VIP wins case over local courts competence to hear IPTL matters

A LOCAL investment company, VIP Engineering and Marketing Limited, has won a case in the United States against Standard Chartered Bank over competence of Tanzanian courts to determine disputes linking Independent Power Tanzania Limited (IPTL).

In its verdict of December 15, 2014, for the Second Circuit, the US Court of Appeals affirmed the decisions given by the United States District Court, Southern District of New York, in September and October last year, regarding Tanzanian jurisdiction courts in the matter.

“We have considered the arguments raised by SCB (Standard Chartered Bank) on appeal and find them to be without merit. For the reasons stated, the District Court’s ruling September 10, 2013, September 23, 2013 and October 4, 2013 are affirmed,” the verdict concludes.

Circuit Judges Jose Cabranes, Richard Wesley and Peter Hall, observed that the District Court found that the Bank, through its counsel, previously represented to the court that it considered Tanzania as an adequate alternative forum and would consent to jurisdiction in Tanzania.”

“Therefore, based upon the specific factual history of this case, the District Court’s reliance on SCB’s oral and written expressions of consent in granting SCB’s motion to dismiss on FNC grounds was not clear error,” they said.

In the appeal, the Bank was appealing from the District Court’s September 10, 2013 judgment, dismissing the complaint on forum non-convenience (FNC) grounds and two orders entered by the District Court on September 23, 2013 and October 4, 2013.

In the two orders, respectively, the court found SCB to have consented to four conditions associated with the complaint’s dismissal and stopped SCB from withdrawing that consent. We assume the parties’ familiarity with the underlying facts, the procedural history of the case.

On October 4, last year, the New York Court rejected the contention by SCB, seeking to challenge the jurisdiction of Tanzanian courts to determine IPTL disputes and reaffirmed its September 10, order and that of September 23, in dismissing the Bank’s action.

In its order of September 10, the New York Court, among others, directed Standard Chartered Bank to file a statement confirming its consent to jurisdiction in the Republic of Tanzania, while in that of September 23, the court refused to review its previous ruling on the matter.

Before issuing the orders in question while litigating a case lodged by the Tanzanian Company, the Bank had represented, both orally and in writing, that it considered Tanzania an adequate alternative forum for determining the case.

Such presentation were deemed to be an expression of the Bank’s consent to the adjudication of the action in Tanzania and to comply with any final judgment rendered by any court of competent jurisdiction there in connection with the parties’ underlying the dispute.

“Because Standard Chartered previously informed the court that Tanzania would be an adequate alternative forum and thus at least implicitly that it would consent to Tanzanian jurisdiction, the doctrine of judicial estoppels bar (it) from withdrawing that consent,” it was ruled.

Judge Victor Marrero added, “Judicial estoppels prevent a party from making a contradictory statement in a later stage of litigation based on the exigencies of the moment.”

He said permitting Standard Chartered to change its position on consent to Tanzanian jurisdiction after the court had already announced its reliance on the prior representations would have an adverse impact on the integrity of the judicial process.

According to the judge, Standard Chartered Bank’s inconsistent positions have imposed costs on VIP Engineering Company by delaying the resolution of the latter’s claims and imposing costs on them to continue litigating before the court in New York.

Source: Daily News (18/12/2014).