The story behind Air Tanzania plane seizure in South Africa

Dar es Salaam. Fresh details have emerged on a decades-long legal tussle between the Tanzanian government and a retired white farmer that led a South African court to order the seizure of an Air Tanzania Company Limited (ATCL) jetliner in Johannesburg last weekend.

According to documents The Citizen has obtained, the investor at the centre of the 37-year-old saga is one Hermanus P. Steyn – formerly the owner of Arusha-based Rift Valley Seed Company Limited, which the government nationalised in 1982, sparking a protracted battle for compensation.

On Sunday night, the Chief Government spokesperson, Dr Hassan Abbasi, confirmed in an interview with state broadcaster TBC1 that the Airbus 220-300 was caught in a legal case that dates back to the 1980s, involving a South African farmer whose farm and other properties were nationalised by the government.

“The government and the farmer agreed on nationalising (the properties), however, the issue that arose was compensation. It came to a point where both parties agreed and the farmer was paid a certain amount during the fourth phase government,” said Dr Abbasi.

The retired farmer’s lawyer, Mr Roger Wakefield, of Werksmans Attorneys, was quoted by Reuters at the weekend saying that his client, an elderly farmer 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.

The plane was chosen because there is evidence it is owned directly by the Tanzanian government and its value is commensurate with the amount owed to the farmer, who was born in Namibia, he said.

Mr Wakefield said the only way Tanzania could secure the release of the plane was if it put up security or paid the debt. Dr Abbasi said there was still room for Tanzania to appeal the court ruling after the farmer applied for the enforcement of foreign arbitration award.

“Our team of lawyers is working on this and this plane shall soon resume work as normal,” he said.

It has emerged that negotiations began as early as January 17, 1982 when the takeover of the properties was effected.

Both Mr Steyn and the government of Tanzania presented their teams who conducted a valuation of the property and presented their findings.

Documents show that MS Donald Vicent Company acting on behalf of Mr Steyn presented a claim amounting to Sh373 million.

Negotiations between the two parties did not begin in earnest until the government team completed its work on May 24, 1984. Their report was submitted to the minister of Finance in June 1984.

The report showed that Mr Steyn’s demands of hundreds of millions of shillings were unrealistic, and the team made suggestions on what he should be compensated.

Following the submission of the report, the minister of Finance appointed a negotiation team under the chairmanship of the Treasury Registrar.

The government eight-man team comprised former Finance minister Mustafa Mkulo (chairman), former Attorney General Andrew Chenge (AG Chambers), Mr D Sungusia (from Kilimo), Mr E.A. Ngowi from the Income tax Department, Mr J.H. Lyale from TAC, Mr C.H. Ngakongwa from NBC, Mr E.A . Swai, Mr E E Mtika from NAFCO, and Mr Mfinanga from the Treasury.

The negotiation team whose first and second meetings were held in Dar es Salaam in January and February, respectively, agreed to put its last offer of the value of the identified assets of Sh44.7 million.

The first meeting between Mr Steyn, who was representing former shareholders of the acquired companies and the negotiating team between March 12 and 14 March where Mr Steyn presented his demands of Sh373 million did not bear fruit.

It became apparent that from the opening day the talks lacked acceptable supporting documents. The meeting was adjourned.

There was no indication that talks had broken down whatsoever because the two parties continued exchanging telexes.

After due consultations with relevant government authorities and inspired by the desire to solve the matters at the earliest time possible, the chairman made his move.

On May 4, 1985 Mr Steyn was offered Sh44.7 million as compensation for the acquisition of RVSL assets. In his reply on May 13, 1985, Mr Steyn acknowledged receipt of the offer, but did not indicate acceptance.

Negotiations at that point appeared to have stalled and a second phase of the talks led by Mr A.B.S Kilewo as chairman had to be initiated.

But the contentious issue was how Mr Steyn arrived at his valuation of Sh373 million as opposed to the government offer of Sh44.7 million.

He valued his motor vehicles, tractors, motorcycles and bicycles at Sh13 million, farm implements at Sh4.4 million and water-related assets at Sh5.9 million.

Mr Steyn valued tools and accessories at Sh4.4 million, furniture and fittings at Sh1.3 million, whereas office and house equipment was valued at Sh530,400 and radio call units Sh170,000.

He also owned buildings whose value he put at Sh16.2 million, livestock worth Sh22.8 million, timber (Sh4.1million) and stores and spare parts said to be worth Sh42,280,812.

There were also containers, tanks, chemicals, fuel and oils, which were valued at Sh4.2 million, households and foodstuffs valued at Sh1.5 million plus personal belongings.

He also owned broom and corn machines, which he valued at Sh3.2 million, arms and ammunitions (Sh626,850), and Sh5,827,902 in cash.

The government was also to compensate him for his seven aircraft, which he valued at Sh15,350,000, three of the planes belonged to Kenyan companies, while the other four belonged to RVSL, Tanzania.

The most contentious of all was compensation for 18,649 acres of land, for which he demanded to be paid Sh211 million.

According to media reports that The Citizen could not independently verify, the Tanzanian government has previously made some payments and promised to pay the rest.

However, it has not made a payment since around 2014, Reuters quoted Mr Wakefield saying.