An Air Tanzania A220 (Photo: Airbus)
An Air Tanzania aircraft was seized in the Netherlands on Thursday, December 2, in accordance with a Swedish firm’s tribunal plea.
The arresting party – a private Swedish legal entity – claims that the jurisdiction Tanzania must pay $165 million in damages, over the African country’s move to revoke a land title in 2016 in the multibillion-dollar sugar project in Bagamoyo.
The contended aircraft is an Airbus A220-300 aircraft which is operated by Air Tanzania Company Limited (ATCL), doing business as Air Tanzania. The project in Bagamoyo was for the construction of a bioelectricity plant to switch between sugar and ethanol production based on market demand.
However, in June 2016, the Tanzanian government ruled that the approval of the land transfer to the energy company was made regardless of a warning that the land belonged to the Saadani National Park, and was thus protected.
The revocation of the land was a significant blow for the Swedish company, which had been working on the project for over ten years and had invested $52 million. The claimant alleges that Tanzania has not fulfilled its contractual obligations. As a result, the Swedish company successfully applied to the Dutch court for permission to seize the aircraft.
According to sources, the acquisition of the quite recently acquired aircraft has not been financed or leased. In the meantime, it has been suggested that Tanzania already appealed against the permission to conservatory arrest the aircraft in the Netherlands.
Tanzanian Attorney General Eliezer Feleshi confirmed the aircraft seizure, calling it unlawful. “It’s true that they went to court in the Netherlands after we had successfully appealed to the ICSID for a stay of execution. Everything is under control,” he said to The Citizen.
Feleshi pointed out that it was conducted a day after the International Center for Settlement of Investment Disputes (ICSID) – an organization that falls under the umbrella of the World Bank Group – issued a stay of execution order. He also stated that the African country’s government has already filed an appeal against the Dutch court’s decision, arguing that it has enough assets to pay the money compensation instead, but declined to offer further details.
The ICSID is an international arbitration institution for legal disputes and conciliation between international investors and States. Tanzania had requested the ICSID to issue a stay of execution in a pending further proceedings.
The question arises whether the recent precautionary arrest of the aircraft, which is registered as to nationality in Tanzania, is valid pursuant to international and local laws.
The Dutch court’s judge commented on the decision, arguing that the ICSID’s provisional stay of the compensation execution only took effect on the date the institution registered the state’s annulment request.
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