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.

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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.

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“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.

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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.

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