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DEFINED TERMS

(Amended) GimcoAfrica Valuation Report Valuation report prepared by GimcoAfrica in October 2011 (excluding moveable assets)
Application The Claimants’ application to vacate the Quantum Hearing, dated 29 July 2019
Assessment Regulations Land (Assessment of Value for Compensation) Regulations, 2001
BIT Bilateral Investment Treaty
Business Plan Business plan submitted by the Claimants before the TIC together with their first application for a Certificate of Incentives
Certificates of Incentives Two documents issued by the TIC to Sunlodges Tanzania in May 2003 (the "First Certificate of Incentives") and in September 2006 (the "Second Certificate of Incentives") granting certain tax and tariffs incentives "to diversify the Estate into cattle ranch and maize farm
Claimants Sunlodges Ltd and Sunlodges (T) Limited
Claims Regulations Land (Compensation Claims) Regulations, 2001
Company Shares Head of loss claimed in the alternative to the value of the Estate and corresponding to the value of Sunlodges Tanzania’s shares
Comparator Investors According to the Claimants, domestic investors in like circumstances to the Claimants (i.e. nationals of Tanzania who are engaged in agricultural activities in Tanzania)
Conditions of Rights of Occupancy Regulations Land (Conditions of Rights of Occupancy) Regulations, 2001
Daily Reports Reports recording the daily activity in the Estate between 2003 and 2011
Dangote Industries Dangote Industries Limited, a Nigerian company ultimately owned by Mr Aliko Dangote, a Nigerian national
Denmark-Tanzania BIT Agreement between the Government of the United Republic of Tanzania and the Government of the Kingdom of Denmark concerning the Promotion and Reciprocal Protection of Investments, signed on 22 April 1996
   
Disturbance Allowance The Claimants’ head of claim under section 3(1)(g) of the Land Act and Regulation 10 of the Assessment Regulations
DRC Depreciated replacement cost
Estate Agricultural estate situated on the east coast of Tanzania in the Mtwara region and known as the Mikindani or the Kabisela Estate
FET Fair and equitable treatment
Fifth Notice of Revocation Notice of revocation dated 7 June 2011 in relation to EP 585b (one of the land plots covered by one of the three Rights of Occupancy under Certificate of Title No. 3985)
First Contempt Application Application filed by Sunlodges Tanzania before the High Court of Tanzania on 17 November 2011 requesting a declaration that the District Executive Director of Mtwara Council was in contempt of the Interim Injunction
First Notice of Revocation Notice of revocation dated 9 May 2011 and served to Sunlodges Tanzania on 12 May 2011, in relation to right of occupancy 7877 (under Certificate of Title No. 2769) and right of occupancy 21272 (under Certificate of Title No. 15501)
Fourth Notice of Revocation Notice of revocation dated 7 June 2011 in relation to EP 585a (one of the land plots covered by one of the three Rights of Occupancy under Certificate of Title No. 3985)
FPS Full protection and security
Gazette Official Gazette of the United Republic of Tanzania
GimcoAfrica GimcoAfrica Limited
GimcoAfrica Valuation Report Valuation report prepared by GimcoAfrica in October 2011
Government Valuation Reports Two valuation reports dated 27 August 2012 and prepared by the Valuation Section of Mtwara District Council
ICJ International Court of Justice
High Court High Court of Tanzania
Inspection Report of May 2011 Inspection report allegedly produced as a result of the Prior Inspection on the Estate
Interim Injunction Order for the maintenance of the status quo dated 13 October 2011 and issued by the Tanzanian judge assigned to the Judicial Review Proceedings
Interim Relief Application Application by Sunlodges Tanzania for an interim prohibition to prevent its eviction from the Estate pending the Judicial Review Proceedings
Italy-Tanzania BIT Agreement between the Government of the United Republic of Tanzania and the Government of the Italian Republic on the Promotion and Protection of Investments, signed on 21 August 2001 and entered into force on 25 April 2003, also referred to as the Treaty
Judicial Review Judgement Judgement issued on 23 July 2012 by the High Court of Tanzania in the Judicial Review Proceedings
Judicial Review Proceedings Proceedings before the High Court of Tanzania captioned Sunlodges Tanzania Ltd v Minister of Lands Housing and Human Settlement Development & Ors, Miscellaneous Land Cause No. 6 of 2011
Land Acquisition Act Land Acquisition Act, 1967
Land Act Land Act, 1999
May 2011 Inspection Inspection that allegedly took place in the Estate on 2 May 2011 by an Authorized Officer of Mtwara District Council
MFN Most favoured nation
Notice of Dispute Letter dated 1 March 2017 from the Claimants to the High Commission of Tanzania in the United Kingdom and the Attorney General of Tanzania
Notices of Revocation Together, the First, Second, Third, Fourth and Fifth Notices of Revocation
Oral Hearing Hearing held on 3 to 6 June 2019 at the Peace Palace, The Hague, the Netherlands
PCA Permanent Court of Arbitration
Progress Reports Two progress reports submitted by the Claimants to the TIC on 15 December 2003 and 24 May 2006 in connection with the First Certificate of Incentives
Quantum Hearing Hearing scheduled on 24 September 2019 and vacated on 19 September 2019
Rebutter Respondent’s Rebutter, dated 3 May 2019
Receiver The Receiver of Karimjee Agriculture Limited (Coopers & Lybrand), who held title over the Estate until its transfer to Sunlodges Tanzania
Rejoinder The Respondent’s Statement of Rejoinder, dated 22 February 2019
Reply The Claimants’ Statement of Reply, dated 18 December 2018
Reply Submissions on Costs The Claimants’ Reply Submission on Costs and the Respondent’s Reply Submission on Costs, both dated 17 October 2019
Request for Interim Measures The Claimants’ request for interim measures, dated 21 August 2019
Respondent United Republic of Tanzania
Request for Interim Measures The Claimants’ request for interim measures, dated 21 August 2019
Revocation Decision Decision by the President of Tanzania on 6 September 2011 whereby Certificates of Title Nos. 15501, 2769, 3550, and 3985 were revoked "due to violation against terms and conditions of ownership"
   
Second Contempt Application Application filed by Sunlodges Tanzania before the High Court of Tanzania on 9 February 2012 requesting a declaration that the Regional Commissioner of Mtwara Region was in contempt of the Interim Injunction
Second Notice of Revocation Notice of revocation dated 7 June 2011 in relation to right of occupancy 2662 (one of the three Rights of Occupancy under Certificate of Title No. 3985)
Special Committee Special Committee appointed by the Permanent Secretary for the Ministry of Lands, Housing and Human Settlement tasked with inspecting the development of the Estate in July 2011
Special Committee Inspection Report Inspection report allegedly prepared by the Special Committee as a result of its inspection in the Estate in July 2011
Statement of Claim The Claimants’ Statement of Claim, dated 22 June 2018
Statement of Defence The Respondent’s Statement of Defence and Counter Claim, dated 26 October 2018
Submissions on Costs The Claimants’ Submission on Costs and the Respondent’s Submission on Costs, both dated 10 October 2019
Sunlodges BVI The First Claimant, Sunlodges Ltd, a company incorporated in the British Virgin Islands
Sunlodges BVI Loan Several loans from Sunlodges BVI to Sunlodges Tanzania meant to fund the operating costs of the Estate
Sunlodges Tanzania The Second Claimant, Sunlodges (T) Limited, a company incorporated in Tanzania
Surrejoinder The Claimants’ Surrejoinder, dated 10 April 2019
Switzerland-Tanzania BIT Agreement between the Swiss Confederation and the United Republic of Tanzania on the Promotion and Reciprocal Protection of Investments, signed on 8 April 2004 and which entered into force on 6 April 2006
   
