Escom faces K1bn lawsuit

The High Court in Blantyre has dissolved a freezing injunction some employees obtained to stop Electricity Supply Corporation of Malawi (Escom) from splitting into two companies.

Some 220 security guards at Escom and eight peasant farmers and land owners adjacent to Kapichira Power Station obtained the injunction to stop the split, but the High Court on September 29 2016 vacated it.

According to Paul Mzembe, lawyer of the complainants, they will still pursue the substantive matter to force Escom pay them K1 billion.

Mzembe said in an interview on Friday that his clients were pondering on appealing the court’s decision, adding Escom actually defied the injunction by proceeding with splitting into two companies when the injunction was in full force.

He said at the time Ministry of Natural Resources, Energy and Mining announced on September 22 that Escom had now officially split into two companies, the injunction was in place, ordering Escom not to split until the matter the complainants had brought to the court was resolved.

The complainants, according to court documents, obtained the injunction that effectively stopped Escom’s unbundling process which was granted ex-parte on May 15 2016 by High Court judge McLean Kamwambe in Blantyre.

Escom got the injunction dissolved by High Court judge Mike Tembo on September 29 2016; way after government had officially announced on September 22 2016 that Escom had been unbundled.

The lawyer said he reasoned with the court before the injunction was vacated that Escom had breached it through government’s action to announce that Escom was split, but the court dismissed his concerns on the basis that the announcement he was referring to was in newspapers and newspapers may lie.

Mzembe said: “We will take seriously the issue of disobeying the court order.

“There are a lot of issues that went wrong. I am meeting my clients soon and we will find a way forward. Breaching a court order is a serious offence.”

Ted Roka, lawyer representing Escom, said his client would take matters as they come. Government on September 22 announced unbundling of Escom, and a new company named Electricity Generation Company (Egenco), responsible for power generation, was born.

The new company is expected to roll out its operations early next year. High Court Judge Kamwambe earlier in May granted the freezing injunction, ordering Escom to stop the unbundling process pending resolution of the matter at hand.

Before the injunction was granted, 209 Escom security guards, through their lawyer, told the other Judge Tembo, that their employer made them to work excess hours without just or due compensation.

They said Escom duly accepted liability and promised to compensate them accordingly.

They said Escom initially made some compensation but failed to provide them with and statements regarding the amount of hours they were being paid for. They further argued the payments made to them were not commensurate with the excess hours they claimed.

Mzembe said Escom made another round of payments which again were unsubstantiated by any statement as mandated by applicable law, adding Escom also admitted the payments were inadequate. They told the court that what they got was half of the claims they made, adding Escom later informed them that half of the compensation for the excess hours had been converted to leave days and they were summarily sent on forced leave.

The other 11 security guards who were transferred to another station, the court learnt, were not compensated for living in quarters or after some found their own (off site) rentals ‘Escom defied injunction stopping unbundling process’ without receiving an allowance provided for in the employee handbook.

The third and last set of complainants, eight of them, who are peasant farmers and land owners adjacent to Kapichira Power Station, told the court that during the construction of the said power station, Escom asked them to temporarily move from the land to avoid injury during the blasting operations. They claimed that after completion of the work, Escom dispossessed them of the land.

Among the remedies sought included declaration that the land was theirs and compensations of K110 million. Mzembe said the total compensation was coming to K1 050 166 071, including that of the security guards.

The complainants also wanted to know which entity was going to be responsible for the payments if Escom proceeded with the unbundling process.

But Escom, through Roka, argued that some of the complainants were employees of Escom and should have known about the impact of unbundling in view of many sensitisation meetings the corporation held.

Roka accused the complainants of suppressing material facts when they applied for the injunction, arguing they did not disclose their knowledge regarding unbundling process.

But Justice Tembo, in his ruling, agreed with Roka that the complainants suppressed some material facts by not disclosing that they knew about what unbundling process was all about.

The court dissolved the injunction, meaning the complainants were left with two options, to appeal the court’s decision or proceed with substantive matter to claim the compensations.