UAE firm ordered to pay Tanzania $10.9 million
What you need to know:
- In its ruling, the ICC determined that the Arabic company breached the agreement, and consequently, it was mandated to reimburse the joint PBPA $9,710,651.45, along with pre-award interest of 7.67 percent.
Dar es Salaam. Alchemist Energy Trading DMCC of the United Arab Emirates (UAE) has been ordered to pay a total of $10.9 million to the Petroleum Bulk Procurement Agency (PBPA) for breaching the contract and failing to deliver 36,192 metric volumes of fuel to the country.
Additionally, the company is obligated to pay pre-award interest of 7.67 percent from May 8, 2021, to November 2023, as per the judgment by the International Chamber of Commerce (ICC) following Tanzania’s successful case.
In a statement released by the office of the Solicitor General, the ICC has granted Tanzania victory in arbitration case number 2682/AZO against Alchemist Energy Trading DMCC from the UAE and PBPA.
“The office of the solicitor general extends its sincere gratitude to the attorney general’s office, PBPA, and all stakeholders who participated in facilitating this international consultation. We are committed to managing and conducting international proceedings with professionalism, ensuring the protection of our nation’s broad interests,” read part of the statement.
According to the statement, the case was initiated following the failure of Alchemist Energy Trading Company DMCC to fulfill its obligations under the agreement resulting from tender number PBPA/CPP/PMC/C3-KOJI/02/2021, dated January 5, 2021.
The agreement involved the supply of 36,192 metric volumes of oil, which were scheduled to be received between February 27, 2021, and March 1, 2021.
During the Tanzania government case, the panel was led by the solicitor general, Dr Boniphace Luhende, in collaboration with other lawyers from the AG office and the joint PBPA.
In its ruling, the ICC determined that the Arabic company breached the agreement, and consequently, it was mandated to reimburse the joint PBPA $9,710,651.45, along with pre-award interest of 7.67 percent.
Moreover, the company, as per the council’s directive, is obligated to compensate PBPA with an additional $1,140,048.00 for the damage caused by the destruction of the joint fuel.
The statement further specified that the company must cover PBPA’s council expenses totaling $882,000.00, in addition to reimbursing PBPA approximately Sh818.2 million for the expenses incurred during the case.
Additionally, the company is liable for post-award interest of 7.67 percent from March 06, 2024, until the full settlement of all outstanding payments owed to PBPA.
