BECCO, JV AC-EE legal battle takes new twist
THE Bharya Engineering and Contracting Company Ltd (BECCO) has filled petition at the High Court’s Commercial Division to challenge additional award given by the Tanzania Institute of Arbitrators (TIArb) to the Joint Venture of the Arab Contractors and Elsewedy Electric (Joint Venture AC-EE).
The additional award orders the BECCO to pay 849.76m/- to the JV AC-EE as liquidated damages upon breaching the subcontract agreement.
In its application submitted to the court on Monday, this week, the BECCO seeks the setting aside of an additional arbitral award issued by Sole Arbitrator Eng Dr Kumbwaeli Salewi of the TIAarb.
The JVACEE had subcontracted the BECCO to construct a 77-kilometre road from Kibiti to the construction site of the Julius Nyerere Hydropower Project (JNHP).
The two parties, BECCO and Joint Venture AC-EE, were being mediated at the TIAarb following contractual dispute arose over two years ago regarding the subcontract they entered for upgrading and rehabilitation of the 64-kilometre road from Kibiti to Julius Nyerere Hydropower Project (JNHPP) at a cost of 8.19bn/-.
However, the two parties have since November 2020 entered into a pay dispute after the JVACEE claimed that the work was underperformed.
The attempts to resolve the dispute were made at several levels including the district and regional authorities, court and lately the arbitration.
On October 11, the TIAarb ruled that the JVACEE should pay the subcontractor, BECCO, a total of 587.9m/- (255,638 US dollars) for the work it performed.
But, the JV AC-EE, later on November 9 submitted a letter to the TIAarb demanding liquidated damages from the BECCO amounting to 849.76m/-.
Following its application, Sole Arbitrator Dr Salewi made an additional award, arguing that it was true that previously the arbitrator in its initial award did not consider the issue of liquidated damages as submitted by the respondent (JV AC-EE) in its statement of defense and counterclaim.
“The claimant in this matter (BECCO Ltd) breached the subcontract agreement, and accordingly has to pay for the liquidated damages amounting to 849.76m/-.
However, the BECCO, through the Victory Attorneys and Consultants, submitted the petition to the High Court’s Commercial Division to challenge the decision.
The application seeks the High Court to issue an order to the effect that the additional award was made on the merits to be of no effect in whole on the grounds that the Arbitral Tribunal no longer had the substantive jurisdiction over the matter.
The plea further seeks court order to set aside the additional award made by the Arbitral Tribunal on the ground of serious procedural irregularity and bias in the issuance of the additional award.