Tanzania The Respondent, the United Republic of Tanzania
Tanzania Investment Act Tanzania Investment Act, 1997
Third Notice of Revocation Notice of Revocation dated 7 June 2011 in relation to right of occupancy 2664 (one of the three Rights of Occupancy under Certificate of Title No. 3985)
TIC Tanzania Investment Centre
TRA Tanzania Revenue Authority
Treaty Agreement between the Government of the United Republic of Tanzania and the Government of the Italian Republic on the Promotion and Protection of Investments, signed on 21 August 2001 and entered into force on 25 April 2003, also referred to as the Italy-Tanzania BIT

DRAMATIS PERSONAE

Ms Evelyine Baruti Mugasha Chief Government Valuer in the Ministry of Lands, Housing and Human Settlements Development She has submitted two witness statements in this arbitration (RWS-3 and RWS-6)
Ms Rexella D Hodge Managing Director of Vistra (BVI) Limited and a director of Vistra Nominees (BVI) Ltd, two companies that provide nominee shareholder services to Sunlodges BVI She has submitted one witness statement in this arbitration (CWS-4)
Mr Gasper Vitallis Luanda Assistant Commissioner for Lands for Southern Zone at Mtwara He has submitted two witness statements in this arbitration (RWS-2 and RWS-5)
Mr Ali Maawiya Shareholder and director of Sunlodges Tanzania and Mr Paglieri’s assistant
Mr Sultan Mundeme Together with Mr James Swilla, author of GimcoAfrica Ltd Valuation of Mikindani Estate (C-194)
Mr Oscar Anthony Ng’itu Director of Nanyamba Town Council in Tanzania and former Council Solicitor and Head of Legal Unit of Mtwara District Council. He acted as District Executive Director of Mtwara District Council on several dates between 2011 and 2014 He has submitted two witness statements in this arbitration (RWS-1 and RWS-4)
Mr Franco Paglieri According to the Claimants, an Italian national that has always directed, managed and controlled Sunlodges BVI and Sunlodges Tanzania He has submitted three witness statements in this arbitration (CWS-1, CWS-2 and CWS-5)
Ms Sally Perry Shareholder and director of Sunlodges Tanzania She has submitted one witness statement in this arbitration (CWS-3)
Mr James Swilla Together with Mr Sultan Mundeme, author of GimcoAfrica Ltd Valuation of Mikindani Estate (C-194)

I. INTRODUCTION

A.The Parties

1.
The Claimants are (i) Sunlodges Ltd, a company incorporated under the laws of the territory of the British Virgin Islands ("Sunlodges BVI"); and (ii) Sunlodges (T) Limited ("Sunlodges Tanzania"), a company incorporated under the laws of Tanzania (together, the "Claimants").
2.
The Claimants are represented in this arbitration by:

Mr Matthew Coleman
Mr Thomas Innes
Steptoe & Johnson LLP
5 Aldermanbury Square
London EC2V 7HR
United Kingdom

3.
The Respondent in this arbitration is the United Republic of Tanzania ("Tanzania" or the "Respondent").
4.
The Respondent is represented in this arbitration by:

Dr Clement Mashamba, Solicitor General
Mr Gabriel Malata, Deputy Solicitor General
Mr George Mandepo, Acting Director of Arbitration
Mr Vicent Tangoh, Acting Assistant Director of International Arbitration
Mr Michael Luena, Director of Legal Service
Ms Neisha Shao, State Attorney
Ms Consesa Kahendaguza, State Attorney
Ms Rehema Mtulya, State Attorney
P.O. Box 17554
Dar es Salaam
United Republic of Tanzania

B. The Dispute

5.
The dispute arises out of the Respondent’s decision in September 2011 to revoke the Claimants’ title to an agricultural estate situated on the east coast of Tanzania in the region of Mtwara, referred to as the Mikindani Estate or the Kabisela Estate (the "Estate").1
6.

The Claimants contend that the Respondent’s decision to revoke the title amounts to an unlawful expropriation of their investments in Tanzania and to other breaches of the Agreement Between the Government of the United Republic of Tanzania and the Government of the Italian Republic on the Promotion and Protection of Investments (the "Treaty" or the "Italy-Tanzania BIT"),2 and seek compensation for the losses they allegedly sustained as a result of these breaches.3

7.
The Respondent characterizes its decision to revoke the Claimants’ title over the Estate as a termination of their Rights of Occupancy and denies that it qualifies as an expropriation.4 According to the Respondent, the decision was taken in the wake of the Claimants’ failure to comply with the terms and conditions of occupancy of the Estate5 and denies having breached Tanzanian law, customary international law or the Treaty.6

II.PROCEDURAL HISTORY

A. Notice of Dispute

8.
By letter dated 1 March 2017, the Claimants informed the High Commission of Tanzania in the United Kingdom and the Attorney General of Tanzania of their claims under the Treaty and invited Tanzania to initiate settlement negotiations (the "Notice of Dispute").7

B. Commencement of the Arbitration

9.

By a Notice of Arbitration dated 5 September 2017 and received by the Respondent on the same date, the Claimants commenced arbitration proceedings against the Respondent pursuant to Article 8 of the Treaty and the Arbitration Rules of the United Nations Commission on International Trade Law (1976) (the "UNCITRAL Rules").

C. Constitution of the Tribunal

10.
In their Notice of Arbitration, the Claimants appointed Sir David A. R. Williams QC, a national of New Zealand, as the first arbitrator.
11.

On 18 October 2017, the Claimants requested the Secretary-General of the Permanent Court of Arbitration (the "PCA") to designate an appointing authority pursuant to Article 7(2)(b) of the UNCITRAL Rules.

12.
On 8 November 2017, the Secretary-General of the PCA designated Professor Fabien Gélinas, a national of Canada, as appointing authority for all purposes under the UNCITRAL Rules.
13.
On 30 November 2017, Professor Gélinas appointed Mr Ucheora Onwuamaegbu, a dual Nigerian and British national, as the second arbitrator.
14.
On 2 January 2018, the co-arbitrators appointed Dr Veijo Heiskanen, a Finnish national, as the presiding arbitrator.

D. Adoption of the Terms of Appointment and Procedural Order No. 1

15.
On 20 January 2018, the Tribunal wrote to the Parties, proposing that an organizational meeting be held with the Parties to discuss and agree on a first procedural order as well as a procedural timetable for the arbitration. The Parties were invited to confer and inform the Tribunal of any agreement reached on the date of such meeting by 29 January 2018. The Tribunal indicated that it intended to prepare and circulate a draft Terms of Appointment of the Tribunal as well as a draft of the first procedural order for the Parties' review and comment.
16.
On 23 January 2018, the Tribunal circulated draft Terms of Appointment and a draft of Procedural Order No. 1. The Tribunal encouraged the Parties to liaise and seek agreement on any proposed amendments to the drafts and, to the extent the Parties were unable to agree, set out their proposed amendments separately.
17.
On 29 January 2018, the Respondent wrote to the Tribunal, requesting that the arbitration proceedings be suspended to allow the Parties to enter into settlement negotiations.
18.
On 6 February 2018, the Claimants replied to the Respondent's letter of 29 January 2018, requesting that the Respondent's request for suspension be dismissed.
19.
On 13 February 2018, the Tribunal denied the Respondent's request for suspension, noting that the evidence indicated that the Claimants had invited the Respondent to engage in negotiations during the six-month cooling-off period under the Treaty, but the Respondent had failed to respond. The Tribunal indicated that its decision was without prejudice to the Respondent's right to raise any preliminary objections it might wish to raise, if supported with additional evidence.
20.
On 19 February 2018, the Tribunal held a procedural meeting by telephone conference call to discuss procedural details, including draft Terms of Appointment and a draft Procedural Order No. 1. Counsel for the Claimants participated in the telephone conference, while the Respondent, although duly invited, did not participate.
21.
On 22 February 2018, the Tribunal circulated revised draft Terms of Appointment. The Claimants provided written comments on the draft on 13 March 2018, and the Respondent submitted its comments on 6 March and 13 April 2018.
22.
On 4 May 2018, the Tribunal circulated a revised draft of Procedural Order No. 1, incorporating the results of the procedural meeting held on 19 February 2018, and invited further comments from the Parties on the revised draft.
23.
On 15 May 2018, the Tribunal issued Procedural Order No. 1, establishing the timetable for the proceedings and setting out the rules of procedure of the arbitration.
24.
On 30 May 2018, the Tribunal circulated the Terms of Appointment as executed by the Parties and the members of the Tribunal.

