New twist in UK’s $8m claim over bribery scandal

Dar es Salaam. The British High Commission representative in a $8.4 million claim lawsuit against its government was turned down from standing as amicus curiae (friend of the court) for UK interests in a local court.

The High Court sitting in Dar es Salaam declined a request by Rugambwa Cyril Pesha to be admitted as a representative of the High Commission in the case stemming from a 2013 bribery scandal.

The lawsuit seeks to compel the UK government to pay Tanzania $8.4m (About Sh19 billion) in extra compensation for the $600 million foreign infrastructure loan scandal.

Tanzanian national Sioi Solomon has filed the constitution petition challenging payment of the $8.4million by Standard Bank Plc (now ICBC Standard Bank Plc) to the UK’s Consolidated Fund as profit forfeiture for not preventing bribery in the loan deal with Tanzania’s treasury.

The bank was in November 2015 fined $25.2 million by a UK court for its role in the loan scandal in a plea bargaining with the Serious Fraud Office (SFO). It was also ordered to pay Tanzania $7 million in compensation after admitting to the offence.

Mr Sioi was among those charged in Tanzania over the bribery and spent four years behind bars in Dar es Salaam awaiting trial. He has argued in his suit that the $8.4 million profit forfeiture belong to Tanzanian taxpayers and not the UK government.

The others charged alongside Mr Sioi were former TRA Commissioner General Harry Kitilya and ex-Stanbic bank official and former Miss Tanzania Shose Sinare.

They were all set free in 2020 after entering a plea bargaining with the DPP and paid Sh1.5 billion in fines.

When the petition came up for mention last Tuesday, Mr Rugabwa informed the court he had been instructed by the British High Commission to appear in court to represent the Attorney General of the UK, Chief Secretary of Her Majesty’s Treasury (HM Treasury) and the Director of Serious Fraud Office (SFO) who are respondents in the case. He said he had been instructed to raise the issue of sovereign immunity; that the UK government cannot be sued in any other jurisdiction unless the immunity is waived.

But, Mr Sinare Zaharani representing Mr Sioi opposed the plea, arguing that Mr Rugabwa could not be admitted both as amicus curiae and represent the said parties to the case.

“If you are a friend of the court you cannot at the same time appear for the respondents. Amicus curiae has to be invited by the court,” said Mr Sinare.

Judge John Mugeta also intervened seeking some answers.

Judge: Mr Rugambwa, are your appearing for the fifth, sixth and seventh respondent?

Rugambwa: No

Judge: So they are absent.

Rugambwa: I understand the British High Commission has communicated this information to the Tanzanian government, so the state attorney should have done that, and I found it wise to come while the issue is being addressed by the office of Solicitor general.

A state attorney for the minister of Finance and Planning and the Attorney General, Ms Pauline Mdendemi, told the court she had not received any other instructions.

“Normally such information is communicated to the Foreign Affairs ministry who would in turn instruct the concerned institutions to act,” she said.

Other defence lawyers unanimously agreed that Mr Rugambwa could not represent the British High Commission in the case because it was not even a party to the case.

Stanbic Bank which is the second respondent asked the court to strike out the petition, arguing that the petition was misconceived and bad in law for contravening section 8 (2) of the Basic Rights and Duties Enforcement Act.

They also argued that the petition was frivolous and vexatious and that the petitioner has no cause of action against the bank.

The bank has denied the allegation in the petition and insisted that the $8.4 million was lawfully paid to the ICBC Standard Bank after performing the required service under subscription agreement that is advised to the government of Tanzania on a successful private placement of loan notes through which the government raised $600 million.

The bank said the $8.4 million paid to Stanbic Bank was not the property of the people of the United Republic of Tanzania.