10 December 2012

Tanzania: Tanesco, Dowans Saga Drags On

Dar es Salaam — Settlement of Arbitration Award by the International Chamber of Commerce (ICC) between the Tanzania Electric Supply Company Limited (TANESCO) and Dowans Tanzania Limited and Dowans Holdings of Costa Rica, still remains dull regarding a decretal sum of over $65.8m.

This was prompted by the Tanzania Court of Appeal's move to adjourn the applications of the parties until February 2013 over execution of the ICC's award amounting $65.8m with annual interests of 7%.

A panel of judges at the Court was on December 5, 2012,forced to adjourn the matter following notification by counsel Kennedy Fungamtama from Dowans, that one of the judges, Justice Kathrine Oriyo had been involved in the suit as a judge of the Commercial Division of the High Court of Tanzania.

The said counsel's notification made Justice Oriyo for interest of justice disqualify herself. Her reaction led the court not to entertain the three applications till next year.

The public utility institution had filed the application seeking a conservatory order of DTL's plant pending the decision of the ICC. The said judge dismissed the application but restrained DTL from selling or disposing its plant.

Another one is Civil Application No. 53 of 2012 filed by DTL and DHSA against TANESCO in respect of the decision Judge Emillian Mushi in Misc. Civil Application No. 8 of 2011 of the High Court of Tanzania dated 28th September, 2011.

Fungamtama had filed it for the purposes of moving the court for the order that the Notice of Appeal filed by TANESCO on 4th October, 2011, be struck out for being time barred.

The third one is Civil Application No. 142 of 2012 filed by TANESCO against DHSA and DTL, wherein their teams of counsels are disputing payment of $65.81m to the respondents because will entail great economic loss to the public institution.

The team of legal experts consists of Richard Karumuna Rweyongeza, Prof. Florens Luoga, and Prof. Palamaganda Kabudi, who are expected to jointly move the Court for orders to stop payment of such money to the two foreign firms.

They indeed asserted that TANESCO has already deposited a total sum of $30m as security in compliance with an order of the High Court of Justice Queen's Bench Commercial Division, Royal Court of Justice, London.

Furthermore, they expressed to the balance of convenience that the power utility would likely suffer in the event the order for stay for execution of the decree is not granted.

The application was supported by the affidavit of the TANESCO's Chief Legal Counsel, Godwin Ngwilimi, who said both parties had arbitration dispute before the ICC over the principal sum of over $65m.

He attributed the public power utility being dissatisfied with the ICC award to extent of challenging it in the court of law to that effect. He however gave 23 reasons ranging from ICC's arbitration award to the petition in the High Court of Tanzania at Dar es Salaam.

He stated that while still aggrieved by such decision, they intend to seek redress from the Court of Appeal upon having lodged the notice of intention to appeal although the Dowans had been frustrating their efforts by referring the matter to Royal Court of Justice in London.

Ngwilimi further emphasized that if the execution would be allowed to proceed, that the power utility's ability to generate, transmit and distribute the much needed electricity to the public will be adversely affected, thereby causing a serous power crisis and damage to the Tanzanian economy.

"That, further to the foregoing averments, I state that the damage arising from the power crisis will be substantial and irreparable and not capable of being compensated by any award of damages," stressed Ngwilimi, praying the Court to exercise it discretion in protection the interest of TANESCO by staying the execution of the decree until determination of their intended appeal.

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