After a Swedish company obtained a $165 million award against Tanzania owing to revoked land title in the Bagamoyo sugar plant, the Netherlands confiscated an Air Tanzania Company Limited plane.
The specific fleet aircraft owned by ATCL that have been taken into custody and why are yet unknown.
However, on Wednesday, the government allayed concerns that an ATCL plane may be impounded by a Dutch court when the Attorney General declared that everything was in order.
Dr. Eliezer Feleshi confirmed to The Citizen that despite the International Centre for Settlement of Investment Disputes (ICSID) having issued a stay of execution, pending further proceedings, a Swedish company that won a $165 million award against Tanzania had persuaded the court to uphold the attachment of the aircraft.
It is true that when we were successful in our appeal to the ICSID for a stay of execution, they went to court in the Netherlands.
“Everything is in order,” he assured.
Dr. Feleshi added that the government had already filed an appeal in response to the Dutch court’s ruling, but he declined to elaborate.
“I can’t disclose further details…let’s be patient as the matter is in court.”
Tanzania claims that the attachment is illegal since it was made a day after the State asked the ICSID to revoke EcoDevelopment’s award.
However, the judge argued that the ICSID’s temporary stay of execution only applied as of the day the organisation received the state’s request for annulment.
In the Dutch courts and the ICSID proceedings, the Swedish company is represented by the law firms Mannheimer Swartling and Houthoff.
Tanzania, on the other hand, used Buren Legal for the attachment cases but didn’t hire a third-party attorney for the arbitration or annulment cases.
EcoDevelopment, which is owned by 18 Swedish nationals, filed its ICSID claim in 2017 in accordance with the bilateral investment agreement between Sweden and Tanzania.
That followed the government’s unilateral decision to cancel the land title for a multibillion-dollar sugar project in Bagamoyo.
The case was started at the ICSID, a Washington-based World Bank organisation.
The Swedish company, which had spent more than 10 years developing the project and invested $52 million in a ready-to-go scheme for the local production of sugar, renewable electricity, and fuel, was dealt a serious blow by the land revocation.
The consortium consisting of EcoEnergy Africa AB of Sweden and Uttam Group of India was supposed to contribute $100 million as its own stock to the project.
The African Development Bank (AfDB) pledged to serve as the principal financial arranger for the remaining $250 million in funding, which would have been a combination of DFI and commercial bank credit. The AfDB board has previously decided to commit $100 million to the endeavour.
As a result of the government’s reluctance to endorse the Bagamoyo project and information that the land title had been cancelled, the AfDB later withdrew their financial commitment.
One of the greatest private agricultural investments in East Africa would have been made through the company’s planned integrated sugar project, which would have cost approximately $500 million total and included an outgrowers programme.
It was predicted that the Bagamoyo project would have produced 20,000 direct and indirect jobs in the outgrowers programme, estate, processing facility, and logistics.
Even though ICSID approved the investor’s request for legal remedy, the aggrieved party went one step further and convinced a Dutch court to support the attachment of an aeroplane that was grounded in the country because of engine issues.
In light of the government’s application to have EcoDevelopment’s award revoked the day before, Tanzania argued that the attachment was illegal.
In order to prevent EcoDevelopment from requesting any additional attachments based on the ICSID award while the annulment proceedings are ongoing, the government asked the Limburg court to lift the attachment.
The government has since maintained that the automatic stay given by ICSID had the effect of making the award ineligible for interim enforcement, making the attachment illegal, and that the Dutch courts were required to recognise the ICSID stay judgement as authoritative.
In addition, the government claimed that the attachment had unfairly hurt its interests and that, as a national government, it had enough assets both inside and outside of its borders to guarantee the payment of the award.
