Pan Africa to take over IPTL assets

Winding up proceedings involving Independent Power Tanzania Limited (IPTL) have taken a new turn following a move by advocate Martha Kaveni Renju to surrender from prosecuting her two cases.

In the cases she had sought to oppose changes of ownership and operation of the company. Advocate Renju, an administrator receiver with the company, decided to withdraw her cases which she filed at the High Court’s Commercial Division to restrain Pan Africa Power Solutions Tanzania Limited (PAP) from taking control of IPTL assets, notably the power plant.

Judge Robert Makaramba, who was hearing the two cases after being consolidated on consent from advocates from the parties, granted the request for the withdrawal last Thursday, after being informed of the new development by Counsel Gaspar Nyika, for Ms Renju.

Other parties in the two cases were PAP, VIP Engineering and Marketing Limited (VIP), Bank of Tanzania (BoT) and IPTL, who were represented by advocates Melchizedeck Lutema, Respicius Didas and Michael Ngalo, Mustafa Ismail and Joseph Makandege, respectively. Following this development, the PAP will take over possession of IPTL affairs, including the power plant situated at Tegeta in Dar es Salaam.

The PAP has promised to increase its capacity from the current 100MW to 500MW and significantly reduce the tariffs. In the cases, Ms Renju was seeking to restrain the PAP and VIP from taking possession of, exercising beneficial or legal rights or transferring any proceeds of Escrow Account at BoT or other IPTL assets, together with running the power plant, until final determination of the matter.

The filing of the two commercial cases could not go unopposed as the defendants filed several grounds of objection, with a view to requesting the court to dismiss them. The cases were filed separately before being consolidated on agreement from the parties.

Among the grounds of objection lodged by VIP, in particular, indicated that Ms Renju had no locus standi to commence the proceedings and that the orders she had sought were not legally maintainable under the law.

Other grounds showed that the court has no jurisdiction to grant the prayers sought by the plaintiff and that the action commenced was an incredible, time barred and was a deliberate continuation of abuse of court process.

The defendants further alleged that the court was ‘functus officio’ and the matter was ‘res judicata’ having already been decided by Judge John Utamwa at the High Court District Registry in Dar es Salaam.

On September 5, this year, Judge Utamwa granting orders sought by VIP, including the termination of Administrator General, as appointed provisional liquidator of IPTL and to hand over the company’s affairs to the new owner, PAP.

It was alleged that Ms Renju was appointed administrator receiver of IPTL on December 21, 2009 by Standard Chartered Bank (Hong Kong) Limited (Bank) under powers charged security deed over a loan amounting to 141,881,218.87 US dollars used to finance the project.

However, advocates for the defendants stated that the purported appointment by Ms Renju was a nullity because the bank was not a creditor of the company as has been falsely been representing to entitle them to appoint her as Administrator Receiver.

On September 17, this year, they said, the Registrar of Companies in Tanzania under letter Ref. No. MIT/RC/26398/63 reconfirmed to counsel for VIP that since the date of its incorporation, IPTL has never registered any charges.

In an affidavit filed by an official with BoT, one Virgil Bernard Msaki deponed on September 24, 2013, averted that the purported appointment of Ms Renju was a farce and a nullity, as it was based upon documents which never complied with the requirement of the law.
Source: Daily News, reported by Faustine Kapama from Dar es Salaam, Tanzania
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