Firm to pay Tanesco 700m/- for breach of contract

AN arbitration tribunal has ordered McDonald Live Line Technology Limited (Claimant) to pay to the Tanzania Electric Supply Company Limited (Tanesco) over 700m/-damages for breach of contract involving rehabilitation of Kilimanjaro-Arusha live power line.

The tribunal led by seasoned advocate, Mtango Jotham Lukwalo, as sole arbitrator ruled, among others, that there was delay in completion of the work and the delay was caused by the claimant. 

As a result, he concluded, Tanesco suffered loss due to termination of the works. “The claimant shall pay the respondent (Tanesco) general damages in the sum of 200m/-.

The claimant shall also pay the respondent special damages in the sum of 504,699,685/84,” the arbitrator ruled and directed the awarded sum to be paid within 60 days of the date of collecting the award judgment.

It is alleged that McDonald Live Line Technology Limited was awarded tenders by Tanesco, while the company was in joint venture agreement with the managing director of the country’s giant electricity supply company, William Mhando.

Records show that on March 2010, McDonald Live Line Technology Limited and Tanesco executed a contract for rehabilitation of Kiyungi/ Arusha 06Kv lines by supplying, transporting and replacing wooden poles and other associated works, including casting and commissioning the works.

The said works were to be completed within a period of 32 weeks beginning July 28, 2010 and ending on March 9, 2011, at a consideration of 1,417,050,200/-. 

But the claimant failed to complete the said work within the stipulated period together with the extensions of time granted.

Such failure forced Tanesco to terminate the contract on June 19, last year, for breach of fundamental condition of the agreement, notably “stopping works for 28 days when no stoppage of work is shown on the current programme and the stoppage has not been authorized by the project manager.”

Upon termination of the contract, the claimant requested the Tanzania Institute of Arbitrators to appoint an arbitrator to resolve the dispute between itself and the respondent. 

On November 22, last year, the Institute appointed Mr Lukwaro to be the sole arbitrator in the dispute.

During hearing of the dispute, the claimant called only one witness, Mr McDonald Mwakamale, its Managing Director, while Tanesco fielded two witnesses, Eng Stanley Shayo, a Senior Transmission Engineer and Eng Metu Ndanshau, also a Transmission Engineer.
Source: Daily News, reported by Faustine Kapama from Dar es Salaam, Tanzania

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