Oryx granted hearing over sh468 billion compensation dispute

Dar es Salaam. The Court of Appeal has agreed to hear an application by Oryx Oil Company Limited and Oryx Energies SA seeking to temporarily halt enforcement of a High Court order requiring them to pay Oilcom Tanzania Limited compensation totalling Sh468 billion.

In a decision delivered on November 13, 2024 by a panel of three justices - Rehema Mkuye (presiding), Abraham Mwampashi and Paul Ngwembe - the court instructed the Registrar to accept Oryx’s application seeking to suspend payment enforcement.

The decision comes after Oilcom's attempt to overturn a ruling by a single Justice of the court, Dr Benhajj Masoud, was dismissed.

Oryx had initially filed for a stay of execution on an arbitral award mandating them to pay Oilcom the substantial sum as a result of a contract dispute.

The Arbitration Tribunal’s award, delivered on November 30, 2023, arose from Oilcom’s claim that Oryx breached a 2016 fuel transportation lease agreement.

The tribunal, chaired by retired Court of Appeal judge Engera Kileo, retired High Court judge Sophia Wambura, and Prof Mussa Assad, ordered Oryx to pay Oilcom $147.2 million (over Sh468 billion).

The amount included compensation for actual losses, general damages of $20 million and a five percent annual interest from the date of claim submission to the award date.

Additionally, a three percent annual interest would accrue until full payment.

Oilcom sought High Court registration of the arbitration award, making it enforceable under Tanzanian law.

While Oryx contested the registration through two separate cases, both were dismissed.

In a decision by justice Salma Maghimbi on May 3, 2024, the court officially registered the award as its own judgment, ordering Oryx to comply.

Following the registration, Oryx appealed to the Court of Appeal and filed an application to halt execution pending the resolution of their appeal.

However, the Registrar dismissed their application.

Dissatisfied, Oryx filed a complaint with justice Masoud, who overturned the Registrar’s decision, stating that the Registrar had exceeded their legal mandate.

Oilcom challenged justice Masoud's ruling, but the panel of justices at the Court of Appeal upheld his decision, agreeing that the Registrar’s refusal to accept Oryx’s application went beyond their administrative powers.

Speaking after the ruling, Oryx’s lawyer Gaspar Nyika, said; “The court’s decision means our application to halt execution will now be heard. It is scheduled for Monday November 18, 2024.”

Mr Nyika expressed optimism that the court would accept their arguments and grant a stay of execution until their appeal is determined.

The ruling provides a temporary reprieve for Oryx as they continue their legal battle, while the outcome of their appeal remains highly anticipated.