Dar es Salaam. Tanzania Electric Supply Company (Tanesco) must pay Dowans the $65 million (Sh110 billion at yesterday’s exchange rate) awarded by an international tribunal for breach of contract, the High Court ruled yesterday.Mr Justice Emilian Mushi said it would be improper for the court to interfere with the findings of the International Chamber of Commerce (ICC), which he added, addressed the issue adequately.“…this petition is hereby dismissed with costs. It is hereby ordered that the ICC’s final award filed in this court, be formally registered and should be a decree of this court and enforceable as such,” he said.
Commenting immediately after the ruling, the chairman of the parliamentary Public Organisation Accounts Committee, Mr Zitto Kabwe blamed the ruling CCM for Tanesco’s plight.“This is the cost of ill-advised politics and blind patriotism. We have caused this huge loss to the country due to poor leadership and infighting within CCM,” he told The Citizen.But Mr Kabwe said Tanesco was not supposed to pay the compensation as the firm was pressured into terminating the contract.
He said the committee had already directed that the debt should be paid by the government.
“Even the Controller and Auditor General has refused to sign Tanesco accounts for 2010 until the government agrees to shoulder the debt,” he added. The decision means Tanesco has to remit $65 million plus an interest of 7 per cent per annum, which could amount to about Sh118 billion.
Two weeks ago, Mr Justice Mushi dismissed a similar petition by four human rights activists, who challenged validity of the ICC order, arguing it was against the public interest.In his 89-page verdict he read for nearly three hours yesterday, Mr Justice Mushi said it would not be proper to interfere with ICC findings, saying doing so would amount to re-opening and re-arguing on the issues of fact and law that Tanesco and Dowans had agreed to submit to ICC for consideration and decision.
ICC had in November last year awarded Dowans Holdings SA (Costa Rica) and Dowans Tanzania Limited $65.8 million for wrongful termination of a power generation contract in 2008.Tanesco was asking the court to set aside the award or remit it to ICC for reconsideration for, among other reasons, being against public policy and disregarding its evidence at the hearing.The public utility alleged that public procurement rules were grossly flawed 2006 when the government directed Tanesco to award the contract to Richmond Development Company (RDVECO), which later passed the contract to Dowans.
Tanesco argued that the tribunal did not consider its evidence that Richmond lacked capacity to honour the contract. It also dissatisfied with what it described as ‘erroneous interpretation of the Public Procurement Act, 2004’ by the tribunal.
Commenting immediately after the ruling, the chairman of the parliamentary Public Organisation Accounts Committee, Mr Zitto Kabwe blamed the ruling CCM for Tanesco’s plight.“This is the cost of ill-advised politics and blind patriotism. We have caused this huge loss to the country due to poor leadership and infighting within CCM,” he told The Citizen.But Mr Kabwe said Tanesco was not supposed to pay the compensation as the firm was pressured into terminating the contract.
He said the committee had already directed that the debt should be paid by the government.
“Even the Controller and Auditor General has refused to sign Tanesco accounts for 2010 until the government agrees to shoulder the debt,” he added. The decision means Tanesco has to remit $65 million plus an interest of 7 per cent per annum, which could amount to about Sh118 billion.
Two weeks ago, Mr Justice Mushi dismissed a similar petition by four human rights activists, who challenged validity of the ICC order, arguing it was against the public interest.In his 89-page verdict he read for nearly three hours yesterday, Mr Justice Mushi said it would not be proper to interfere with ICC findings, saying doing so would amount to re-opening and re-arguing on the issues of fact and law that Tanesco and Dowans had agreed to submit to ICC for consideration and decision.
ICC had in November last year awarded Dowans Holdings SA (Costa Rica) and Dowans Tanzania Limited $65.8 million for wrongful termination of a power generation contract in 2008.Tanesco was asking the court to set aside the award or remit it to ICC for reconsideration for, among other reasons, being against public policy and disregarding its evidence at the hearing.The public utility alleged that public procurement rules were grossly flawed 2006 when the government directed Tanesco to award the contract to Richmond Development Company (RDVECO), which later passed the contract to Dowans.
Tanesco argued that the tribunal did not consider its evidence that Richmond lacked capacity to honour the contract. It also dissatisfied with what it described as ‘erroneous interpretation of the Public Procurement Act, 2004’ by the tribunal.
According to Tanesco, ICC deliberately disregarded the evidence that the procurement of the power agreement was done without a valid tender after Tanesco’s tender board cancelled the initial tender award.
The petitioner also argued that the enforcement of the ICC final award was contrary to public policy
But yesterday, Mr Justice Mushi said he was satisfied that all the questions of fact and law decided by the tribunal were those which the parties specifically asked the tribunal to decide on and were rightly decided.He said the court could not allow the petitioner to challenge the matter of facts and law that were directly asked by parties to be determined by the arbitration tribunal.
Outside the court, a lawyer who represented Dowans, Mr Kennedy Fungamtama, said his clients were still willing to sit with the government to negotiate the payment. One of the lawyers who represented Tanesco at ICC and in the petition, Dr Hawa Sinare, said he would advice Tanesco to appeal against the decision. “This is a kind of case that has to go to the Court of Appeal. We are shocked on how the judge addressed the issues of public policy and erroneous application of laws,” visibly upset Dr Sinare said.
Before Tanesco and rights organisations rushed to challenge the award, the Attorney General, Mr Frederick Werema had cautioned that Tanzania could not avoid paying Dowans for wrongful termination of the contract.
He said during the swearing in ceremony of Chief Justice Mohamed Othman Chande that it was wrong to give people false hope of opting for an appeal, adding that “any attempt to use public resources in pursuing the matter further was likely to be a waste of taxpayers’ money.”At the hearing of the petition, Tanesco blamed the arbitrator of failing to address it overwhelming evidence that proved how the power contract was improperly procured.
The petitioner also argued that the enforcement of the ICC final award was contrary to public policy
But yesterday, Mr Justice Mushi said he was satisfied that all the questions of fact and law decided by the tribunal were those which the parties specifically asked the tribunal to decide on and were rightly decided.He said the court could not allow the petitioner to challenge the matter of facts and law that were directly asked by parties to be determined by the arbitration tribunal.
Outside the court, a lawyer who represented Dowans, Mr Kennedy Fungamtama, said his clients were still willing to sit with the government to negotiate the payment. One of the lawyers who represented Tanesco at ICC and in the petition, Dr Hawa Sinare, said he would advice Tanesco to appeal against the decision. “This is a kind of case that has to go to the Court of Appeal. We are shocked on how the judge addressed the issues of public policy and erroneous application of laws,” visibly upset Dr Sinare said.
Before Tanesco and rights organisations rushed to challenge the award, the Attorney General, Mr Frederick Werema had cautioned that Tanzania could not avoid paying Dowans for wrongful termination of the contract.
He said during the swearing in ceremony of Chief Justice Mohamed Othman Chande that it was wrong to give people false hope of opting for an appeal, adding that “any attempt to use public resources in pursuing the matter further was likely to be a waste of taxpayers’ money.”At the hearing of the petition, Tanesco blamed the arbitrator of failing to address it overwhelming evidence that proved how the power contract was improperly procured.
Source The Citizen
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