11 February 2013

Tanzania: Tanesco, Dowans Battle Heads to Court of Appeal

Photo: Chris Kirchhoff
Electricity pylons.

Dar es Salaam, Tanzania — The legal battle between the Tanzania Electric Supply Company Limited (TANESCO) and the Dowans Holdings (Costa Rica),is headed for Tanzania's Court of Appeal.

A panel of judges of the Court consisting Justice Edward Rutakangwa, Justice Dr. Steven Bwana and Justice Bernard Luanda, is set to hear the parties regarding execution of arbitration award the International Chamber of Commerce (ICC) amounting $65.8m plus annual interest of 7% with effect from Nov 15, 2010.

The state owned power utility is challenging the ICC's award of $65.8m with annual interests of 7% under ICC arbitration case no. 15947/VRO.

However, a team of counsel for Tanesco comprising Richard Rweyongeza, Prof. Florens Luoga, and Prof. Palamaganda Kabudi, is expected to jointly move the court for orders to stop payment to Dowans pending the determination of the intended appeal to the Court of Appeal of Tanzania.

"The amount involved in the process is $65.8m which is a colossal sum and the same may not be recovered from the respondents, should the appeal succeed thus resulting in economic loss to the applicant," the said team of counsel asserted in their application also served to the counsel for the Dowans, Kennedy Fungamtama.

The team of lawyers for Tanesco, they also asserted that the state power utility has so far filed a notice of appeal with intention of challenging the judgment of Judge Emillian Mushi of the High Court of Tanzania, despite of the Dowans having already taken steps to execute the decree at the High Court of Justice Queen's Bench Commercial Division, Royal Court of Justice in London, United Kingdom.

"The applicant 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", they maintained in support of their application to stay the execution of the decree issued by Judge Mushi.

However, Fungamtama for the Dowans has further encountered them by lodging two applications, the first one being a preliminary of objection for the intended appeal being time barred and another being an application for enforcement of the ICC Arbitral Award dated Nov 15, 2010.

Accordingly, the Chief Legal Counsel of Tanesco, Godwin Ngwilimi, his affidavit that the partie's arbitration before the ICC over the principal sum of $65m but the public power utility was dissatisfied with its verdict to the extent of challenging it before Judge Mushi up to 28th September, when he dismissed their petition with costs.

He 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 serious power crisis and damages to the Tanzania.

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