E. Written Submissions

25.
On 22 June 2018, the Claimants submitted their Statement of Claim (the "Statement of Claim").
26.
On 26 October 2018, the Respondent submitted its Statement of Defence and Counter Claim (the "Statement of Defence"). A revised version of the Statement of Defence was filed on 30 October 2018
27.
On 18 December 2018, the Claimants submitted their Statement of Reply (the "Reply").
28.
On 22 February 2019, the Respondent submitted its Statement of Rejoinder (the "Rejoinder").
29.
On 15 March 2019, the Claimants requested leave to reply to certain evidence and arguments which, in their view, had been filed out of time by the Respondent in its Rejoinder or, in the alternative, requested their exclusion from the record.
30.
On 22 March 2019, the Respondent provided its comments on the Claimants’ request of 15 March 2019
31.
On 26 March 2019, the Tribunal decided on the Claimants’ request of 15 March 2019 and invited further submissions from the Parties.
32.
On 29 March 2019, the Respondent produced certain Italian statutory texts.
33.
On 10 April 2019, the Claimants submitted their Surrejoinder (the "Surrejoinder").
34.
On 3 May 2019, the Respondent submitted its Rebutter (the "Rebutter").

F.The Oral Hearing

35.
On 15 May 2019, the Parties and the Tribunal held a telephone conference in preparation for the Oral Hearing scheduled for 3-7 June 2019 (the "Oral Hearing").
36.
On 17 May 2019, the Tribunal issued Procedural Order No. 2, convening the Oral Hearing, establishing its place, time, agenda, and other technical and ancillary aspects thereof.
37.
The Oral Hearing was held on 3-6 June at the Peace Palace, The Hague, the Netherlands. The following persons attended:

The Tribunal
Dr Veijo Heiskanen (Presiding Arbitrator)
Sir David A R Williams QC
Mr Ucheora Onwuamaegbu

The Claimants
Mr Franco Paglieri
Ms Sally Perry
(Representatives and Fact Witnesses)

Mr Matthew Coleman
Mr Thomas Innes
Ms Yuliya Luy
(Steptoe & Johnson LLP)

The Respondent
Hon Dr Clement Mashamba, Solicitor General
Mr George Nathaniel Mandepo
Mr Michael Luena
Mr David Zacharia Kakwaya
Mr Arnold Ainory Gesase
Ms Consesa Kahendaguza
Ms Neisha Shao
Ms Rehema Mtulya
Ms Hellen Njau
Mr Festo Nyakunga
(State Representatives and Counsel)

H.E. Ambassador Irene F. M. Kasyanju
Ms Naomi Z. Mpemba
(Embassy of the United Republic of Tanzania in the Kingdom of the Netherlands)

Mr Oscar Ng’itu
Mr Gasper Luanda
(Fact Witnesses)

Permanent Court of Arbitration
Mr José Luis Aragón Cardiel, Legal Counsel
Ms Elena Laura Álvarez Ortega, Assistant Legal Counsel
Ms Marihu Paola Contreras Medina, Assistant Legal Counsel

Court Reporter
Mr David Kasdan
(Worldwide Reporting LLP)

38.
During the Oral Hearing, the fact witnesses were examined in the following order:

For the Claimants
Mr Franco Paglieri
Ms Sally Perry

For the Respondent
Mr Oscar Ng’itu
Mr Gasper Luanda

G. Post-Hearing Proceedings

39.
On 6 June 2019, the Tribunal invited the Parties' comments on whether post-hearing submissions would be necessary. The Respondent submitted its comments on the issue on 10 June 2019, and the Claimants provided their comments on 14 June 2019.
40.
On 17 June 2019, the Tribunal called Mr James Swilla and Mr Sultan Mundeme of GimcoAfrica (authors of GimcoAfrica Ltd Valuation of Mikindani Estate, C-194) and Ms Evelyne Baruti Mugasha (Chief Government Valuer of Tanzania and author of witness statements RWS-3 and RWS-6) for questioning at a one-day hearing (the "Quantum Hearing"). The Tribunal also noted that the Parties would have an opportunity to examine these individuals at the Quantum Hearing on the evidence provided in response to the Tribunal's questioning, and that it would identify issues or topics that it wished to explore at the hearing.
41.
On 26 June 2019, following consultations with the Parties, the Tribunal fixed the date (i.e. 24 September 2019) and venue of the Quantum Hearing (The Hague).
42.
On 29 July 2019, the Claimants informed the Tribunal that Messrs Mundeme and Swilla were unwilling to attend the Quantum Hearing and submitted an application requesting the Tribunal to vacate the Quantum Hearing (the "Application").
43.
On 15 August 2019, the Respondent submitted its comments on the Application.
44.
On 16 August 2019, the Claimants requested leave to reply to the Respondent's comments of 15 August 2019, which the Tribunal granted on the same day. The Tribunal also requested the Claimants to indicate whether Messrs Mundeme and Swilla would be available to answer questions from the Tribunal in writing instead of attending the Quantum Hearing.
45.
On 21 August 2019, the Claimants submitted their reply to the Respondent's comments, which included a request for interim measures of protection (the "Request for Interim Measures").
46.
On 28 August 2019, the Respondent submitted its comments on the Claimants' reply of 21 August 2019.
47.
On 3 September 2019, the Tribunal informed the Parties that it had decided to vacate the date reserved for the Quantum Hearing, reserving its decision on whether to hold a hearing on certain matters of valuation and quantum until a later stage.
48.
On 4 September 2019, the Respondent invited the Tribunal to summon all valuation witnesses.
49.
On the same date, the Claimants filed two communications addressed by Mr Mundeme to the Claimants’ representatives (C-338 and C-339), confirming that he was "willing and ready to answer questions from the Tribunal in writing instead of attending the [Quantum Hearing]." The Claimants also provided comments on Mr Mundeme’s communications.
50.
On 6 September 2019, the Respondent submitted additional comments on the Claimants’ Application and Request for Interim Measures.
51.
On 19 September 2019, the Tribunal issued Procedural Order No. 3. whereby the Tribunal (i) decided to vacate the Quantum Hearing; (ii) rejected the Claimants’ Request for Interim Measures; (iii) reminded the Parties of their ongoing duty not to aggravate the dispute and to arbitrate in good faith; (iv) reserved its decision on costs relating to the Claimants’ Application and Request for Interim Measures; and (v) rejected all other requests made in connection with the Claimants’ Application and Request for Interim Measures. In connection with the Application, the Tribunal concluded, inter alia, as follows:

39. The Tribunal notes that, while Mr Mundeme has recently indicated to the Claimants’ counsel that he would be available to answer questions from the Tribunal in writing, he would not be available to attend a hearing, due to his "poor and failing health." Mr Swilla, the other author of the GimcoAfrica Report, has not confirmed his availability for either purpose. It is therefore clear that neither Mr Mundeme nor Mr Swilla is available to attend the Quantum Hearing, and while Mr Mundeme has indicated that he would be willing to provide answers to the Tribunal’s questions in writing, Mr Swilla has not articulated any reason why he would not be able to appear and has repeatedly failed to communicate with the Claimants’ counsel on this matter. In the circumstances, the Tribunal decides to vacate the Quantum Hearing. In reaching this conclusion, the Tribunal does not find it necessary to make any determinations regarding the reasons for Messrs Swilla and Mundeme’s unavailability. The Tribunal merely notes that it is satisfied, based on the evidence before it, that the unavailability of Messrs Swilla and Mundeme is not due to the Claimants’ lack of effort to procure their attendance at the Quantum Hearing. In the circumstances, the Tribunal need not address the Respondent’s argument that the Tribunal lacks jurisdiction to deal with human rights issues.

