Friday, September 29, 2017

Tanzania to pay KONOIKE company over Shs. Billion 133 after a court case failed

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Japan's Construction Company has requested the Court to demand that the Government of Tanzania pay more than 133 billion shillings after the TANROADS release of the TANROADS protest violation of the Road Construction Act.

It has been noted that TANROADS together with the Ministry of Construction issued a contract to another Company to finance Road construction of 79 miles.
Law360, New York (September 27, 2017, 7:09 PM EDT) -- A Japanese construction company asked a D.C. federal court on Tuesday to sign off on a more than $60 million arbitral award issued against several Tanzanian government agencies following a stymied road improvement project.

Konoike Construction Co. Ltd. won the February 2016 award after a London tribunal concluded that the Tanzanian National Roads Agency, the Ministry of Works and other Tanzanian government agencies had improperly called upon another contractor to finish the project on a 79-mile stretch of road in the African nation's interior after Konoike had given notice of its intention to terminate the contract.

The tribunal found that Konoike's notice of its intention to terminate — a measure the construction company took after the project had been beset with delays — did not mean that the Tanzanian agencies could eject Konoike from the project without reaching an agreement on the terms for ending their contract. They concluded that Tanzania had breached that contract and awarded Konoike more than $60 million.

Konoike is asking the court to confirm the award and to order Tanzania to pay what it owes.

The award includes contract damages, interest and costs and also requires the Tanzanian ministries and its attorney general to indemnify Konoike for any additional tax assessments or related interest or fines, according to the complaint.

The London tribunal had been constituted under the arbitration rules of the International Chamber of Commerce’s International Court of Arbitration.

Attorneys and representatives for the parties could not immediately be reached for comment Wednesday.

The dispute has its origins in a 2003 contract by which Konoike agreed to design and construct upgrades for 79 miles of road between what is now the Tanzanian capital, Dodoma, and the nearby city of Manyoni. The project was originally slated for completion in 2006, but a series of issues arose causing the project to be delayed.

Another target completion date in 2008 was missed when further disputes arose between the parties, and by December of that year, Konoike notified Tanzania of its intention to terminate the contract. Several months later, Konoike submitted an application for its final payment, having completed 92 percent of the work but only receiving 71 percent of the payment due.

In the meantime, however, Tanzania had engaged a replacement contractor and required Konoike to cease all further work. The tribunal concluded those actions amounted to a repudiatory breach of the contract, and that Konoike had therefore been entitled to terminate the contract in March 2009.

Konoike is represented by Steven K. Davidson, Michael J. Baratz and Jared R. Butcher of Steptoe & Johnson LLP.

Attorney information for Tanzania was not available Wednesday.

The case is Konoike Construction Co. Limited v. Ministry Of Works (Tanzania) et al., case number 1:17-cv-01986, in the U.S. District Court for the District of Columbia.

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