South African court impounds Tanzanian plane in compensation case

According to Wakefield, the only way Tanzania could secure the release of the plane is if it put up security or paid the debt.
South African court impounds Tanzanian plane in compensation case
Tanzanian President John Pombe Magufuli speaks during a joint press conference with Kenyan President on October 31, 2016 at the State House in Nairobi. – President Magufuli is in the country for a two-day state visit. (Photo by SIMON MAINA / AFP)

South African authorities have impounded an Airbus 220-300 aircraft leased by Tanzania’s national flag carrier, following a court application by a retired farmer who is owed compensation by the Tanzanian government.

The plane had been scheduled to fly from the Oliver Tambo International Airport in Johannesburg, South Africa, to Dar es Salaam, Tanzania but was seized on an order issued by the Gauteng High Court in Johannesburg, Tanzania’s transport ministry said in a statement. 

Roger Wakefield, of Werksmans Attorneys, said his client, an elderly farmer who asked not to be named, was owed $33 million, including interest, in compensation from the Tanzanian government after his land in the country was expropriated several decades ago. The farmer was subsequently awarded the compensation in arbitration, he said. 

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According to Wakefield, the only way Tanzania could secure the release of the plane is if it put up security or paid the debt. 

“The plane was impounded in line with South African and international laws allowing for an asset owned by a foreign entity to be attached to a case related to a foreign arbitration award and was chosen because there is evidence it is owned directly by the Tanzanian government and its value is commensurate with the amount owed”, Wakefield adds.

The plane is leased by the state carrier, Air Tanzania Company Limited (ATCL). President John Magufuli has personally taken charge of the airline’s revival and has purchased eight new planes since 2016. 

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The airline’s existing fleet, which is leased from the state-run Tanzania Government Flight Agency (TGFA), includes one Boeing 787-8 Dreamliner, two Airbus A220-300 jets and three DHC Dash 8-400 aircraft, formerly known as the Bombardier Q400 turboprop. 

Tanzania has pinned hopes on the revival of the national airline to turn the country into a regional transport hub and boost the tourism sector, its biggest foreign exchange earner. 

In 2017, a Canadian construction firm seized one of Tanzania’s new Q400 turboprop planes in Canada over a $38 million lawsuit related to a compensation ruling by the International Court of Arbitration. 

The Q400 was released in March 2018 after Magufuli sent the country’s prime minister and attorney general to Canada to negotiate its release. Aviation sources said the government reached a financial settlement to secure the aircraft. 

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