Bank is legitimate IPTL creditor, court rules

THE High Court of Justice Queen’s Bench has granted a summary judgement against Independent Power Tanzania Limited (IPTL) for payments of 168,800,063 US dollars in favour of Standard Chartered Bank Hong Kong Limited and Standard Chartered Bank Malaysia Berhard.

It is a summary judgment because IPTL and two other defendants, Pan African Power Solution Limited (PAP) and VIP Engineering and Marketing Limited, had not submitted their written statements of defence to the claims by the two foreign banks.

The three local companies have been contesting against the jurisdiction of the London Court, Division Commercial Court, to hear the matter because the IPTL plant and all other assets are in Tanzania and the course of action relating to the matter originated from the East African nation.

They had been contending further that there were two other cases that were filed before the High Court of Tanzania prior to the English proceedings concerning the central issue on whether Standard Chartered Bank is a legitimate creditor of IPTL.

However, the London court ignored such facts and dismissed the contentions by the local companies, hence proceeding in favour of the banks without hearing both parties on merits. One of the case was filed by IPTL and PAP for payments of over 6trn/- and that of VIP seeking payments of over 1trn/-.

Standard Chartered Banks have been avoiding the Tanzania proceedings by employing delaying tactics to ensure the London proceedings are determined first. In the summary judgment dated November 16, 2016, Judge Flux ruled that Standard Chartered Bank is a legitimate creditor of IPTL.

He said that the facility agreement, security deed, shareholder support deed and charge of shares were was valid, effective and remains valid, effective and binding.

“The second claimant (Standard Chartered Bank Malaysia Berhard) is and have been the facility agent since October 2005, (whereas) the first claimant (Standard Chartered Bank Hong Kong Limited) is and has been the security agent since December 4, 2009,” Judge Flux ruled.

Source: Daily News