The Commercial Division of the High Court has restrained Dowans from selling its turbines, following an application for court injunction filed by the Tanzania Electric Supply Company (TANESCO).
Dowans had advertised on November 3, this year an intention to sell their turbines but the High Court restrained them temporarily on Thursday, pending determination of complaints filed by Dowans at the Paris Chamber of Arbitration.
Tanesco Communications Manager Badra Masoud said yesterday in a statement that Dowans had filed its complaints with the Paris Chamber of Arbitration, claiming that the state run power utility firm had illegally terminated its contract with Dowans.
Masoud said Dowans had claimed that Tanesco had not paid Dowans the outstanding capacity charges as agreed in the contract.
Tanesco, represented by Rex Attorneys, filed an application with the Commercial Division of the High Court seeking the court injunction.
Masoud said they took the option because should Tanesco win the case, Dowans` property would be attached in case it failed to pay legal costs.
The government, working on the recommendations of House Committee on Energy and Minerals, had directed Tanesco to abandon negotiations on purchase of Dowans power generators as they were too old.
Minister of Energy and Minerals William Ngeleja said recently that Dowans` generators were able to operate continuously for 12 to 13 years but thereafter, the refurbishing would be quite expensive and take a long time.
The minister said the government would purchase similar plants directly from manufacturers, although the process could take time.
Dowans and Tanesco entered into the contract after Richmond Development Company LLC failed to generate 100MW of electricity as stipulated in the June 23, 2006 agreement, which was signed after power-generation dams ran dry following prolonged drought.
Revoking the contract some few months ago, Tanesco said its contract with Richmond had no legal mandate and its transfer from Redvo to Richmond, later on to Dowans Holding SA Limited and eventually to Dowans Tanzania Ltd., did not conform to the original terms and was therefore illegal.