40. The remaining issue is whether the Tribunal should put questions to Mr Mundeme and Ms Mugasha in writing. The Tribunal considers that this would not be appropriate in the circumstances. First, according to the GimcoAfrica report, it was prepared "for and on behalf of GimcoAfrica Limited by" Mr James Swilla and "certified by" Mr Mundeme. Mr Swilla is therefore at least a co-author if not the main author of the report, and it would be inappropriate for the Tribunal to question only one of the two co-authors of a report that does not appear to indicate any division of labour between them. In the circumstances, the value of any additional evidence that could be obtained by further questioning of Mr Mundeme would be of limited, if any, value. As to Ms Mugasha, while it appears that she would be available to respond to the Tribunal’s written questions, the unavailability of Messrs Mundeme and Swilla raises issues of due process and equal treatment of the Parties. The Tribunal is also concerned that written questions would not allow testing of the evidence as would occur during an oral hearing.

52.
By letter dated 26 September 2019, the Tribunal invited the Parties to file submissions on the costs incurred in this arbitration.
53.
On 10 October 2019, the Parties simultaneously filed their submissions on costs (the "Submissions on Costs").
54.
On 17 October 2019, the Parties simultaneously filed their comments on the other side’s submission on costs (the "Reply Submissions on Costs").

III. FACTUAL BACKGROUND

55.
This section summarizes the factual background of the dispute based on the Parties’ submissions. It provides the context to the Tribunal’s decision and is not intended to set out in full the Parties’ submissions on the facts or the supporting evidence. Also, as the Parties’ characterizations of key events differ in significant respects, these differences are noted as they arise.

A. The Parties and related individuals and Entities

56.
This section identifies the key actors and State instrumentalities involved in the present dispute.

1. The Claimants and Mr Paglieri

57.
The Claimants contend that they have been directed and controlled since their incorporation by Mr Franco Paglieri ("Mr Paglieri"), an Italian national8 born in Genoa (Italy) in 1946 to Italian parents.9 According to the Claimants, Mr Paglieri has exercised control through his ownership of all of the issued capital of Sunlodges BVI through a professional nominee company,10 with Sunlodges BVI owning in turn 75% of the issued capital of Sunlodges Tanzania.11 Mr Paglieri also claims to own 0.002% of Sunlodges Tanzania directly.12
58.
The First Claimant, Sunlodges BVI, was incorporated in the British Virgin Islands on 29 November 1996 by Mr Paglieri.13
59.
The Second Claimant, Sunlodges Tanzania, was incorporated in Tanzania on 1 October 199714 for the purpose of acquiring the Estate.15 According to the Claimants, Sunlodges Tanzania has never held any assets other than the Estate and other ancillary assets (such as livestock, farm machinery and vehicles) used in the Estate’s business.16
60.
Ms Sally Perry ("Ms Perry") is a shareholder and director of Sunlodges Tanzania, and Mr Paglieri's partner since 1994.17
61.
Mr Ali Maawiya ("Mr Maawiya") is also a shareholder and director of Sunlodges Tanzania, and Mr Paglieri's assistant.18
62.
The Claimants have provided the organogram below which represents the Claimants' structure and ownership as at 1 August 2011.19 According to the Claimants, it is still valid.20
63.
The Respondent denies that (i) Mr Paglieri holds Italian nationality as required by the Treaty to bring a treaty claim; and (ii) Mr Paglieri holds a managerial position in Sunlodges BVI.21

2.The Respondent and related Entities

64.
The following emanations of the Respondent are referred to in the Parties’ submissions as being involved in this dispute:

(a) The Mtwara District Council is the local governmental entity with jurisdiction over the area where the Estate is located,22 and is headed by a Chairman, with a District Executive Director acting as secretary;23

(b) The Commissioner for Lands is "the principal administrative and professional officer of, and adviser to, the Government [of Tanzania] on all matters connected with the administration of land;"24 and is assisted by a Deputy Commissioner for Lands and one or more Assistant Commissioners;25

(c) The Tanzania Investment Centre (the "TIC") is defined in the Tanzania Investment Act, 1997 (the "Tanzania Investment Act") as a "one-stop centre for investors [that] shall be the primary agency of Government to co-ordinate, encourage, promote and facilitate investment in Tanzania and to advise the Government on investment policy and related matters,"26 and is empowered, inter alia, to grant certificates of incentives to investors27 entitling them to tax and tariffs incentives;28

(d) The Special Committee appointed by the Permanent Secretary for the Ministry of Lands, Housing and Human Settlement Development (the "Special Committee") was tasked with inspecting the development of the Estate in July 201129 following allegations from several Tanzanian state instrumentalities that the Claimants were in breach of the conditions stipulated in the Certificates of Title and Rights of Occupancy covering the Estate;30

(e) Tanzania’s Chief Valuer is responsible, inter alia, for verifying "every assessment of the value of land and unexhausted improvement for the purposes of payment of compensation by Government or Local Government authority;"31 and

(f) The High Court of Tanzania (the "High Court") holds "jurisdiction to hear every matter" where the "Constitution or any other law does not expressly provide that any specified matter shall first be heard by a court specified for that purpose;"32 and section 167(1) of the Land Act includes the High Court among the courts vested with exclusive jurisdiction to hear and determine all manner of disputes, actions and proceedings concerning land.33

3. Dangote Industries Limited

65.
Dangote Industries Limited ("Dangote Industries") is a Nigerian company34 ultimately owned by Mr Aliko Dangote,35 a Nigerian national36 and one of the world’s largest cement producers.37 Following the revocation of the Claimants’ title over the Estate in 2011, Dangote Industries leased a large portion of the Estate from the Tanzania Investment Centre38 on 30 July 201239 and completed building a cement factory on its grounds in 2015.40
66.
According to the Claimants, Dangote Industries had been interested in building a cement factory in the Estate since 200841 owing to the existence of limestone on its grounds42 (which is a key input for cement production).43 In the Claimants’ submission, Tanzania was aware of that interest and had granted a prospecting license to Dangote Industries covering part of the Estate.44 The Claimants argue that the revocation of their Rights of Occupancy over the Estate was a pretext to allocate the Estate to Dangote Industries.45 The Respondent denies the Claimants' allegation.46

B. The Estate

1.Location and Characteristics of the Estate

67.
The Claimants have provided the following map of the region surrounding the Estate:47
68.
The Estate is located on the east coast of Tanzania, in the region of Mtwara, which is the southern region closest to the border with Mozambique.48 Part of the eastern boundary of the Estate extends to the shore of Mikindani Bay and the Indian Ocean.49 It covers an area of 5,277 hectares (52.77 km²).50
69.
The closest town to the Estate is Mikindani, which is located two kilometres to the south east.51 Mtwara is a larger town with a deep harbour port and is located seven kilometres to the south east.52 The town of Lindi is located 98 kilometres to the north of the Estate, and the sealed public road between Lindi and Mtwara runs through the southern portion of the Estate.53
70.
There are limestone deposits below the surface of the Estate.54 According to the Claimants, this is the main reason behind Dangote Industries’ interest in the Estate as the 500 tonnes of limestone reserves in the Estate could maintain a cement factory for 149 years.55
71.
The area off the Mtwara and Lindi coasts is rich in natural gas and has garnered interest from several international oil companies.56 A gas pipeline connecting Dar es Salaam and Mtwara was completed in April 20 1 5.57 Exploration for oil and gas was conducted on the Estate and its surrounding area in 2007 by a company called Ndovu.58

