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Victory for Tanzania: ICC Rules in Favor of Gov’nt in Oil Supply Dispute with UAE

The Tanzanian government has emerged victorious in a case that was being conducted at the International Chamber of Commerce (ICC) against Alchemist Energy Trading DMCC, a company from the United Arab Emirates.
March 9, 2024
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The Tanzanian government has emerged victorious in a case that was being conducted at the International Chamber of Commerce (ICC) against Alchemist Energy Trading DMCC, a company from the United Arab Emirates.

The decision to award Tanzania victory in Arbitration Case No. 2682/AZO between the Petroleum Bulk Procurement Agency (PBPA) and the Attorney General’s Office against the company was issued by the ICC on March 6, 2024.

According to a statement released by the Office of the Attorney General, the case was filed after Alchemist Energy Trading DMCC failed to supply oil according to the contract resulting from tender No. PBPA/CPP/PMC/C3-KOJI/02/2021 dated January 5, 2021, for the importation of 36,192 metric tons of oil into the country. The oil was supposed to be received in the country between February 27, 2021, and March 1, 2021.

On the government’s side, the report indicates that the defense team was led by the Attorney General, Dr. Boniphace Luhende, in collaboration with other attorneys from the Office of the Attorney General, the Attorney General’s Office, and the Petroleum Bulk Procurement Agency (PBPA).

In its ruling, the Chamber explicitly stated that Alchemist Energy Trading DMCC breached the contract and thus ordered it to refund the Petroleum Bulk Procurement Agency (PBPA) $9.7 million US dollars plus pre-award interest of 7.67% from May 18, 2021, to November 2023, for breaching the contract and failing to deliver the oil to the country.

The report indicates that besides refunding that amount, the company has also been ordered to pay PBPA $1.14 million US dollars as a penalty for disrupting the oil procurement system. The company is also required to pay PBPA $882,000.00 US dollars to compensate for the expenses it incurred in conducting the case in the chamber and also pay the case costs amounting to $818,285,700.00 US dollars.

The report states that the company is also required to pay post-award interest of 7.67% from the date of the decision on March 6, 2024, until it completes all the payments owed.

 

 

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