TANZANIA: HIGH COURT CAN STOP IPTL CASE GOING TO ICJ

THE government will not be taken to the International Court of Justice (ICJ) if the High Court will invalidate a decision calling for recalculation of tariffs paid to Independent Power Tanzania Limited (IPTL).

This was said at the High Court in Dar es Salaam by advocate Joseph Makandege, for IPTL and Pan African Power Solution Limited (PAP), in his rejoinder submission to support an application for injunction, pending hearing and determination of a main case for 5.3tr/- claims.

The decision at hand was issued by the International Centre for Settlement of Investment Disputes (ICSID) early this year, requiring Tanzania Electric Supply Company (Tanesco) to sit with Standard Chartered Bank (Hong Kong) Limited (SCBH) to recalculate IPTL power tariffs.

Mr Makandege was reacting to submissions presented earlier by British lawyer Charles Morison, for the bank, who had forcefully claimed that Tanzania risks being proceeded against in the ICJ if the High Court would grant orders aimed at stopping enforcement of ICSID decision.

"It follows, therefore, that the threat by Mr Morison that Tanzania will be proceeded against in the International Court of Justice if this court eventually grants the orders sought by the applicants which is legally unwarranted," he told Judge Dr Fauz Twaib.

He added, "The submissions are so spurious to be made by a senior counsel of the calibre of Mr Morison." Mr Makandege stressed that the enforcement of the ICISD award was subject to conformity with the laws of the land, in particular the Arbitration Act and Civil Procedure Code.

According to Mr Makandege, under the doctrine of separation of powers as stipulated in the country's constitution, it is only the High Court, as opposed to the government, that has powers to determine on enforceability of an award in the country.

He told the court that there was a marked difference between Tanzania's constitution and that of Britain where Mr Morison practices, where there was no written constitution and where the Washington Convention forms part of the UK Constitution.

"This is not the case in our jurisdiction. In our jurisdiction, where an international treaty of which the Washington Convention is part, once domesticated, becomes part of the statute of the country as opposed to the constitution," he said.

He added, "Being part of the statute the convention does not override our constitution and has therefore to be interpreted in conformity with the constitution and not at variance to the constitution."

In the main case, the applicants are seeking for payments of 3,240,000,000 US dollars (about 5.3tr/-) for allegedly fraud and for declaration orders that the bank and Ms Martha Renju are not a creditor and administrator receiver of IPTL, respectively.

It is alleged in the plaint of the suit that the misrepresentations by SCBH and Ms Renju have caused abortion of transactions by the plaintiffs, notably its ambitious mission of converting the power plant at Tegeta from using heavy fuel (HoF) fired to duo heavy fuel and gas fired.

"Wartsila, to mention but one, declined the conversion of the plant from HoF fired to duo HoF and gas-fired and its expansion from 100MW to 500MW, doubting whether the plaintiffs were the rightful entities to deal with it," reads one paragraph in the plaint of the suit.

As a result, the plaintiffs alleged, they have not undertaken the conversion and expansion to date, causing enormous business and financial losses.

Under the Purchase Power Agreement (PPA), the plaintiffs were entitled to payment by Tanesco of 2.6 million US dollars monthly.

Such amount, according to the plaintiffs, is for supply of 100MW of electricity only and by expanding the plant generation capacity to 500MW, the amount payable would increase to 23 million US dollars per month being capacity charges to which they would be entitled.

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