Kaloswe sues ZCF

Fri, 06 Jan 2017 10:29:05 +0000

By Chikumbi Katebe

A PRIVATE Zambian company that was set to make US $13 million in a 100 000 tonnes maize deal with Malawi has now sued the Zambia Co-operative Federation for breach of contract for failing to supply the maize.

In Malawi, the contract has become the subject of a commission of inquiry with investigations centering on the expensive price of US$395 per tonne compared to US$250 per tonne.

Meanwhile, the Malawian Minister of Agriculture has distanced his government from the maize contract with Kaloswe Commuter and Courier Limited, and has confirmed that his country bought the maize in a government to government contract through ZCF/ADMARC.

The Malawian minister has applauded a commission of inquiry appointed by that country’s Head of State, Professor Peter Mutharika to investigate the deal.

Kaloswe has accused ZCF of failure to supply of 100, 000 metric tonnes of maize meant for export to Malawi despite receiving full payment for the consignment in the sum of US $34, 500, 000.00.

According to a statement of claim filed into the Lusaka High Court, Kaloswe Commuter and Courier Limited chief executive officer Isaac Kapambwe said his company entered into contract with ZCF for the supply of the said quantities of maize at a unit cost of US $215 per metric tonne at a total contract sum of US $21, 500, 000.

“The plaintiff will aver that subsequently, on 17th June 2016 the plaintiff entered into a contact with ADMARC Limited (ADMARC) a company registered and domiciled in the Republic of Malawi, for the supply by the Plaintiff to ADMARC of the 100, 000 metric tonnes of 2014-2015 ex-stock Non GMO white maize at the price of US $345.00 per metric tonnes,” Mr Kapambwe said.

He explained that the contract Kaloswe Commuter had entered into with ADMARC of Malawi was to be financed by Eastern and Southern African Trade and Development Bank, a bank domiciled in Nairobi, Kenyan (the “PTA Bank”).

And that to ensure efficient delivery of the maize to ADMARC, the PTA Bank was to pay the full contract sum of US$ 34, 500, 000.00 directly to the source that the commodity would be purchased from, that is, ZCF.

“The plaintiff will further aver that on 1st September, 2016 the PTA Bank transferred the US $ 34, 500, 000.00 into the defendant’s account, number: 0003203000439, held with First Capital Bank, Lusaka Main Branch,” he said.

But that ZCF was only supposed to get US $21, 500, 000 for the 100, 000 tonnes of maize supply to Kaloswe based on the contract, and release an excess of US$ 13, 000, 000 to Kaloswe Commuter and Courier Limited.

Mr Kapambwe averred that on 30th August, 2016, wrote to ZCF for an initial advance payment of US$350, 000.00 from the excess US$ 13, 000, 000 to begin facilitation of transportation and associated logistics but that the request was rejected on the pretext that there was no need as the export permits for the maize had not yet been issued by the Ministry of Agriculture.

He has stated that it was wholly unjustified for ZCF to reject the request for payment as it was clearly indicated in the contract that “Zambia Co-operative Federation will assist the buyer by way of facilitating the process of obtaining all the relevant permits to allow the movement of grain from Zambia”.

And further argued that it was never a condition precedent either orally or in writing that the funds for logistics and associated costs would be released to Kaloswe upon issuance of export permit by the Ministry of Agriculture.

Mr Kapambwe has further stated that following the legal principle of “privity of contract” ZCF is not permitted to interfere with the contact between Kaloswe Commuter and Courier Limited and ADMARC as it was not a party to it.

He has since applied to the court for an order of interim injunction to restrain ZCF from spending, transferring, administering or dealing with the said US $34, 500, 000.00 paid into its account by the PTA Bank as per contract before determination of the matter.

“The Plaintiff (Kaloswe Commuter) is of the view that the actions of the Defendant (ZCF) are not in good will and are deliberately intended to frustrate, not only the contract between the Plaintiff and Defendant, but also the contracts between the Plaintiff and ADMARC and the transporter,” he said.

He has also requested for the courts to order ZCF for specific performance of the defendant’s obligation under the contract dated 31st May 2016 between Kaloswe and ZCF.

Meanwhile, Kaloswe has equally dragged ADMARC to court for breach of contract.