Tanzania must pay USD109.5 million plus costs to companies fronted by Australian miner Indiana Resources Ltd in compensation for the unlawful expropriation of a nickel mine project in a case that has threatened to engulf Air Tanzania (TC, Dar es Salaam) after the company threatened to seize its aircraft should Dodoma fail to pay as directed by the World Bank's International Centre for Settlement of Investment Disputes (ICSID).

In a statement, Indiana Resources Executive Chairwoman Bronwyn Barnes welcomed the outcome of the five-year arbitration process and warned the company would enforce the award. "We now move to the enforcement phase. The ICSID Convention has been ratified by 158 member states of the World Bank - including Tanzania. This means that any award issued by an ICSID tribunal is enforceable in any one of those 158 member states as if it were a judgment of one of their own courts. We have consistently said that we would look to enforce an award against Tanzania and that work will commence now."

Barnes earlier told ch-aviation the company would consider seizing assets if Tanzania failed to make payment as directed by the ICSID. "This may include planes, although no clear decision has been made about this at the moment," she said.

The Tanzanian national carrier already had an aircraft attached in The Netherlands last year over a land dispute between the Tanzanian government and two Swedish investors. The A220-300 eventually returned home on July 7, 2023, following successful negotiations between the parties.

On July 14, a specially constituted arbitration tribunal of the ICSID unanimously ruled that Tanzania had breached the UK-Tanzania Bilateral Investment Treaty (BIT) when, under the presidency of the late John Magufuli, it expropriated on January 10, 2018, the Ntaka Hill nickel project from Ntaka Nickel Holdings, a joint venture of UK-based Nachingwea U.K. Limited and Ntaka Nickel Holdings Limited and Tanzania-based Nachingwea Nickel Limited. Indiana Resources was the manager of the joint venture and responsible for the arbitration against Tanzania.

The arbitration tribunal ordered Tanzania to pay the claimants USD76,706,461 in damages and additional losses, as well as compound interest at the rate of 2% above the US dollar prime rate on the amount awarded from January 10, 2018, to the date of payment, amounting to USD109.5 million in damages and accrued interest.

In addition, Tanzania must bear the cost of the arbitration, including the legal fees and ICSID expenses, totalling USD3,859,161. The country has 120 days to apply for the annulment of the order.

In terms of outstanding orders, state-owned Air Tanzania expects delivery of two B737-9 MAX from Boeing (BOE, Washington National) in August and December 2023 respectively while one B787-8 is expected in February 2024. In addition, it is acquiring one B737-7(BBJ) business jet. All are to be acquired through state-owned lessor TGF - Tanzania Government Flight.