The International Centre for Investment Disputes Settlement (ICSID) has extended the suspension of the proceeding between Brian Malcolm Thomson, the British real estate developer and Mauritian Pennyroyal Limited against the government of Tanzania until next year.

This is the second suspension of the proceeding, which under the Irish presiding arbitrator Michael Collins, since the matter was registered at the ICSID on July 20th last year.

According to the details available at the ICSID website, the first suspension was made on April 29th this year to July 16th, pursuant to parties’ agreement.

The development notes of the case No. ARB/23/26 reads; “the suspension of the proceeding is extended until January 12, 2025, pursuant to the parties’ agreement”.

Since July last year when the case was registered, the tribunal held its first session by Video conference on December 14th, 2023, before February 15th, 2024 when the tribunal issued a decision of the claimants’ request to address quantum in a separate phase of the proceeding.

A UK real estate developer filed a claim against the government of Tanzania for alleged breaches of bilateral investment treaties that Tanzania entered into with both the United Kingdom and North Ireland in 1994 and Mauritius in 2009, over a terminated lease for an island resort project in Zanzibar.

In 2014, the Mauritius registered Pennyroyal Limited and its predecessor acquired consolidated leasehold for 411 hectares, from Revolutionary Government of Zanzibar (SMZ), for purposes of developing the Blue Amber Resort.

Pennyroyal reported to have spent a reported US$54 million at the site to develop the Blue Amber resort, worth a reported US$1.6 billion. 

It included plans for five-star hotels and thousands of villas and apartments, as well as a private airport, school, underwater nightclub and sleeping pods.

The resort construction, which was planned to take at least 15 years, also would have consisted five global leading hotels – including the Ritz Carlton and Anantara – an aqua park.

However, Pennyroyal says that it was informed in 2021 by the government of Zanzibar that it planned to give some of the land under its leasehold to “investors from Dubai”. 

This was followed by a letter from the Zanzibar government that it was seeking to execute a High Court decree where a third party company had won a dispute involving Plots No. 1107 and 1118.

Pennyroyal claims that the two plots were part of its leasehold as approved by the investments promotion authority. 

“It later transpired that in the case that was being referred to, the government abandoned the case, failed to appear in Court, and the court had issued a one-sided decision,” Pennyroyal said in a statement. 

“The Government has failed or refused to take any action to assert its rights or at least to appear in Court, to date. No explanation has to date been given as to why Pennyroyal Limited, being the registered Leasehold owner, was neither joined to the case nor informed of the proceedings.”

According to Steptoe & Johnson, the law firm representing Pennyroyal at the ICSID, the breach concern the revoking of the title deed on which the Blue Amber Resort was being constructed, claiming what is termed as hundreds of millions of dollars.

Early in 2022, the Revolutionary Government of Zanzibar, through the ministry of land terminated a land lease held by Pennyroyal Limited in Matewe, after it claimed that an area of 20 hectare out of 411 hectare inside the project was owned by another third party.

The Blue Amber Resort project was under construction with first phase delivery of units initially set for December 2022.

The termination was followed by a letter on July 25, 2022, from ZIPA informing Pennyroyal Limited that it will not renew its construction permit following termination of lease hold by the ministry of land.

The company said in 2022, it had abandoned operations at the site when both leases were terminated entirely by the land ministry in January that year.

Architectural design of Pennyroyal’s project