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DAWASA triumphs against City Water
2006-07-19 09:58:32
By Judica Tarimo
City Water Services Ltd (CWS) has abandoned a case at the International Arbitration Tribunal, where it has been contesting Government of Tanzania’s decision to terminate its contract and enlisting the services of Dar es Salaam Water and Sewerage Company (DAWASCO).
The legal tussle between CWS and Dar es Salaam Water and Sewerage Authority (DAWASA) was triggered off last year, when the government terminated the service of City Water to manage water supply and sewerage services in the city of Dar es Salaam and Coast regions.
’’This is a technical knock out, they (City Water Services) have run away from the case. They have no basic claims against DAWASA’’ said Nimrod Mkono, Managing Partner of Mkono and Co, a legal firm commissioned to represent DAWASA at the international arbitration.
The 10-year contract between the foreign firm on behalf of the UK based Biwater-Gulf International and DAWASA on behalf of the government, was sealed in August 2003. Two years later, - June, 2005 - the government unilaterally terminated the contract.
Prime Minister, Edward Lowassa who was then Minister for Water and Livestock Development said the decision was made because CWS had failed to meet revenue collection targets and other performance conditions as spelt out in the contract.
City Water Services is incorporated by Biwater-Gulf-Tanzania of United Kingdom (51 per cent) and SuperDoll Triler Manufacture Tanzania Ltd (49 per cent).
City Water Services then expeditiously filed a request for arbitration at the United Nations Commission on International Trade Law (UNCITRAL) on May 16, 2005, challenging the legality of the decision and demanding compensation.
The firm contended that the termination was illegal and demanded compensation of between US$ 20m and US$ 24m for breach of contract.
Both CWS through London-based Allen & Overy Advocate Company and DAWASA through Mkono & Advocates, picked independent arbitrators – Julian Lew and Michael Lee –both from UK, as required by international laws, to represent them at the tribunal (UNCITRAL).
However, before proceedings began, CWS filed an injunction at the British High Court Justice seeking an order to restrain Tanzanian government from taking over its bond deposit of US$ 5.2m at the CRDB-Bank and block implementation of the terminated contract.
The application was granted on May 23, 2005 by the UK High Court of Justice. However, the Tanzania High Court declined to enforce the order, saying it was inapplicable locally.
Mkono Advocates contested the order at the UK High Court of Justice and had the injunction lifted on June 8, this year.
After the lifting, CWS continued with proceedings at UNCITRAL. William Laurence Graig as an independent arbitrator chaired the proceedings at the tribunal.
The Guardian has impeccably established that last month, William Laurence Graig directed CWS, Julian Lew, to file its statement of claim and supporting documents within 30 days, elapsing July 14, 2006.
Julian Lew acknowledged receipt of the directive from the chairman, but failed to comply as required.
This therefore has effectively left CWS out of contention as they have failed to comply with the requirements at the international tribunal.
’’That is why I am saying this is a technical knock out. That means CWS have no legitimate claim against DAWASA or the government,’’ said Nimrod Mkono.
In what was viewed as abandoning the case in despair, CWS Attorney Julian Lew wrote to the tribunal saying: ’’It is with regret that we notify the tribunal that we are no longer able to represent City Water Services in this arbitration.’’
The latest development, according to Nimrod Mkono, paves the way for DAWASA to file its counterclaim, demanding compensation from City Water Services.
’’The City Water Services, US$ 5.2m/-, which was deposited at the CRDB as a bond, becomes ours automatically. We will demand between US$ 20m and US$ 24m, as compensation,’’ said Mkono.
’’Of course, there would be some other costs. We are still compiling and quantifying the cost of the suit. We will announce the exact figures later on,’’ he said.
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