ASX-listed Indiana Resources expects to begin arbitration with the Government of Tanzania over the illegal expropriation of the Ntaka Hill nickel project and other breaches of the UK-Tanzania BIT in Q1, 2021.
As the majority shareholder in Ntaka Nickel Holdings and Nachingwea UK (both incorporated in the United Kingdom) Indiana is the manager of the joint venture for the project and is leading activities with regards to this matter.
In September 2020, Indiana Resources lodged a Request for Arbitration (RfA) under the UK-Tanzania BIT with the International Centre for Settlement of Investment Disputes (ICSID), part of the World Bank, in accordance with the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention).
The RfA contains background to the dispute, a summary of the claimant’s claims and an initial estimate of compensation for loss of the Ppoject and damages sustained by the Investors resulting from the actions of the Government of Tanzania, which is currently in excess of US$95 million.
ICSID sent the RfA to the Government of Tanzania in September and registered it in October 2020. Tanzania was invited to agree with the claimants on a method of constitution of the arbitral tribunal.
Tanzania has now formally advised ICSID that it will be represented by the Hon. Attorney General of the United Republic of Tanzania, Prof. Adelardus Kilangi and the Hon. Solicitor General of the United Republic of Tanzania, Gabriel Malata.
In the RfA, the claimants had proposed that the arbitral tribunal consist of three members and nominated Doak Bishop as their arbitrator panel member. Bishop is a partner in United States firm King & Spalding.
Tanzania has failed to engage with the claimant’s proposals concerning the constitution of the arbitral tribunal. The claimants will consider in due course whether it is necessary to request that ICSID appoint Tanzania’s arbitrator and the president of the arbitral tribunal.
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It is expected that the arbitral tribunal will be convened during the first quarter of 2021. Once the arbitral tribunal has been appointed, the next step will be the preparation and filing of the claimants’ memorial, which will include all evidence and supporting documents to support the claimant’s claim for compensation. Work on the memorial is currently ongoing.
The ICSID Convention has been ratified by 154 States, including Tanzania. An award issued by an ICSID tribunal is enforceable in any one of those 154 member States as if it were a judgment of one of their own courts. Partly because of this, States have overwhelmingly and historically complied voluntarily with the payment terms of such awards.
Indiana Resources has engaged LALIVE, an international law firm, to act on its behalf. LALIVE has offices in Geneva, Zurich and London, and specialises in international arbitration. The firm has extensive experience in international investment arbitration concerning mining and other natural resources and is representing investors and States as counsel worldwide.
Indiana Resources executive chairman Bronwyn Barnes says:
“We are pleased to see significant progress over the past 2 months in preparing to commence arbitration. We are well advanced in preparing our memorial and present our full claim for compensation that includes the loss of the asset and damages resulting from the actions of the Tanzanian Government.
“With litigation funding in place that covers all legal costs associated with arbitration we are confident that shareholder interests are protected from further loss. US$95 million remains our minimum claim for compensation and we are continuing to work on clarifying that number for arbitration.”