Nairobi — The East African Development Bank's search for justice and self preservation in the courtrooms of Tanzania has been as trivialised as it has been convoluted.

Throughout the litigation, the Courts have systematically focused on technicalities and blocked any attempt to interrogate the merits of the $61 million arbitral award that threatens the viability of the bank.

Between March 1990 and June 1992, the bank provided a total of $2.2 million in loans to Blueline Enterprises Ltd, a Tanzanian transporter for the purchase of 10 heavy duty trucks and other equipment.

However, in November 1995, the Bank placed the company under receivership for non-payment.

Following a successful arbitration process, the bank's initial victory was overturned by the courts, which ordered new arbitration proceedings.

The award, which some have termed "obscene," stemmed from this latter process.

The EADB's numerous attempts to have its day in court have been bogged down in legal minutiae.

Not once has it had the opportunity to tell its side of the story.

As it stares bankruptcy in the face, what has been forgotten is that it was the Bank that actually lent money to Blueline, which with interest, would now amount to over $40 million.

The bank belongs to the governments of the EAC, meaning it is the citizens who stand to lose this sum.

How it got here:

March 7, 1990:

East African Development Bank advances a loan of approximately $1.86 million to Blueline Enterprises Ltd of Tanzania to purchase 10 heavy duty trucks and other equipment.

June 16, 1992:

The EADB gives Blueline a supplemental loan of $340,000

November 24, 1995:

The Bank appoints Coopers and Lybrand (now PricewaterhouseCoopers) as receiver and manager of Blueline

December 4, 1995

Blueline procures an injunction from the High Court restraining the Bank from permitting its receiver and manager to "take over and run" Blueline's business.

February 14, 2001

The Bank and Blueline file a compromise order appointing Francis L. Nyalali (the former chief justice of Tanzania) sole arbitrator and Mr. A. T. H. Mwakyusa as his substitute.

September 30, 2002

Mr Nyalali rules in favour of Bank and dismisses Blueline's claim on the basis that it lacked legal merit.

Mr Nyalali dies shortly thereafter and Blueline files a petition challenging the award.

July 30, 2003

Mr Justice Luanda sets aside Mr Nyalali's award and orders the arbitration proceedings to commence afresh before Mr Mwakyusa.

The Bank appeals on the grounds that Mr Mwakyusa could only have been appointed if Mr Nyalali had not acted as arbitrator.

November 21, 2003

The Court of Appeal of Tanzania strikes out the appeal because the Bank has failed to obtain leave to appeal.

To rectify the error the Bank files an application in the High Court seeking an extension of time to file a new notice of appeal and an extension of time to seek leave to appeal to the Court of Appeal.

July 9, 2004

Mr Justice Mihayo of the High Court refuses to grant extensions of time.

Following commencement of arbitration before Mr Mwakyusa, the Bank applies afresh to the High Court for the removal of Mr Mwakyusa as the sole arbitrator and for the arbitration proceedings to be stayed pending determination of its petition.

May 11, 2004

The bank's application is dismissed by the Hon Justice Massati because it has not annexed the loan agreement containing the arbitration clause to the application.

The Bank files a notice of its intention to appeal to the Court of Appeal as well as an application for leave to appeal.

Simultaneously the bank files an application to prevent the arbitration proceedings from continuing pending the determination of its appeal.

The Court of Appeal strikes out the latter application on the ground that the order of the High Court was not capable of execution, and therefore a stay order relating to it could not be issued.

The bank subsequently appealed to the arbitrator to remove himself, but he declined to do so.

In light of the dismissal of the application for a stay order, the bank abandoned its intended appeal against Mr Justice Massati's decision and as a result, Mr Mwakyusa commences the arbitration proceedings.

August 31, 2005

Mr Mwakyusa delivered his verdict awarding Blueline $61,386,853 in relation to Blueline's claims against the bank.

No award is made in respect of the Bank's claim for the outstanding loan.

The bank files a petition and application in the High Court seeking to set aside the award; a declaration that arbitration proceedings have failed and consequently the dispute should be determined by a court of law; and a stay of execution of the arbitral award pending the final determination of the bank's petition.

Mr Justice Shangwa sustains Blueline's objections that the bank has omitted to annex a certified copy of the arbitral award even though the original was, at that time, before the High Court, and particularly, before the judge handling the matter, having been sent there directly by the arbitrator.

The bank filed a further application to the High Court for extension of time in order to file another petition to set aside the arbitral award.

However on the day fixed for the hearing of the said application, the bank withdraws the application upon advice of counsel that the time limit had not lapsed after all.

This advice is based on a previous decision made by the Court of Appeal which implies that the petition, being a "suit," could be filed up to six years from the date of the award.

Immediately thereafter the bank files a new petition in the High Court.

Blueline raise a preliminary objection that the petition is time barred and should be struck out.

Relying on a 2002 Court of Appeal decision that a petition to set aside an award is an "application" (and not a "suit") and was therefore still subject to the 60 days limitation.

June 22, 2007

Justice Mandia delivers his ruling noting that there are two conflicting decisions of the Court of Appeal on the matter.

He, however, decides to rely upon the earlier decision, that a petition is an "application" and declares it time barred.

July 5, 2007

EADB files a notice of appeal against the ruling of the court together with an application for leave to appeal

April 11, 2008

The bank's application for leave to appeal Justice Mandia's decision is struck out with costs.

December 2008

EADB files an application seeking an order from the court for extending the limitation period on the grounds that there is reasonable cause for the court to exercise its discretion.

March 26, 2009

Justice Sheikh of the High Court dismisses the bank's application because EADB had previously filed and withdrawn a similar application for the same order (for extension of time) without seeking liberty to reinstitute it.

May 12, 2009

Justice Shangwa dismisses the Bank's application to vacate the garnishee order by way of which Blueline sought execution of the arbitral award declaring that although the Bank's immunity from attachment of its assets did not extend to its cash.

September 22, 2009

Leave is granted to appeal against Justice Shangwa's ruling. Subsequently, Blueline consented to the grant of leave by the High Court for the appeal against the decision of Justice Sheikh.

A three-judge panel dismisses the bank's appeal on the grounds that since Justice Mandia had dismissed the petition previously brought by the bank, it was not open to the bank to go back before the same Court with an application for enlargement of time.

March 11, 2010

The hearing on the appeal against the decision by Justice Shangwa relating to the bank's immunity is adjourned after one of the judges recuses himself.