THE Tanzania Electric Supply Company (Tanesco) has been forced to pay 30 million US dollars (about Sh48 billion) as security to safeguard its case pending before the Court of Appeal, challenging payment of 65,812,630 US dollars (about Sh105 billion) to two Dowans Companies.
Court documents obtained show that such security was deposited before the High Court of Justice Queens Bench, Commercial Division at the Royal Court of Justice in London in two installments to prevent Dowans Companies to execute an award for the highly contested payments.
Before depositing the amount, two Dowans Companies, Dowans Holdings (Costa Rica) and Dowans Tanzania Limited, through their advocate, Mr Kenneth Fungamtama, had applied at the London Court to execute the award in question after Tanesco lost its case in the High Court of Tanzania in 2011.
Proceedings before the Court of Appeal indicate that two applications have been filed by both Tanesco and Dowans Companies following a decision given on September 28, 2011, by Tanzanian High Court Judge Emilian Mushi. The Court of Appeal is set to hear the two applications next Friday.
Judge Mushi, in his ruling, rejected the petition by the country's giant electricity supply company, challenging the award given by the International Chamber of Commerce Arbitration (ICCA) in favour of Dowans Companies following a dispute involving generation of electricity in Tanzania.
In its application, Tanesco is asking judges on appeal to stay the execution of the order for the payment to Dowans Companies, pending hearing and determination of their appeal case on the matter. Already Tanesco has instructed four senior advocates, including two professors, to argue the application.
A senior official with Tanesco, Mr Godwin Ngwilimi, has sworn an affidavit to support the application, stating that having obtained judgment and decree in their favour, the two Dowans Companies filed an application for execution before the London High Court.
"If execution will be allowed to proceed, the applicant (Tanesco)'s ability to generate, transmit and distribute the much needed electricity to the public will be adversely affected, causing a serious power crisis and damage to the Tanzanian economy," he stated.
According to him, the damages arising from the power crisis would be substantial and irreparable and not capable of being compensated by any award of damages. He stated that the amount involved in execution was colossal and may not be recovered from Dowans Companies if the appeal case succeeds.
But in their application, the two Dowans Companies, Dowans Holdings (Costa Rica) and Dowans Tanzania Limited, are asking the judges of the Appeals Court, the highest temple of justice in the country, to 'strike out' the Notice of Appeal filed on October 4, 2011, by Tanesco.
Advocate Fungamtama stated in his affidavit to support the application that when the judgment of the High Court was delivered on September 28, 2011, in accordance with the ICCA Award, a copy thereof was ready for collection on the same day, as it was already typed and signed by the judge.
He stated that on the same day a decree was extracted from the judgment, but since then "no action has been taken in lodging the appeal, subsequent to any other acts necessary to further progress of the intended appeal and more than 60 days have been passed since the decree was extracted."