2. The Claimants’ title to the Estate

72.
According to the Claimants, the Estate "is comprised of contiguous parcels of land covered by the Certificates of Title, Rights of Occupancy and what are known as ‘Eps’."59 They are listed in the following table:60

Table 1 - Titles to the Estate

Certificate of TitleRight ofOccupancyTermArea ha (acres)
1. 276936 7877 99 years from 13 August 1934 (expires 12 August 2033) 823.11 (2,034)
2. 355037 8543 99 years from 15 August 1936 (expires 14 August 2035) 321.3 (794)
3, 398538 (encompassing EPs39: 585a; 585b; 587; 1059; 1064) 311, 2662, 2664 99 years from 1 July 1963 (expires 30 June 2062) 3,043.16 (7,519.96)
4. 1550140 21272 99 years from 1 January 1963 (expires 31 December 2062) 1,090.2 (2,694)

[Statement of Claim, para. 21, footnotes omitted]

73.
The Rights of Occupancy (but not the Certificates of Title) stipulate that the land be used solely for "agricultural purposes."61
74.
On 1 October 1997, Sunlodges Tanzania entered into an agreement with the Receiver of Karimjee Agriculture Limited (Coopers & Lybrand) (the "Receiver") for the sale and purchase of the business, Rights of Occupancy, and other assets that comprise the Estate for a purchase price of USD 175,000.62 Mr Paglieri provided the necessary funds for Sunlodges Tanzania for purposes of the transaction.63
75.
After obtaining approval from the relevant Tanzanian authorities to effect the transaction,64 on 11 May 1998, the Receiver conveyed to Sunlodges Tanzania, free of any encumbrances, the title deeds to the Estate.65 The relevant entries were made in the Land Registry on 10 July 1998, confirming Sunlodges Tanzania as the registered owner.66
76.
The Claimants contend that, until the alleged expropriation of the Estate took place, the Respondent had never contested Sunlodges Tanzania's ownership over the Estate as a matter of Tanzanian law67 (which they consider was also confirmed by Tanzanian courts in local court proceedings).68

C. Development of the Estate

1.Undisputed Facts

77.
After purchasing the Estate, the Claimants undertook several infrastructure projects on its grounds, including building an electric fence surrounding a large portion of the Estate, an airstrip and a 33-kilometre road around the perimeter of the property.69
78.
Immediately prior to its acquisition by the Claimants, the Estate was being used for the cultivation of sisal70 and cashew nuts and the rearing of a herd of 450 head of cattle.71 At the time, the Estate was poorly maintained and underutilized72 and most of the sisal plants were close to the end of their productive life.73 The Claimants initially rationalized the sisal corps and grew cashew nuts and maize,74 but had to discontinue the cultivation of cashew nuts and maize due to the presence of squatters.75 The cultivation of sisal stopped in 2000 owing to its non-competitive production costs.76
79.
The Claimants then decided to focus on the breeding and rearing of cattle,77 and submitted an application to the TIC for a Certificate of Incentives for this purpose,78 together with a business plan (the "Business Plan").79 The TIC issued Sunlodges Tanzania the First certificate of incentives (the "First Certificate of Incentives") in May 2003 "[t]o diversify Sisal Estate into cattle ranch and maize farm," entitling Sunlodges Tanzania to certain tax and tariffs incentives until March 2006.80 Following submission of two progress reports by the Claimants to the TIC relating to the First Certificate of Incentives (together, the "Progress Reports"),81 a second certificate of incentives was issued in September 2006, extending the incentives for an additional year82 (the "Second Certificate of Incentives"; together with the First Certificate of Incentives, the "Certificates of Incentives").
80.
As noted below, the Parties attach different significance to the Business Plan and the Certificates of Incentives, and also disagree as to the extent to which the Claimants’ activities in the Estate until the Claimants’ title was revoked in 2011 complied with the terms of the Rights of Occupancy, the Certificates of Incentives and the Business Plan.83

2. The Claimants’ Position

81.
First, the Claimants note that investors must obtain a certificate of incentives if they wish to receive the benefits that these confer, but they are under no obligation to obtain one.84 Further, the use of land permitted pursuant to a certificate of incentives continues after its expiry, even if the granting of incentives does not.85 According to the Claimants, the Business Plan does not contain any promises regarding how the Estate was to be developed; it was merely a plan.86
82.
Second, the Claimants reject the Respondent’s contention that "what they sought to achieve pursuant to the first and second Certificates of Incentives [] and the [Business Plan] was a failure or that the conditions (unspecified by Tanzania) of the Certificates of Incentives were not adhered to."87 In particular, the Claimants reject the Respondent's contention that the Estate was in a state of abandonment at the time at which Sunlodges Tanzania's title to the Estate was revoked.88
83.
In support of their position, the Claimants rely in particular on a series of daily reports produced between the years 2003 and 2011 (the "Daily Reports")89 in which they recorded their activity in the Estate for management purposes.90 According to the Claimants, the Daily Reports show that the cattle operations continued until the Estate was expropriated in 2011,91 at which time they had increased the herd from 450 to approximately 700 head of cattle92 and were providing employment for between thirty-five to forty people per day.93
84.
The Claimants also consider that the Respondent misrepresents the content of the Progress Reports.94 In their view, the first Progress Report shows that any delays in progress were due to the Respondent's conduct,95 while the second Progress Report (of which they claim the Respondent has provided an incomplete copy) "is more upbeat" than Tanzania claims.96
85.
In the Claimants' view, the granting of a second Certificate of Incentives by Tanzania in 2006 also confirms that the Respondent was satisfied with Sunlodges Tanzania's progress in the Estate.97
86.
The Claimants also contend that their efforts to persuade the Government of Tanzania to permit the development of the Estate for touristic purposes were unsuccessful,98 and reject the Respondent's allegation that a game sanctuary was established in the Estate.99 According to the Claimants, the Estate was used at all material times for agricultural purposes,100 and, until its expropriation, the Estate had:

...the usual infrastructure that is found on commercial agricultural operations in East Africa, including some irrigation, troughs, boreholes, six windmills imported from South Africa (to distribute water across the farm), a homestead, accommodation for managers and employees, workshops, fencing, roads, vehicles and agricultural equipment[…]101

87.
The Claimants further allege that their operations in the Estate were hampered at different times by the presence of squatters who stole crops and cattle and sabotaged equipment; and claim that the Mtwara District Council failed to take any effective action against them.102 The Claimants reject the Respondent’s allegation that the previous owner invited the squatters, and argue that there is no evidence on record to support the contention.103
88.
The Claimants do not deny the presence of wild animals in the Estate, but note that the land forms part of their natural territory. Indeed, it would have been illegal to kill most of the breeds under Tanzanian law and they could not pose a threat to anyone, given that the Estate had been enclosed by an electric fence since 2004.104
89.
Finally, according to the Claimants, Sunlodges Tanzania’s operating costs in the Estate were funded by way of loans from Sunlodges BVI, which in turn received the funds from Mr Paglieri.105 As of September 2011, the outstanding loan from Sunlodges BVI to Sunlodges Tanzania was TZS 3,061,977,000 (the "Sunlodges BVI Loan").106

3. The Respondent’s Position

90.
The Respondent asserts that, in acquiring the Certificates of Incentives, the Claimants committed to implement their Business Plan between 2004 and 2010. According to the Respondent, the Business Plan required the Claimants to:

