per kilogramme inclusive transport making the total to be paid at the end of the contract K13.875 million (about $35 000).
However, payment terms as agreed in the contract stated that partial payment, K6.9 million (about $17 250) would be made upon delivery of order within 30 days, but this has not been the case.
“Our clients instruct us that they fulfilled the contractual obligations and your organisation duly signed our client’s delivery note signifying receipt of delivery of contracted goods. To our clients dismay, more than 30 days have since elapsed since their delivery. They view this as breach of contract,” a claim for payment from law firm Ralph Kasambara SC Law Offices reads.
The claim further warned that if the claimed amount is not settled within five days (from January 23 2014) without explaining reasons, matter would be taken to court for arbitration and ECM would be liable to pay the owed amount plus legal fees.
After the five days elapsed, JF Investments extended by a further three days on request from ECM to no avail, prompting the company to instruct the lawyers to commence a law suit.
However, communication from the head of Feed the Future-Integrating Nutrition in Value Chain Project, Ian Goggin dated January 28 2014 indicated that no payments would be made to any seed suppliers until investigations have been undertaken and Usaid was happy with the outcome before payment is authorised.
“I understand the pressure you are under to make payment but funding for the project comes from the US government and we cannot approve payment for goods or services which are not up to specification and as you know, Usaid has intimated that this is the case with seed procured for distribution by Cadecom,” reads an email response from Goggin to Carsten Mulume, Cadecom national secretary.
