Summary

Highlights

• The ICSID ad hoc Committee has rendered its decision on the Stay of Enforcement of the Award following the 11 October 2023 hearing
• Tanzania must provide a written undertaking from authorised government officials within 45 days binding Tanzania to the following undertakings to continue the stay of enforcement:
  • That Tanzania will abide by the final annulment decision when delivered by the ad hoc Committee
  • That Tanzania will recognise the Award and pay the full amount of the Award plus interest to the Claimants within 45 days of the final decision on annulment
  • That Tanzania will not subject the payment of the Award to any enforcement proceedings in domestic courts in any jurisdiction or to the scrutiny of Tanzanian courts
• If Tanzania fails to provide the written undertaking as outlined above within 45 days, the stay on enforcement will be lifted
• Indiana as the majority shareholder of the Claimants will now provide a guarantee that in the event the annulment request is granted in favour of Tanzania, it will enable the Claimants to reimburse Tanzania monies secured through enforcement corresponding to the annulled portion of the Award
• The total amount payable by Tanzania under the Award now stands at US$112.9 million to date plus costs of US$4.28 million
• Interest continues to accrue at the rate of approximately US$1 million per month

... a summary of the decision is below:

1. The Committee agreed to the continuation of the stay of enforcement of the Award on a provisional basis subject to the condition that Tanzania provides an undertaking to the effect that if or to the extent that Tanzania's request for annulment is not granted, Tanzania agrees and undertakes that:

a. it will recognize the Award as final and binding and will abide by and comply with the terms of the Award;

b. it will not subject payments to any enforcement proceedings or to the scrutiny of Tanzanian courts; and

c. it will unconditionally and irrevocably pay the full amount of the Award (including interest) to the Claimants within forty-five (45) days following the notification by the ICSID Secretariat of the Committee's Decision on annulment such that the Claimants will be fully compensated, including interest, and will not need to engage in any action to recognize, enforce, or execute the Award under Article 54 of the ICSID Convention in any ICSID Contracting State.

2. The Committee also ordered that Tanzania's undertaking to the Committee and the Claimants should be executed by a government official or officials of Tanzania with full power to bind the State, together with information sufficient to establish for the Committee and the Claimants the legal basis as a matter of Tanzanian law for the power to bind the State of the relevant official or officials to the undertaking.

3. If Tanzania fails to provide the undertaking outlined above within the stated time, the Committee has ordered that the stay of enforcement of the Award will be terminated and the Claimants will be able to commence enforcement:

a. if Indiana, as the majority shareholder of the Claimants, provides an undertaking that it will enable the Claimants to reimburse Tanzania if the Award is annulled; and

b. unless Tanzania provides the Claimants financial security in the form of either an unconditional and irrevocable bank guarantee or a funded escrow account with a reputable international bank with no principal establishment in Tanzania to the value of the full amount of the Award that is acceptable to the Claimants.

4. The Committee did not make a decision on costs at this stage of the proceeding.

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