[...] increase 300 cattle to 1500 cattle and to produce quality beef; invest heavily in new bulls and implementing an Artificial Insemination Programmes (AIP); completely upgrade the cattle handling equipment and facilities including night bomas, adequate shaded and protected cattle shelters and improve Artificial Insemination facilities of bulls; employ skilled expertise to manage the estate arid and the AIP; establish Game ranching; construct boreholes in dry seasons; construct modern butchery with modern refrigerated cold rooms and stores together with handling facilities; cultivate maize for supplementary feeding program for the cattle; and reforestation of various indigenous species with vegetable improvements.107

91.
The Respondent contends that the Claimants failed to comply with the conditions attached to the Rights of Occupancy and the Certificates of Incentives, as well as to abide by the commitments they made in the Business Plan,108 by (i) changing the use of the land into a "game sanctuary;"109 (ii) failing to grow agricultural crops;110 and (iii) failing to benefit the local community from the project.111
92.
The Respondent also points to several excerpts of the Progress Reports112 which in its view show that the Claimants had failed to commence their project according to the agreed schedule of the Business Plan.113 In particular, the Respondent argues that, according to the Progress Reports, there was a development of less than 2% of the Estate (planting of grass in 100 hectares out of 5,227.8 hectares) and an admission of inability to grow any crops.114
93.
The Respondent also notes that under Tanzanian law, an investor is required to submit progress reports to TIC at least every six months during the period of project implementation, while the Claimants only submitted two Progress Reports to TIC during the period 2003 to 2011.115 Further, the Respondent claims that Tanzania granted an extension of time for Sunlodges Tanzania to implement the Business Plan in light of its failure to start implementing its project within two years as required by the law and in order to avoid the nullification of the First Certificate of Incentives.116
94.
The Respondent further claims that the Claimants had abandoned the land and had allowed the proliferation of bushes harbouring wild animals that threatened the villages surrounding the Estate.117
95.
The Respondent concedes that there were squatters present in the Estate, but notes that they were lawfully invited by the previous owner of the Estate and, in any event, it was the Claimants who had a duty to remove them from their land.118
96.
As to the loan from Sunlodges BVI to Sunlodges Tanzania, the Respondent argues that there is no evidence on record to show that this loan exists.119

D. Notices of Revocation

1.Correspondence prior to the Notices of Revocation

97.
On 18 October 2005, the District Executive Director of Mtwara District Council sent a letter to Sunlodges Tanzania, noting that the Estate had been transferred to the Second Claimant and requesting information regarding its programme and objectives for the Estate.120
98.
The Claimants state that they are unaware as to whether they replied to that letter.121 They argue that, in any event, they had no obligation to reply, given that at that time they had already applied for and been granted the First Certificate of Incentives.122 In the Claimants’ submission, pursuant to sections 16(1) and 16(2) of the Tanzania Investment Act, they were not required to do anything further in relation to use of the Estate as a cattle ranch and maize farm.123
99.
In contrast, the Respondent submits that the Certificates of Incentives did not exempt the Claimants from obtaining the necessary approvals and, in particular, from communicating with local governmental authorities where the Estate is located regarding the better use of the Estate.124
100.
According to the Respondent, on 28 April 2010, a letter was sent to Sunlodges Tanzania concerning a complaint about the presence of dangerous animals in the Estate.125 The Claimants dispute having received that letter.126
101.
On 28 December 2010, Sunlodges Tanzania received a letter sent on behalf of the District Executive Director of the Mtwara District Council.127 The letter referred to the alleged complaint set out in the earlier letter of 28 April 2010 and requested Sunlodges Tanzania to appear in the Director's office on 6 January 2010.128
102.
On 31 December 2010, Sunlodges Tanzania responded to the letter from the Mtwara District Council of 28 December 2010. In the letter, the Second Claimant denied having received any letter on 28 April 2010 and enquired "what, (if any), article of the Land Act empowers a Land Officer to summon a land owner to his offices."129
103.
On 7 January 2011, Sunlodges Tanzania received a letter sent on behalf of the District Executive Director, asserting, inter alia, that the development of the Estate contravened the condition stipulated in the Certificate of Title to develop the land for agricultural purposes.130
104.
On 18 January 2011, Sunlodges Tanzania replied to the 7 January 2011 letter from the District Executive Director.131 In the letter, Sunlodges Tanzania confirmed that it was conducting agricultural activities in the Estate, but also noted that these activities were hampered by thefts and other criminal activity.132
105.
By letter dated 26 January 2011, the District Executive Director’s office noted that it was writing to Sunlodges Tanzania for the third time without response, and requested to visit the Estate before 31 January 2011.133
106.
By letter dated 31 January 2011, Sunlodges Tanzania replied to the 26 January 2011 letter from the District Executive Director.134 It requested that matters be resolved by correspondence instead of in-person meetings, given that Sunlodges Tanzania’s directors were not present in Tanzania at that time, and enquired again about the legal basis for the District Executive Director to summon a land owner to a meeting.135
107.
On 18 February 2011, the Acting District Executive Director wrote to the Commissioner for Lands, noting that Dangote Industries was interested in building a cement factory in part of the Estate.136 The letter affirmed that the land "ha[d] not been used in accordance to the law for 47 years" and that this had resulted in the apparition of dangerous animals that threatened and had killed residents.137 The Acting District Executive Director stated:

[7] Given that the larger portion of the requested land is C.T. 15501, we appeal to your office to advise the President to retrieve it (part acquisition).

[8] Furthermore, we recommend to take a section of the land belonging to Sunlodges Tanzania Ltd whose Title deed is dated 09-04-1964, meant for agriculture.138

2. The Alleged Prior Inspection of the Estate

108.
According to the Respondent, on 2 May 2011, prior to the issuance of the Notices of Revocation, an Authorized Officer of Mtwara District Council conducted an inspection of the Estate to determine the extent of development of the land and compliance with the conditions provided for in the Rights of Occupancy (the "May 2011 Inspection").139 The Respondent claims that, following the May 2011 Inspection, the Authorized Officer found that the conditions of the Rights of Occupancy of the Estate had been breached,140 and set out his conclusions in an inspection report (the "Inspection Report of May 2011")141 that would later be submitted to the Commissioner for Lands together with a proposal for revocation of Sunlodges Tanzania’s Rights of Occupancy of the Estate.142
109.
The Claimants deny that the May 2011 Inspection ever took place,143 and dispute the authenticity of the Inspection Report of May 2011.144

3.Notices of Revocation

110.
On 12 May 2011, Sunlodges Tanzania was served a notice of revocation dated 9 May 2011 in relation to right of occupancy 7877 (under Certificate of Title No. 2769) and right of occupancy 21272 (under Certificate of Title No. 15501) (the "First Notice of Revocation").145
111.
The First Notice of Revocation was issued under section 48 of the Land Act "for breach of conditions contained in the Certificate of Title namely; (i) Abandonment of the land and failure to develop the farm as per conditions stipulated in the certificate of title."146
112.
On 8 June 2011, Sunlodges Tanzania was served with four further notices of revocation (all dated 7 June 2011):

(a) The second notice of revocation concerned right of occupancy 2662 (one of the three Rights of Occupancy under Certificate of Title No. 3985) (the "Second Notice of Revocation");147

(b) The third notice of revocation concerned right of occupancy 2664 (one of the three Rights of Occupancy under Certificate of Title No. 3985) (the "Third Notice of Revocation");148

(c) The fourth notice of revocation concerned EP 585a (one of the land plots covered by one of the three Rights of Occupancy under Certificate of Title No. 3985) (the "Fourth Notice of Revocation");149 and

