Court restrains Dubai firm from procurement deal

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Court restrains Dubai firm from procurement deal
Court restrains Dubai firm from procurement deal

Africa-PressTanzania. THE High Court has temporarily restrained Dubai-based Alchemist Energy Trading DMCC from receiving over 30bn/- from various international banks in execution of tender for supply of fuel in favour of Oil Marketing Companies under petroleum bulk procurement system in Tanzania.

Judge Leila Mgonya issued the injunction orders yesterday against the foreign company and 15 banks, the respondents, after granting an application lodged under certificate of urgency by Petroleum Bulk Procurement Agency (an Executive Government Agency) and the Attorney General (AG), the applicants.

The banks involved in the matter are ABSA Bank Tanzania, Stanbic Bank Tanzania LTD, NMB Bank, National Bank of Commerce (NBC), NBCA Bank Tanzania LTD, Citibank UAE, Natixis Bank, I & M Bank Rwanda PLC and Standard Bank of South Africa.

Others are Rabobank Singapore Branch, Bank of Kigali, Easter and Southern African Trade and Development Bank (TDB), ING Bank, ABSA Bank Mauritius and Citibank.

The judge issued the order in question pending final determination of arbitration proceedings filed by the applicants before the International Court of Arbitration of the International Chamber of Commerce (the ICC), following a dispute between the United Arab Emirates Company and the Agency.

“This court proceeds to grant the prayer sought by granting the applicants with the interim injunctive order to restrain the (Dubai Company) and its agents from receiving or performing any act calculated to receive the monies payable under various letters of credit or any party thereof,” reads part of the order.

This is the first interim injunctive order to be issued under section 51 of the Arbitration Act, Cap 15, of 2020, pending reference of a dispute to the International Tribunal.

The judge ruled that counsel for the applicants, led by Principal State Attorney George Mandepo demonstrated the need for the prayed orders to be granted, as the Dubai Company is said to have failed to honour the terms of contract between her and the agency under the tender in question.

Other counsels who successfully urged the application are Principal State Attorneys Mussa Mbura, Ponziano Lukosi and Salome Magesa, as well as State Attorneys Consesa Kahendaguze, Baraka Nyambita and Gallus Lupogo, all from the Solicitor General’s Office.

They stated that Alchemist Energy Trading DMCC, in execution of the tender, was supposed to deliver the petroleum products in favour of Oil Marketing Companies (OMCs), but failed to honour the obligation.

It was revealed during the hearing of the application that todate, the Dubai company was yet to deliver the consignment while she has already started through some financial institutions, to benefit from the matured letters of credit illegally.

The state lawyers had submitted that unless the court grants the interim injunctive order, the Agency and OMCs would suffer irreparable or immense losses that are not likely to be easily compensable monetarily in the event that the Arbitral proceedings filed with the ICC is successful.

In her consideration of the application in question, the judge was satisfied that there was indeed a reasonable fear and danger for the Agency’s interests to be interfered with in case the prayed injunctive orders were withheld taking into account the Dubai Company is a foreign and could not be easily held.

“Further there is a need of immediate indigence of restraining the first Respondent (Alchemist Energy Trading DMCC) from honouring the (Letters of Credit) through the 2nd to 16th Respondents (the 15 Banks) to its own good,” the judge said.

The Executive Agency was established by the government to coordinate the importation of petroleum products through Bulk Procurement System, using an international competitive tender system on behalf of the Oil Marketing Companies (OMCs). On December 4, 2020, the Agency floated a tender for the supply of petroleum products for the month of February, 2021.

The Dubai Company was amongst the bidders who submitted their bids for the tender and became a successful bidder and was issued with a Letter of Award on December 17, 2020.

The two parties entered into a Shipping and Supply Contract on January 5, 2021 for the tender to supply MOGAS for delivery of 34,692 metric tonnes for the month of February with delivery date range from February 27, 2021 to March 1, 2021.

On January 22, 2021, the parties signed an Addendum Agreement to add the volume of consignment from 34,692metric tonnes to 36,192 metric tonnes and change the delivery date range from February 27 – March 1, 2021 to 3rd – 5th March 2021.

It is stated that on March 8, 2021, the parties signed another Addendum Agreement to change the delivery date range from 3rd -5th March, 2021 to 14th – 16th March 2021.

The beneficiaries OMCs, as per the contract, are Acer Petroleum (T) Ltd, Afroil Investment Ltd, ATN Petroleum Co. Ltd, Camel Oil Ltd, Dalbit Petroleum (T) Ltd, GAPCO Tanzania Ltd, Hass Petroleum Ltd, Lake Oil Ltd and Mansoor Oil Industries Ltd.

Others are Mount Meru Petroleum Ltd, Oilcom Ltd, Olympic Petroleum (T) Ltd, Oryx Oil Company Ltd, Puma Energy (T) Ltd, Sahara Tanzania Ltd, Societe Petroleum (T) Ltd, Star Oil (T) Ltd, Total Tanzania Ltd and Vivo Energy Tanzania Ltd.

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