A court in Malawi has ruled in favor of the Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) in a dispute over ownership of more than 10 million kilograms of tobacco. The High Court’s Commercial Division declared that SFFRFM is the lawful owner of the tobacco, which is now free to be sold.
The dispute arose from a novation agreement between SFFRFM and Eastbridge Estate, in which SFFRFM procured over 14.2 million kilograms of tobacco in exchange for fertiliser. However, Eastbridge later informed SFFRFM that it would no longer accept unprocessed tobacco and proposed that SFFRFM process the crop before delivery. Despite this, Eastbridge acknowledged in writing that ownership of the tobacco would remain with SFFRFM until the processed tobacco had been delivered and accepted.
Judge Trouble Kalua ruled that the tobacco, both processed and unprocessed, remains the property of SFFRFM because Eastbridge failed to supply the fertiliser as agreed. The court has given SFFRFM the leeway to dispose of the tobacco, including selling it, while settling any outstanding warehouse charges.
Attorney General Frank Mbeta described the judgment as a milestone, stating, “This is progress for the country. The court has affirmed SFFRFM’s ownership of the tobacco, which means the institution can now move forward and recover value from the crop in line with the law.”
According to court records, SFFRFM paid K1.5 billion towards processing costs, but Eastbridge still did not deliver the fertiliser as agreed. The ruling allows SFFRFM to move forward with selling the tobacco and recovering its value.
Article source: times.mw | Image credit: The Times Group
