TANZANIA: Court quashes IPTL order

Written by FAUSTINE KAPAMA

The Court of Appeal has nullified the proceeding of the High Court, including the order given last year of winding up the Independent Power Tanzania Limited (IPTL) over allegations of fraud and mismanagement.

“The High Court committed fatal irregularities in the conduct of the impugned proceeding,” a panel comprising Chief Justice Chande Othman, Justices January Msoffe and Edward Rutakangwa, declared in a decision dated December 17, 2012.

They added, “all the proceedings in (cases number 49 of 2002 and 254 of 2003) as of September 17, 2009 are a nullity. The ruling and orders made therein, including the winding up order of July 15, 2011, are accordingly revised, quashed and set aside.”

The judges ordered that another judge of the High Court should hear the matter, expeditiously including challenges, if any, the competency of an application lodged by Standard Chartered Bank (Hong Kong) Limited, seeking for appointment of an administrator of the company.

Other issues to be resolved by the new presiding judge include the undetermined application filed on October 30, 2009 by VIP Engineering and Marketing Limited, for leave to join the provisional liquidator of IPTL as a necessary party in the matter.

The Court of Appeal had acted own motion (suo motu) to call for the High Court proceedings in order to be satisfied on their correctness and legality of the orders given therein. The order for winding up IPTL that has been revised was issued by Judge Semistocles Kaijage, currently a justice before the Court of Appeal.

The case involving IPTL has been pending before both the High Court and Court of Appeal for more than ten years now. Main litigants are shareholders, including Mechmar Corporation (Malaysia) Berhard and the VIP Engineering, a local company.

Mechmar, a Malaysian Company, is the majority shareholder with 70 per cent share, while VIP Engineering Company holds minority shares of 30 per cent. The minority shareholder had been accusing its shareholder counterpart of oppression, fraud and mismanagement of the company.

Other interested parties, who have been appearing in the court proceedings are Standard Chartered Bank (Hong Kong) Limited, which is claimed to be a debtor with IPTL, Bank of Tanzania and the Tanzania Electric Supply Company (Tanesco) Limited.

Source: Daily News (29/12/2012): http://dailynews.co.tz/index.php/local-news/13129-court-quashes-iptl-order