Tanzania ordered to pay StanChart Sh18.5 billion

Tanzania has been ordered by a World Bank arbitration court to pay $185 million (Sh18.5 billion) to the Hong Kong subsidiary of Standard Chartered (StanChart) for breaching an energy contract.

The court’s ruling, which was released on Tuesday, adds to pressure on the East African nation, which faces at least two other multi-million claims from international investors.

The case stems from a legal battle between the Tanzanian government and privately-owned independent power producer IPTL, which led to the dismissal of several cabinet ministers in 2014.

The award by the World Bank’s International Centre for Settlement of Investment Disputes is less than the $352.5 million (Sh35.2 billion) sought by Standard Chartered Bank Hong Kong, which was not immediately available for comment.

SEE ALSO :Coach Kimanzi lashes out at Cecafa officials

The Government of Tanzania denied any responsibility and said it was not planning to pay the damages.

“Neither the government nor (state power company) TANESCO have a legal liability in these cases,” Tanzania government spokesman Hassan Abbasi said on Twitter yesterday.

Tanzania’s attorney general Adelardus Kilangi said IPTL, not the government, would have to pay Standard Chartered.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.  

“When the award says that the Tanzanian government should pay Standard Chartered Bank, the actual meaning is that the government should supervise IPTL to make the payment,” he told Reuters.

IPTL did not immediately respond to requests for comment.

SEE ALSO :Dar secures $272m AfDB loan for new airport

Tanzania faces at least two other cases at the World Bank tribunal. US firm Symbion Power said in 2017 it was seeking $561 million from Tanesco at the Paris-based International Chamber of Commerce’s International Court of Arbitration for breach of contract.

Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.

Get the latest summary of news in your email every morning. Subscribe below

* indicates required
TanzaniaStanChartWorld Bank