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Tanzania commits to pay Indiana Resources $118 million if ...

The Citizen | 28 December 2023

Tanzania commits to pay Indiana Resources $118 million if ...

Dar es Salaam. Tanzania has made a commitment to pay Australian mining firm Indiana Resources Limited and its subsidiaries $118 million if the country loses in the final decision of the annulment application.
The commitment marks a major step towards resolving a long-standing dispute over the expropriation of the Ntaka Hills nickel mine.

Indiana Resources said in a statement, on Wednesday, December 27, that as part of a recent agreement, Tanzania’s Attorney General has provided a letter assuring the International Centre for Settlement of Investment Disputes (ICSID) ad hoc committee and the claimants that should the annulment request be unsuccessful, the country would pay within 45 days.

The company also said that the two parties agreed that Tanzania would recognise the award as final and binding and comply with its terms, not subject payments to any enforcement proceedings or Tanzanian court scrutiny.

It added that Tanzania would “unconditionally pay the full award amount (including interest) to the claimants within 45 days of the final decision”.

Commenting on the development, Indiana’s executive chairman, Bronwyn Barnes, stated: "This is a tremendous outcome for the claimants and brings us a considerable step closer to recovering the full amount owed. We look forward to providing further updates as this matter progresses in the New Year."
Tanzania’s Solicitor General, Dr Boniphace Luhende, told The Citizen that no payment has been made or guarantee issued to Indiana Resources at this stage.

“The undertaking provided is solely a procedural requirement to ensure the legal process can proceed while the ‘Annulment Application’ is under consideration,” he said.

Dr Luhende explained that whereas an undertaking was provided, it is solely contingent upon the outcome of Tanzania’s application for ‘Annulment’ filed with the International Centre for Settlement of Investment Disputes (ICSID) on July 25, 2023.

“Tanzania, aggrieved by the ICSID Tribunal’s Award, exercised its legal right to appeal through the Application for Annulment. In the interim, a ‘Stay of Enforcement’ was granted by ICSID, requiring Tanzania to provide an undertaking to comply with the Award if the annulment request is unsuccessful,” he said.

Following the ruling, both parties will adhere to the established hearing schedule, with six weeks allocated for each party’s submissions, followed by four weeks for replies and rejoinders, and three weeks for finalising the hearing date.

According to the ICSID, some of the conditions that could justify annulment of an award include the Tribunal not being properly constituted, the Tribunal manifestly exceeding its powers and corruption on the part of a member of the Tribunal.

Other grounds include serious departure from a fundamental rule of procedure, or when the award has failed to state the reasons on which it is based.

In another development, The Citizen has learnt that the timetable for the annulment process remains on track to be completed by mid-2024.

However, this could have an effect as the final amount could rise to $124 million due interest that will begin to accrue at a monthly rate of $1 million the full amount is paid to the claimants with effect from January 2024.

The dispute at hand stemmed from the Tanzanian government’s decision in 2015 to revoke the mining licenses of Indiana’s subsidiaries, Nachingwea Nickel Ltd (NNL) and Nachingwea UK Ltd (NUKL).
Indiana, as the majority shareholder in these companies, subsequently filed a claim against Tanzania at the International Centre for Settlement of Investment Disputes (ICSID), a division of the World Bank.
The ICSID tribunal ruled in favor of Indiana, awarding the company $114 million in compensation plus interest. However, Tanzania challenged the award and sought its annulment.

 source: The Citizen