Court battle to contest Air Tanzania plane seizure begins in S. Africa

Dar es Salaam. Lawyers representing Tanzania in the case involving seizure of a plane of the national carrier ATCL asked a South African Court yesterday to quash the order for confiscation of the Airbus A220-300, arguing that it was wrongly granted.

Advocate Victor Nkhwashu of Victor Nkhwashu Attorneys told The Citizen that the Gauteng Lower Division Court erred in relying on a 2010 arbitration award which became a court order in 2012.

“We have shown that the order to impound Air Tanzania’s Airbus A220-300 was wrongly granted against the Government of Tanzania - and that it should be lifted,” the court heard.

The dispute dates back to 1982 when Hermanus Steyn demanded compensation from the Government of Tanzania which had nationalized his Arusha-based Rift Valley Seed Company Limited (RVSCL).

Mr Nkhwashu said the 2012 court order by the Tanzania High Court for the government to pay him compensation could not be a fresh court award.

“This means that it ceased to be an arbitration award,” said Nkhwashu adding that this aspect was not disclosed by Mr Steyn before the South African court on August 21 when the decision to seize the plane was made.

Mr Steyn on August 21, 2019 successfully sought an order to impound the ATCL aircraft to compel the government to pay compensation for his nationalised properties.

The properties included Rift Valley Seed Ltd, Hashman Estate Ltd, Lente Estate Ltd, Loldebis Ltd, Mayoka Estate Ltd, and Tanganyika Air Ltd.

The Tanzanian defence team further argues that the South African court does not have the jurisdiction to hear the case.

“The order can only be executed on Tanzanian soil as confirmed by Judge B. K. Phillip of the Commercial Division of the High Court of Tanzania because there is already a court order in Tanzania,” said Mr Nkhwashu.

On the other hand, Roger Wakefied - who is representing Mr Steyn - insists that a prima facie case exists and that a trial court should determine the merits of the case and prospects of success.

According to Mr Wakefield, the test for a prima facie case have been satisfied.

The case was adjourned to a date yet to be mentioned. The Judge will notify the two parties on the date of ruling after he has gone through their submissions.

In the early days of the case in 1985 Mr Steyn sought to be paid Sh373 million as compensation, a claim which the Tanzania government thought was unrealistic.

After due consultations with relevant government authorities - and inspired by the desire to solve the matters at the earliest time possible - the chairman of the government negotiation team made his move.

On May 4, 1985, Mr Steyn was offered Sh44.7 million as compensation for the acquisition of RVSL assets.

In reply on May 13, 1985, Mr Steyn acknowledged receipt of the offer - but did not indicate acceptance.

However, on July 9, 2010, retired High Court Judge Josephat Mackanja awarded Mr Steyn $36.3million.

There is evidence that, after the issuance of the arbitral award, there were negotiations between the two parties that resulted in a settlement deed of $30 million in Stein’s favour.

The government of Tanzania subsequently paid a bigger portion of the amount to settle the claim.