The underlying dispute concerned the validity and enforceability of an emergency power off-take agreement (POA), with the state-owned company Tanzania Electric Supply Co Ltd (TANESCO), which had been assigned to Dowans Holdings SA and then to Dowans Tanzania Ltd (together, Dowans). In June 2008, TANESCO wrote to Dowans, alleging that the POA was void ab initio as being contrary to Tanzanian law.

Dowans brought an International Chamber of Commerce (ICC) arbitration against TANESCO. On 15 November 2010, an arbitral tribunal, seated in Tanzania, rendered an award in favour of Dowans and ordered TANESCO to pay approximately US$65 million for sums due in respect of unpaid invoices and in damages for wrongful termination of the POA.

In December 2010, Dowans sought recognition and enforcement of the award in the English courts (see Legal update, Enforcement of Tanzanian arbitration award stayed pending resolution of set aside applications in Tanzania (High Court)).

On 9 February 2011, TANESCO lodged a petition to set aside the award in the Tanzanian courts, arguing that the award was invalid on grounds of excess of jurisdiction, or alternatively that the award should be set aside on grounds of public policy and misconduct. TANESCO alleged that the tribunal had wrongly given effect to the POA which they alleged was procured in breach of Tanzanian law. They argued that this amounted to misconduct.

Dowans opposed the petition, stating that the arguments raised by TANESCO were incorrect in law. Dowans argued that TANESCO had sought to re-open and re-argue issues of fact and law that had already been decided by the tribunal and that had been specifically put to the tribunal by the parties during the arbitration in the Terms of Reference and in accordance with the arbitration agreement. By the arbitration agreement, the parties agreed that the decisions of the arbitrators should be final and binding, should not be subject to further appeal and the parties waived any rights to challenge the validity or enforceability of the arbitration agreement.

On 28 September 2011, the High Court of Tanzania rendered its decision, dismissing the petition to set aside the arbitral award.

In deciding the case, Mushi J declared that he was satisfied that all questions of fact and law raised in the petition had been put to the arbitral tribunal in the Terms of Reference. Accordingly, Mushi J declared that it was not proper for the High Court of Tanzania to interfere with the findings of the tribunal and therefore dismissed the application.

Tanzania Electric Supply Company Ltd v (1) Dowans Holdings SA and (2) Dowans Tanzania Limited.