(d) The fifth notice of revocation concerned EP 585b (one of the land plots covered by one of the three Rights of Occupancy under Certificate of Title No. 3985) (the "Fifth Notice of Revocation, and, together with the First, Second, Third and Fourth Notices of Revocation, the "Notices of Revocation").150

113.
The Second, Third, Fourth and Fifth Notices of Revocation were issued under section 48 of the Land Act "for breach of conditions contained in the Certificate of Title namely; (i) Abandonment of the land and failure to develop the farm as per conditions stipulated in the certificate of title."151

4.Correspondence following the Notices of Revocation

114.
By letter dated 8 June 2011, Sunlodges Tanzania wrote to the Commissioner for Lands objecting to the First Notice of Revocation and requesting its withdrawal.152
115.
By letter dated 16 June 2011, the Tanzanian lawyers of Sunlodges Tanzania wrote to the Authorised Officer (Land Officer) of Mtwara District.153 The letter, inter alia, (i) denied the alleged abandonment of the Estate; (ii) affirmed that there had been no "land use assessment" nor any warning letter issued prior to the Notices of Revocation; (iii) argued that the revocation procedure had not followed due process and was contrary to article 24 of the Constitution of Tanzania; and (iv) requested that the Notices of Revocation be withdrawn.154
116.
By letter dated 4 July 2011, the Authorised Land Officer acknowledged receipt of Sunlodges Tanzania’s 16 June 2011 letter and announced that a reply would follow soon.155 According to the Claimants, no such reply was ever received.156
117.
By letter dated 22 July 2011, the District Executive Director of Mtwara District Council informed Sunlodges Tanzania that a Special Committee had been appointed to inspect the development of the Estate "as per the conditions stipulated in your title."157 Sunlodges Tanzania was informed that the Special Committee would visit the Estate on 25 July 2011 and that they were required to be present and to assist the Committee during the inspection.158
118.
On 25 July 2011, the Special Committee inspected the Estate.159 The Parties’ accounts of the inspection and its implications differ in significant respects:

(a) The Claimants allege that the Special Committee included "people who had been lobbying for Mr Dangote and his companies to be given the Estate."160 The Claimants also argue that the Special Committee’s inspection shows that the Notices of Revocation had been issued absent a prior inspection of the Estate.161 This is confirmed, in the Claimants’ view, by the fact that none of the members of the Special Committee made any reference to the existence of a prior inspection,162 and that, when confronted about this by Mr Paglieri, one of the members merely replied that "[w]e could have inspected the farm by helicopter."163 The Claimants also submit that one of the members of the Special Committee spoke with Mr Paglieri at the end of their inspection and told him "[d]o not worry, the farm has not been abandoned. We are together on this one."164 The Claimants finally complain that they were not given the opportunity to make any submissions to the Special Committee,165 nor were they provided with any report recording their findings and conclusions.166

(b) In the Respondent’s submission, the Special Committee’s inspection does not serve as proof that a prior inspection did not take place.167 The Respondent also considers that the answer given to Mr Paglieri by the Chairman of the Special Committee indicates that a prior inspection was conducted and that it was not necessary for Mr Paglieri or the Claimants to be informed beforehand.168 The Respondent finally denies that Mr Paglieri received any assurances from any of the members of the Special Committee,169 and notes that the Special Committee did not have final authority on the matter.170

119.
Following its inspection of the Estate, the Special Committee prepared a report, which was submitted to the authorized officer for official use (the "Special Committee Inspection Report").171
120.
On 20 September 2011, the Commissioner for Lands informed Sunlodges Tanzania that its Certificates of Title Nos. 15501, 2769, 3550 and 3985 had been revoked following a Presidential declaration on 6 September 2011 "due to violation against terms and conditions of ownership" (the "Revocation Decision").172
121.
On 23 September 2011, the Official Gazette of the United Republic of Tanzania (the "Gazette") published the revocation of land title ownership over the Mikindani Estate as Government Notice No. 755.173

E. Judicial Review proceedings

122.
On 10 October 2011, Sunlodges Tanzania applied to the High Court for permission to proceed with an application for judicial review, which in turn would have sought an order of certiorari (a quashing order) regarding the Revocation Decision (the "Judicial Review Proceedings").174 The respondents in the Judicial Review Proceedings were: (i) the Minister of Lands, Housing and Human Settlement Development; (ii) the Commissioner for Lands; (iii) the District Executive Director of Mtwara Council; and (iv) the Attorney General of Tanzania.175
123.
The grounds put forward by Sunlodges Tanzania in support of its application to the High Court can be summarized as follows: (i) the revocation process was predetermined, given that the Respondent had already resolved to allocate the Estate to a third party;176 (ii) the ground for revocation invoked by the Respondent was a pretext to achieve a pre-determined decision;177 (iii) the rules of natural justice were breached during the procedure resulting in the revocation of its Rights of Occupancy;178 (iv) the President decided to revoke the Rights of Occupancy on 6 September 2011, while the ninety-day period for the Notices of Revocation to come into effect would not have lapsed until 7 September 2011;179 and (v) the Commissioner for Lands failed to give Sunlodges Tanzania an opportunity to remedy any breach by failing to issue a warning letter before issuing the Notices of Revocation.180
124.
As part of the first stage of the Judicial Review Proceedings, Sunlodges Tanzania also sought an injunction to prevent its eviction from the Estate while the Judicial Review Proceedings were pending.181 By order dated 13 October 2011, Mziray J, the judge assigned to the Judicial Review Proceedings ordered that the "[s]tatus quo be maintained" (the "Interim Injunction").182
125.
By letter dated 30 October 2011, the District Executive Director of Mtwara District Council notified the Revocation Decision to several Ward Executive Officers and village executives.183 The letter also noted that:

[…] the project for the construction of the Cement Factory has taken off already [...] Surveyors and other land experts from the Ministry of Lands, Housing and Hman [sic] Settlements are now engaged in the survey and mapping of the various sites where the envisaged factory is to be constructed.184

