Multi-billion shilling case from 1970s looms over Tanzania at The Hague

Dar es Salaam. Tanzania is in for a multi-billion shilling arbitration after Danish investor Finn Von Wurden Petersen initiated proceedings at The Hague, The Citizen has learnt.

The dispute, which dates back to the 1970s, centres on the alleged expropriation of Mr Petersen’s expansive Milimani and Noor Farms, along with a fleet of fishing vessels.

Despite Tanzania’s previous commitment to an amicable resolution, Mr Petersen’s pursuit of justice has escalated to the international stage, casting a shadow of uncertainty over the outcome.

The two farms, Milimani and Noors, measured 2,296 and 1,342 acres, respectively.

In his submission, Mr Petersen detailed his complaints to the Tanzanian authorities, alleging machinations between government officials, local authorities and officials of a commercial bank, which resulted in his loss of control of all moveable assets on the two farms in Arusha District, with local communities moving in to occupy the land.

The Citizen has yet to independently verify how much Mr Petersen is demanding, but sources said it could be in excess of $50 million (Sh130 billion).

Solicitor General Boniphace Luhende confirmed that an arbitration had been filed against Tanzania by the Danish investor at the Global Arbitration and a hearing was conducted last month.

He, however, did not delve into the details of the case, saying such cases are governed by confidentiality clauses which they cannot divulge.

“It is true, but these arbitration proceedings are governed by confidentiality matters which cannot be made public until the entire process has been completed. The submissions have been made and it will take almost six months from now,” Dr Luhende told The Citizen.

He added that revealing the names of those who participated in the case would amount to prejudice towards the proceedings.

Reports show that the government of Tanzania had committed to resolving the matter amicably but this promise never materialised, something Dr Luhende denied.

“There was never such an arrangement between the two parties.”

However, in a letter seen by The Citizen, the farmer in July 2021 wrote to the Attorney General’s office and in reply on September 30 his team was assured by the AG’s office of the commitment to handle the matter out of court.

“Be informed that the office of the Attorney General shall oversee negotiations with the view to reach an amicable settlement out of court as contemplated in article 9(1) of the treaty. Kindly be assured with the spirit of the Government’s commitment to resolve this matter amicably,” reads the letter in part.

Earlier case

The developments come after the Danish investor in an earlier case had engaged a local court regarding the same matter in a land case No 10 of 2018 whose judgment was delivered in April 2020.

In the case the investor prayed an order of the eviction from the suit land and injunctive order restraining the defendant her agents and servants or by whomsoever from entering the said suit farm or any portion of the said land.

Alternatively, he prayed for a payment of $4,592,000 as compensation for the said farm plus costs for the suit, the prayer was not granted.

Instead, the court sitting the Arusha registry, offered Mr Petersen almost a quarter of what he had claimed.

“The plaintiff is therefore entitled to compensation to $1,000,000 out of what he has claimed in his plaint (value of the exhausted improvements by then) x 1/4 (defendant’s liability) = $250,000 (Sh550,000,000),” ruled Judge M. R. Gwae on April 28, 2020.

The ruling further added: I am constrained to find the plaintiff’s claims to have been successfully to the above extent, she is now entitled to re-allocation of another piece of land worth not less than $250,000 equated to Sh550,000,000 or she be paid compensation in the tune of Sh250,000 or Sh550,000,000 for unexhausted improvement in the suit farm and costs of this case which shall be taxed by the Deputy Registrar of the court.

Not satisfied with the ruling, Mr Petersen appealed the ruling which was yet to be determined when he withdrew the case and filed for an arbitration at The Hague.