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Tanesco suffers fresh setback in Dowans case |
Saturday, 02 June 2012 11:33 THE CITIZEN |
By Bernard James Dar es Salaam. Seven months after the rejection by the High Court of state-owned Tanescos petition to block an order requiring it to pay Dowans Tanzania Ltd $65 million (about Sh111 billion), the company may finally be forced release the money due to its failure to appeal within the time set by the law. Dowans has requested the Court of Appeal to strike out a notice of appeal that Tanesco filed in October last year, which was the only important legal ground to suspend the payment. The 60 days within which the public utility was legally allowed to file an appeal expired in December last year. Dowans now wants to capitalise on this lapse to have the matter brought to an end. The International Chamber of Commerce (ICC) in November last year made an award of $64.4 in favour of Dowans after it was satisfied that Tanesco unlawfully terminated an emergency power generating contract it entered with Dowans. In its application to the Court of Appeal, Dowans asks the court to strike out the notice of appeal by Tanesco, arguing that the power firm has failed to lodge the appeal within the prescribed time. No action has been taken in lodging the appeal or to follow up the matter, or take any other necessary steps to further the progress of the intended appeal, and more than 60 days have passed since the decision was pronounced, argues Dowans in it application. Now if the High Court will agree with Dowans, that will be a double blow for Tanesco which would automatically lose $30 million it deposited at the London based tribunal as security for costs as it struggles to block another application for execution of the ICC award. An initial attempt by Tanesco to block the ICC award from being registered by the High Court hit a snag when judge Emilian Mushi rejected the petition in September last year.Following the dismissal, Tanesco served the Court of Appeal with a formal notice that it would challenge the lower courts order to register the ICC award as enforceable decree of the court. Under Section 90 (1) of Tanzania Court of Appeal Rules, 2009, an appeal should be instituted within 60 days from the day a notice of appeal was lodged. Among other conditions, the appeal should also be lodged with memorandum of appeal, the record of appeal or security for the costs of the appeal. But Dowans, through its lawyer, Mr Kennedy Fungamtama, is insisting that the firm has failed to exercise due diligence in seeking to get a copy of the proceedings of the dismissed case. He argues that despite the fact that the court had already supplied them with copies of an extract of High Court proceedings, which covered substantial part of the case, Tanesco failed to get the rest of the document to enable it file its appeal.Earlier this year, Tanesco was ordered deposit $30 million so that a London court could suspend an order that it pays Dowans $65.8 million. The British commercial court then said it was not ready to postpone an application in which Dowans sought to enforce the award unless Tanesco lodged $25 million with the complainant as security. The order came after the power firm asked the court, for the second time, to postpone Dowans application to enforce the ICC award. The London court granted Tanesco an application for postponement of the matter on condition that it provides to Dowans $70.3 million (about Sh112 billion) as security, whose interest would be calculated as of May 6, 2011. On February 16, the London court agreed to Tanescos plea for a postponement on condition that the firm puts additional security of $25million in addition to the existing $5 million. The case springs from an ICC decision in November 2010 to award Dowans Holdings SA (Costa Rica) and Dowans Tanzania Ltd $65.8 million for wrongful termination of a power generation contract in 2008. Tanesco has since been fighting to have the decision set aside. The public power utility firm alleged that public procurement rules were grossly flawed in 2006 when the government directed Tanesco to award the contract to Richmond Development Company, which later passed on the contract to Dowans. According to Tanesco, the ICC deliberately disregarded evidence that the procurement of the power agreement was carried out in the absence of a valid tender after Tanescos tender board cancelled the initial award. |