TANZANIA: THE High Court’s Commercial Division has ordered Yapi Merkezi Insaat Ve Sanayi to pay Puma Energy Tanzania Limited about 30bn/- as balance after supplying petroleum products during construction of Standard Gauge Railway line.
Judge Deo Nangela made the ruling after granting an application for leave to Puma Energy Tanzania Limited, the Petitioner, to enforce the Final Settlement Award as a judgement of the court against the construction company, the respondent.
“The respondent shall pay the Claimant (Petitioner) the remaining balance of the debt in instalments and to be included in every instalment towards Debt Settlement a corresponding amount for future supply of the services,” he ruled.
Judge Nangela ruled further that the respondent shall pay the instalments in US dollars or the equivalent in Tanzanian Shillings at the prevailing exchange rate as provided in the commercial banks.
“The amount shall be deposited into the Claimant’s Bank Account and the Respondent shall pay with respect to any late payment a yearly interest of Secure Overnight Financing Rate (SOFR) +4.5% on the overdue amount. It is so ordered,” the judge declared.
The Petitioner, through Advocate Gasper Nyika, had moved for enforcement of the award, reached upon consent of both parties, under Section 73(1) and (2) of the Arbitration Act, 2020 and Regulation 63 (1) (a), (b), (c), (d) and (e) of the Arbitration (Rules of Procedure) Regulations, 2021.
Mr. Nyika submitted that the parties agreed a final settlement award be filed in court and urged the court to grant the prayers, a position which was not objected to by the Respondent, through their Advocate Mr. Humphrey Aloyce.
In his ruling delivered recently, the judge pointed out that after considering the submissions and paragraphs of the petition, he entered the judgment and decree in terms of the award in question.
It is on record that between the years 2017 and 2022 the parties entered into three agreements for the supply of petroleum products, storage, and services.
At the time, the respondent had been contracted by the Tanzania Railways Corporation (TRC)to construct the Standard Gauge Railway line from Dar-es-Salaam to Morogoro and from Morogoro to Makutopora and Makutopora Tabora.
According to the parties’ agreement, any dispute in relation to the three agreements was to be resolved by reference to arbitration.
The Respondent breached the agreements by failing to pay for the services rendered, a fact which triggered the arbitration clause and the Petitioner commenced arbitration proceedings claiming for US$ 13,703,003.96.
Following the commencement of the arbitral proceedings, parties engaged in various discussions and consultations with a view to reach an amicable settlement.
On September 19, 2023, the parties executed a Deed of Settlement wherein they agreed that the Respondent shall pay the remaining balance ascertained to be in the amount of US$ 12,425.278.00 and will continue purchasing services from the Petitioner on a cash basis.
In their Deed of Settlement, they also agreed to appoint Dr. Wilbert Kapinga, a Sole Arbitrator with powers to arbitrate the dispute and issue a Final Settlement Award.
On September 22, 2023, the parties appeared before the Sole Arbitrator for a preliminary meeting and on September 25, 2023, the Sole Arbitrator issued a Final Settlement Award.