Malawi risks massive costs in arbitration over canceled $9.2M helicopter deal with Zambia’s AYA Technologies.

Malawi’s government faces escalating financial and reputational risks in a $9.2 million dispute with Zambian firm AYA Technologies over a cancelled helicopter deal, as experts urge a negotiated settlement to avoid costly international arbitration. The government paid a $500,000 deposit in 2024 for two Bell 412 helicopters before canceling the purchase after finding them unfit to fly, prompting AYA to sue for $4.6 million. Legal experts warn that arbitration could result in total costs of K12 to K15 billion due to interest, fees, and penalties, citing past losses in similar cases. They stress that procedural compliance in arbitration often outweighs technical merits, making Malawi vulnerable. With concerns over middlemen in defense procurement and damage to credit standing, officials are advised to settle now to prevent further strain on public finances and international standing.