THE United States District Court for the Southern District of New York has refused to stay its decision, recognizing the competence of Tanzanian courts to determine all pending disputes involving Independent Power Tanzania Limited (IPTL).
United States District Judge, Victor Marrero ruled against Standard Chartered Bank (SCB), saying, “the request is denied. The court is not persuaded that further motion practices at this stage is warranted or would be productive.”
The judge added in his order dated October 10, 2013, “in light of its application of judicial estoppels, the court finds insufficient basis for a finding that SCB would likely prevail on appeal. SCB has recourse to seek a stay from the circuit court. It is so ordered.”
On October 4, this year, the New York court rejected the contention by SCB, seeking to challenge the jurisdiction of Tanzanian Courts to determine IPTL disputes and reaffirmed its September 10, order and that of September 23, in dismissing the Bank’s action.
In its order of September 10, the New York Court, among others, directed Standard Chartered Bank to file a statement confirming its consent to jurisdiction in the Republic of Tanzania while in that of September 23 the Court refused to review its previous ruling on the matter.
Before issuing the orders in question while litigating a case lodged by VIP Engineering and Marketing Limited, a Tanzanian Company, the Bank had represented, both orally and in writing, that it considered Tanzania an adequate alternative forum for determining the case.
Such presentation were deemed to be an expression of the Bank’s consent to the adjudication of the action in Tanzania and to comply with any final judgment rendered by any court of competent jurisdiction there in connection with the parties’ underlying the dispute.
“Because Standard Chartered previously informed the Court that Tanzania would be an adequate alternative forum and thus at least implicitly that it would consent to Tanzanian jurisdiction, the doctrine of judicial estoppels bar (it) from withdrawing that consent,” he ruled.
Judge Victor Marrero added, “Judicial estoppels prevent a party from making a contradictory statement in a later stage of litigation based on the exigencies of the moment.”
He said permitting Standard Chartered to change its position on consent to Tanzanian jurisdiction after the Court had already announced its reliance on the prior representations would have an adverse impact on the integrity of the judicial process.
According to the judge, Standard Chartered Bank’s inconsistent positions have imposed costs on VIP by delaying the resolution of the latter’s claims and imposing costs on them to continue litigating before the Court in New York.
After the October 4 ruling, the Bank asked the Court to stay its decision, alleging that irreparable loss was imminent because VIP Engineering Company would use the orders to prejudice SCB rights and which could cause the appeal to become moot.
The Bank alleged that the Court erred for holding SCB was estopped to deny its consent over Tanzanians courts’ powers and as detailed in the letter of September 27, the court erred for assuming substantive law declaring power before deciding its jurisdiction over the dispute.
On September 23, the Bank had written to the Court, opining that the order in controversy raises a serious jurisdictional issue and faulted the resolution of hotly disputed matter of whether it had consented to jurisdiction in Tanzania.
Standard Chartered Bank further explained that it is concerned with how VIP Engineering and Marketing Limited was misrepresenting the September 23, order in related arbitration proceedings between the parties.
However, in his ruling, the judge said a court could dismiss an action on forum non convenience grounds without resolving jurisdictional issues.
“The September 23 order, thus, raises no jurisdictional issues, contrary to Standard Chartered’s claim,” he said. Following the New York Court’s decision, last week, VIP requested the International Centre for the Settlement of Investment Disputes (ICSID) to dismiss the actions commenced by the Bank against the government and Tanesco over 117million US dollars payments.
The two Banks, Standard Chartered Bank (Hong Kong) Limited (the Bank) and by Standard Chartered Bank PLC filed before the ICSID two separate cases in the years 2010 and 2012, over the alleged non-payment by Independent Power Tanzania Limited (IPTL).
Since 2005 to date, however, VIP had been asserting in the Tanzania Courts that Standard Chartered Bank was not a creditor, but a pre-debtor of IPTL and reiterated similar position informally by letters at ICSID and formally by way of complaint in USA and Federal Courts.
“VIP reiterates its request to the ICSID Tribunals, to decline any jurisdiction in the subject matter of Bank’s purported interests in IPTL and its share and stakeholders, including of IPTL its successors in title,” stated Counsel Camilo Schutte, for VIP, in a letter to the Tribunal.
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