Air Tanzania plane seized in the Netherlands released, returns home

Air Tanzania plane seized in the Netherlands released, returns home

The Citizen | 9th July 2023

By Janeth Mushi

Air Tanzania Company Limited (ATCL) plane that was seized in the Netherlands after a Swedish firm won a $165 million award against Tanzania has been released, says the government.

The aircraft was confiscated due to revocation of land title in the Bagamoyo sugar project. However, the Attorney General (AG), Dr Eliezer Feleshi said in December last year that everything was under control, dispelling fears of possible attachment of an ATCL plane by a Dutch Court.

Yesterday, the chief government spokesperson, Mr Gerson Msigwa said the plane has finally been released and returned home on Thursday, July 6. Mr Msigwa was speaking on Saturday, July 8, in Arusha ahead of the international anti-graft meeting gathering different stakeholders from the continent commencing on July 9.

“Today, I have good news that following a pending case at the Dutch Court, one of our planes was seized. Fortunately, the plane has returned home after a successful discussion between the two sides,” he said. He said the plane, Airbus 220, is currently being prepared for resumption of flights to different destinations, noting that it was good news for ATCL.

“The newly received cargo plane has started flying to Dubai and the US. Three other planes are set to arrive at the end of the year,” he said. “The government views ATCL as a strategic corporation. Controller and Auditor General (CAG) reports show that we are making good progress as we are determined to improve further,” he added.

According to him, the corporation was considered dead, but currently the government has made strides in reviving the national carrier which is now being improved to make it a powerful organization.

The aircraft seizure came after a Swedish firm that won a $165 million award against Tanzania had persuaded the court to uphold the attachment of the plane despite the International Centre for Settlement of Investment Disputes (ICSID) having issued a stay of execution, pending annulment proceedings.

“Tanzania has argued that the attachment is unlawful because it was obtained a day after the State had petitioned the ICSID to annul EcoDevelopment’s award,” Dr Feleshi was quoted as saying. But the judge reasoned that the ICSID’s provisional stay of execution of the award only took effect on the date the institution registered the state’s annulment request.

The Swedish company is using the legal firm Houthoff in the Dutch courts, and Mannheimer Swartling in the ICSID proceedings. Tanzania on the other hand has turned to Buren Legal for the attachment proceedings, but has not appointed an external counsel in the arbitration or annulment proceedings.

EcoDevelopment, which is owned by 18 Swedish nationals, brought its ICSID claim in 2017 under the Sweden-Tanzania bilateral investment treaty. That came after the government decided to unilaterally revoke the land title for a multi-billion sugar project in Bagamoyo.

The case commenced at the ICSID, a World Bank organ based in Washington. The land revocation was a major blow to the Swedish company, which had for over ten years worked to develop the project and invested $52 million in a ready-to-go project for local production of sugar, renewable electricity, and fuel.

The consortium of EcoEnergy Africa AB of Sweden and Uttam Group of India was to inject $100 million into the project as its own equity. The remaining funding $250 million would have been a combination of DFI and commercial bank lending, where a commitment was given by the African Development Bank (AfDB) to act as a lead financing arranger. The AfDB board had already made a decision to allocate $100 million towards the project.

source: The Citizen