INDEPENDENT Power Tanzania Limited (IPTL) and Pan African Power Solutions Tanzania Ltd (PAP) have challenged a verdict for payment of 168,800,063 US dollars (about 400bn/-) to two members of Standard Chartered Bank.
In their application before the High Court’s Commercial Division last week, the two firms request the court to set aside the Ex-Parte Order delivered on February 9, 2017 by Judge Barke Sehel of the High Court (Commercial Division) in Dar es Salaam.
Judge Sahel registered a Summary Judgment allegedly fraudulently obtained against IPTL, PAP and VIP Engineering and Marketing Limited by Standard Chartered Bank (Hong Kong) and its Malaysian affiliates in the High Court of Justice of England, Queen’s Bench Division, Commercial Court, on November 16, 2016.
The English Judge, Justice Flaux gave the judgment in favour of Standard Chartered Bank Hong Kong Limited and Standard Chartered Bank Malaysia Berhard, after the local companies had defaulted to submit to the jurisdiction of the London-based English Court. The Judgment is contested on a number of grounds.
The two applicants in the matter, canvases for declaration that the foreign judgment registered following ex-parte order given by Judge Sahel, is unregistrable and unenforceable in Tanzania.
They are further applying for an order invalidating the expert ruling by Judge Sahel, registering the English foreign judgment; and the order invalidating and vacating the registration of the foreign judgment in question.
The Company Secretary and Chief Legal Counsel for the two companies, Mr Joseph Makandege, has advanced several grounds to support the application, one being that the foreign judgment was obtained fraudulently.
According to Mr Makandege, Standard Chartered Bank Hong Kong Limited masqueraded as a secured creditor of IPTL and assignee of the Power Purchase Agreement (PPA) receivables, fraudulently commencing and obtaining the judgment.
The advocate stated that enforcement of the judgment would circumvent, supersede and abrogate the ongoing court proceedings in Tanzania, including but not limited to Civil Case No. 229 of 2013 and Civil Case No. 60 of 2014, in which the applicants question the bank’s locus stand in litigating in the English proceedings.
Alternatively, the advocate stated, the judgment was inadvertently registered in contravention of the provisions of the Act as there was no proof of all matters prescribed in the Act and in the Civil Procedure Code Act, which ought to have been mandatorily proved before the Judgment could be registered in the country.
In his IPTL/PAP joint application affidavit, Mr Makandege explained that the English Courts had no jurisdiction over the dispute. According to him, the judgment was whimsical, excessive and abusive of the competence of the English Court as it was sought and obtained by the banks without locus standi and issued by the court without competence or jurisdiction.
He said that the judgment, on the face of the English proceedings appears founded on an incorrect view of international law in that it disrespects the comity doctrine of states, requiring courts of one state to apply foreign law or limit domestic jurisdiction out of respect for foreign sovereignty.
He stated that the English court committed jurisdictional error trying, determining and granting a claim for recovery of a right that was never vested and is not vested in Standard Chartered Bank Hong Kong Limited. The advocate concluded that the judgment is already a subject of final and conclusive judgment by the court having jurisdiction in the matter.
He states that the recovery of which the bank is already enforcing vide Miscellaneous Civil Application No. 687 of 2016, the hearing of which is pending before the High Court (District Registry) at Dar es Salaam before Judge Ama Munisi.
On February 9, this year, Judge Sahel gave 21 days the IPTL, PAP and VIP Company to challenge the enforcement of foreign judgment after allowing an exparte application by the two banks. The judgment sought to be enforced is a summary judgment.
It is a summary judgment because IPTL, PAP and VIP Engineering and Marketing Limited had not submitted to the jurisdiction of the English Court; hence had neither entered appearance nor submitted their written statements of defence to the claims by the two foreign banks before the English proceedings.
The three local companies have been contesting the jurisdiction of the English Court to hear the matter because the IPTL plant and all other assets are in Tanzania and the course of action relating to the matter originated from the East African nation, to mention but one ground.
They had been contending further that there were two other cases that were filed before the High Court of Tanzania prior to the English proceedings, in which one of the central issues involved is whether Standard Chartered Bank is a legitimate creditor of IPTL.
However, the London court ignored such facts and dismissed the contentions by the local companies, hence proceeding in favour of the banks without hearing both parties on merits, in breach of the comity of states and principles of state sovereignty and its corresponding reciprocity.
One of the cases was filed by IPTL and PAP for payments of over 6tr/- and that of VIP seeking payments of over 1tr/-.