The Commercial Division of the High Court in Dar es Salaam yesterday gave clearance to Tanzania Electric Supply Company (Tanesco) to contest the 94bn/- payment to Dowans Tanzania Limited in the Appeal Court.

Dowans Power Plant

Hearing of the objection to pay Dowans which was filed by Tanesco has been scheduled for April 18, this year.

Delivering the verdict on the application filed by the public utility firm, High Court Judge Dr Fauz Twaib said there were other legal processes to follow other than asking for a High Court permit to appeal against the International Chamber of Commerce (ICC) ruling over the 94bn/- compensation.

“There are other options to take against the ICC verdict made in 2011,” Judge Twaib said —in the wake of which many Tanzanians, including civil societies, politicians and even some cabinet ministers challenged the 94bn/- compensation to Dowans as unjustified and unfair.

However, the High Court Judge asked both parties in the case (Dowans and Tanesco) to pay the costs of the case immediately, failure of which they would be forced to do so.

Last year, the High Court ordered state power utility to pay the costs of running the case incurred by Dowans. It also ordered the firm to pay 94bn/- to Dowans Tanzania Limited, but Tanesco argued that the award to the power installing company would go against public interests.

Tanesco complained in its submission that the International Chamber of Commerce (ICC) arbitration was unfairly conducted, as the tribunal failed to consider part of the evidence they had submitted.

It also complained that there were misconducts on the part of the ICC tribunal in the arbitration, with a lot of legal facts missing, asking the High Court to dismiss the ICC ruling or set it aside.

However, early in 2011, Dowans’ lawyer, Kennedy Fungamtama, submitted that any attempt by the government to block the award would frustrate other would-be investors.

Tanesco contracted Richmond Company, which was later sold to Dowans, to produce 100MW of emergency power. However, the deal turned sour and was terminated.

The latter firm was aggrieved for what it termed a breach of contract and took the matter to the ICC tribunal, which ruled in its favour.

The Legal and Human Rights Centre’s (LHRC) petitioned against registration of the award by High Court, but the same was struck out by the court.

Later activists vowed to hold a peaceful demonstration to put pressure on the government not to pay Dowans Tanzania Limited as ordered by the International Chamber of Commerce (ICC) tribunal. In another move to thwart the payment of the award, last year, the High Court of Tanzania threw overboard a petition by the Tanzania Electric Supply Company (Tanesco) that sought to block the payment.

But Tanesco argued it would not afford to pay the compensation because if it did, its operations would be ‘severely affected’.

The Dowans saga has drawn much attention from the public, forcing various civil organisations and Tanesco workers to reject the payment and threaten to demonstrate.

By WARYOBA YANKAMI, The Guardian

Do you have a story or an article to publish? Please email us to submit@in2eastafrica.net.