Valambhia family battles Tanzania government for Sh280bn payout

Dar es Salaam. The family of the late businessman Devram Purshotam Valambhia has summoned the government of Tanzania to court in the United States, demanding payment of claims amounting to $119.5 million (nearly Sh280 billion).

The plaintiffs are the widow and four children of Valambhia, who died in 2005 in the US. They are currently all US citizens and live in Houston, Texas.

The summons was submitted at the United States District Court for the District of Columbia in February, this, year by Ms Vipula D. Valambhia and Priscilla D. Valambhia, Bhavna D. Valambhia, Punita D. Valambhia and Krishnakant D. Valambhia.

They are seeking to be paid $55,099,171.66 as ordered by the High Court of Tanzania in 2003. The sum was supposed to be paid as of June 4, 2001, plus interest accruing at seven per cent per annum since then, amounting to $64,500,750.87 as of February 19, 2018.

Defendants in the case include the Bank of Tanzania (BoT) and the Ministry of Defence and National Service.

According to a court proceedings document obtained by The Citizen, Tanzania purchased military equipment in the 1980s that it never fully paid for, despite repeated rulings by the High Court of Tanzania.

The case arose from a contract to supply troop carriers, tanks and other military equipment, entered into between Tanzania, acting through its Ministry of Defence, and the supplier, Transport Equipment Ltd.

The case, which was first filed at the local court as Civil Case No. 210 of 1989, was decided nine times in both the High Court and Court of Appeal of Tanzania, mostly in favour of the businessman.

According to the recent case docket, there have been 12 proceedings since the case was opened in February, this year.

The plaintiffs, represented by Texas-based attorney Meredith B. Parenti of Parenti Law PLLC, asked the court to throw out Tanzania’s plea that it was entitled to sovereign immunity.

“The defendants are not entitled to sovereign immunity because their purchases of military equipment are classic a commercial activity for which sovereign immunity is waived under the Foreign Sovereign Immunities Act (“FSIA”),” reads part of the plaintiff submission filed in June, this year.

It says that despite Tanzanian courts’ consistently ruling that Mr Valambhia and his family are entitled to $55 million plus interest as of June 4, 2001, the defendants never heeded the High Court decree and never paid Valambhia or his family. It says Tanzania’s failure to pay the amounts due under the commercial contract amounted to breach of contract on which the Tanzanian judgment is based.

“From the face of the complaint, this suit is timely. Plaintiffs filed their original Complaint on February 19, 2018, 14 years after the Tanzanian courts rejected Defendants’ multiple objections and challenges to the Tanzanian Judgment,” says the plaintiffs’ submission. The government of Tanzania was represented by Mr Lawrence H. Martin, Ms Clara E. Brillembourg and Mr Nicholas M. Renzler.

In its defence submitted on July 16, this year, Tanzania requested the court to dismiss the complaint pursuant for lack of subject matter jurisdiction and, arguing that the claim was also time-barred.

“The applicable limitations period is 15 years, but the plaintiffs waited longer than that to bring their recognition claim,” reads part of Tanzania’s submission.

But the plaintiffs said they commenced this action 14 years after the Tanzanian courts disposed of defendants’ multiple attempts to set aside the Tanzanian judgment.