126.
According to the Claimants, through its failure to mention the Interim Injunction, the letter conveyed the wrong impression that the Estate could be freely used and occupied.185 The Claimants argue that the placement of surveyors in the Estate by the Respondent constituted a breach of the Interim Injunction.186
127.
The Claimants also allege that, following the 30 October 2011 letter, people from the nearby villages entered the Estate, destroying part of its surrounding electric fence, and killed cattle.187 Sunlodges Tanzania filed a complaint relating to the matter before the High Court.188 According to Mr Paglieri, the police sometimes refused to record the Claimants’ complaints and arrested many people employed at the Estate.189
128.
By letter dated 1 November 2011, the District Executive Director of Mtwara Council informed Sunlodges Tanzania about (i) the envisaged construction of a road that would pass through the Estate; and (ii) the removal of the electric fence surrounding the Estate, which had been "cut off to ensure safety for the surveying team."190
129.
On 17 November 2011, Sunlodges Tanzania filed an application before the High Court requesting a declaration that the District Executive Director of Mtwara Council was in contempt of the Interim Injunction (the "First Contempt Application").191
130.
On 23 November 2011, Sunlodges Tanzania informed Dangote Industries about the Interim Injunction and requested that their employees abstain from entering or interfering with the Estate.192
131.
By letter dated 25 November 2011, the Acting Regional Administrative Secretary of the Mtwara Regional Commissioner Office informed Dangote Industries that "the Regional Commissioner has granted you leave to enter in the said area [the Estate] to undertake preliminary site clearance and linked prospecting activities in accordance with to [sic] your Prospecting License issued by the Minister of Energy and Minerals."193
132.
On 1 December 2011, Mziray J granted the Respondent’s request for an extension of time to file its Counter Affidavits and ordered that the status quo be extended.194 According to the Claimants, around the same date, the Respondent placed "land beacons" on the Estate for the benefit of Dangote Industries,195 and Dangote Industries started to physically subdivide the Estate.196
133.
On 7 December 2011, the Assistant Commissioner for Lands decided to designate the Estate "for Industrial and Mining purposes only."197 This decision was published in the Gazette on 20 January 2012.198 According to the Claimants, this decision sought to prevent the Claimants from continuing their activities on the Estate and to allow Dangote Industries to build its cement factory, thus constituting a breach of the Interim Injunction.199
134.
On 9 February 2012, Sunlodges Tanzania filed an application before the High Court requesting a declaration that the Regional Commissioner of Mtwara Region was in contempt of the Interim Injunction (the "Second Contempt Application").200
135.
On 27 April 2012, the Attorney General sent a letter to the Permanent Secretary of the Ministry of Land, Housing and Housing Development and to the Director of the Mtwara District Council stating that "we agreed that both sides should follow the orders of the Court to leave the area as it was in order to enable the Court proceed with the basic case."201
136.
According to the Claimants, Sunlodges Tanzania decided to withdraw the First and Second Contempt Applications after the Attorney General purportedly "promised on or about 25 April 2012" that no further acts of contempt would be committed.202 The Claimants argue that, in its letter of 27 April 2012, the Respondent effectively admitted having breached the Interim Injunction.203 In contrast, the Respondent denies that the Attorney General would have conceded that the Government was in breach of the Interim Injunction,204 and considers that the said letter merely advised the parties to adhere to the court orders and advised Sunlodges Tanzania to withdraw the Contempt Applications to allow the court to proceed with the "substantive Application."205
137.
On 23 July 2012, the High Court (Mziray J) issued its judgment in the Judicial Review Proceedings (the "Judicial Review Judgement"). The Judicial Review Judgement concluded, inter alia, that "the applicant’s allegations are hereby found to be plain, hopeless and unmeritorious ones as a result the applicant has miserably failed to sufficiently establish an arguable prima facie case of reasonable suspicion worthy of scrutiny of this court at the second stage."206 Accordingly, Sunlodges Tanzania’s application for permission to apply for orders of certiorari and prohibition was dismissed.207

F.Valuation of the Estate

138.
In October 2011, the Claimants commissioned Messrs Sultan Mundeme and James Swilla of GimcoAfrica Limited ("GimcoAfrica") to determine the compensation resulting from the revocation of their Rights of Occupancy over the Estate (the "GimcoAfrica Valuation Report").208
139.
GimcoAfrica inspected the Estate for valuation purposes on 9 October 2011.209
140.
By letter dated 30 July 2012, the Assistant Commissioner for Lands recalled the dismissal of Sunlodges Tanzania’s application for judicial review and noted that, as per article 49(3) of the Land Act, Sunlodges Tanzania was entitled to compensation.210 Sunlodges Tanzania was informed that the valuation process was expected to start on 2 August 2012, and that they were to be present and cooperate during the valuation process.211
141.
On 2 August 2012, Tanzania’s valuers visited the Estate for valuation purposes.212 According to Mr Paglieri, Tanzania never conveyed to the Claimants any report that may have resulted from this visit.213
142.
The Claimants presented the GimcoAfrica Valuation Report to Tanzania’s Chief Valuer in 2012. The report was initially rejected because it included a valuation for moveable assets which, according to Tanzania’s Chief Valuer, were not compensable under Tanzanian law.214
143.
GimcoAfrica then amended its Valuation Report to exclude moveable assets ("(Amended) GimcoAfrica Valuation Report") and it was presented again to Tanzania’s Chief Valuer.215 The (Amended) GimcoAfrica Valuation Report valued the Estate at TZS 49,695,000,000; according to the same report, this corresponded to USD 30,118,180.216
144.
On 16 August 2012, Tanzania’s Chief Valuer stamped the (Amended) GimcoAfrica Valuation Report, the stamp stating "valuation accepted."217
145.
Following the 2 August 2012 inspection of the Estate, the Valuation Section of Mtwara District Council prepared two valuation reports, dated 27 August 2012 (the "Government Valuation Reports").218 The Government Valuation Report regarding compensation for the revocation of Certificates of Title No. 3550 and No. 3985 estimated that the "fair total compensable value for the said unexhausted improvements to the named above titles is [...] TZS 334,397,540."219 The Government Valuation Report regarding compensation for the revocation of Certificates of Title Nos. 15501 and 2769 estimated that the "fair total compensable value for the said unexhausted improvements to the named above titles is [...][TZS] 962,518,960."220

IV. THE DOMESTIC LEGAL BACKGROUND

A. Rights of Occupancy under Tanzanian Law

146.
This Section provides an overview of the Tanzanian regulations concerning Rights of Occupancy and summarizes the Parties’ divergent positions regarding the extent to which the revocation of the Claimants’ title over the Estate complied with those regulations.

1.Undisputed Legal Background

(a) Introduction

147.
Pursuant to the Freehold Titles (Conversion) and Government Leases Act (1963), all freehold titles were converted into leasehold titles for a term of ninety-nine years. Such leasehold titles were known as "Government leases."221
148.
The Government Leaseholds (Conversion to Rights of Occupancy) Act (1969) extinguished all Government leases.222 Pursuant to this Act, leaseholders would hold the land previously held under a Government lease under a right of occupancy for a term equal to the unexpired Government lease.223
149.
The two main Acts regulating the question of ownership of land in Tanzania are the Land Act, 1999 (the "Land Act") and the Village Land Act No. 5, 1999.224
150.
Section 32 of the Land Act fixes the term for which a right of occupancy may be granted.225 The holder of a right of occupancy is required to pay annual rent.226 Pursuant to the Land Act, persons granted a right of occupancy shall be issued a "certificate of occupancy" by the Commissioner for Lands.227
151.
Regarding the ownership of land by non-citizens,228 section 20 of the Land Act provides as follows:

(1) For avoidance of doubt, a non-citizen shall not be allocated or granted land unless it is for investment purposes under the Tanzania Investment Act.

(2) Land to be designated for investment purposes under subsection (1) of this section shall be identified, gazetted and allocated to the Tanzania Investment Centre which shall create derivative rights to investors.

(3) For the purposes of compensation made pursuant to this Act or any other written law, all lands acquired by non-citizens prior to the enactment of this Act, shall be deemed to have no value, except for unexhausted improvements for which compensation may be paid under this Act or any other law.

(4) For the purposes of this Act, any body corporate of whose majority shareholders or owners are non-citizens shall be deemed to be noncitizens or foreign company’s [sic].

(5) At the expiry, termination or extinction of the right of occupancy or derivative right granted to a non-citizen or a foreign company, reversion of interests or rights in and over the land shall vest in the Tanzania Investment Center or any other authority as the Minister may prescribe in the Gazette.229

(b) Conditions of Rights of Occupancy

152.
The Land (Conditions of Rights of Occupancy) Regulations, 2001 (the "Conditions of Rights of Occupancy Regulations") provide in relevant part as follows:

7. Every right of occupancy of land for agricultural purposes shall be subject to the terms and conditions to the following effect, namely:-

(a) that the occupier will during the first year of the term of the right of occupancy fully cultivate one eighth of the total area of the arable land subject to the right of occupancy to the satisfaction of the Commissioner and during each of the next four years of such term will fully cultivate a further one-eighth of the total area of such arable land in the like manner as aforesaid;

(b) that the occupier will at all times during the term of the right of occupancy have and maintain fully cultivated to the satisfaction of the Commissioner all areas which he is required to cultivate under condition (a) set out in this regulation amounting, in the fifth year of such term and thereafter, to five-eighths of such arable lands.

[...]

9. Every right of occupancy of land for mixed agricultural and pastoral purposes shall be subject to the terms and conditions to the following effect, namely-

(a) that the occupier will during the first year of the term of the right of occupancy fully cultivate one-fiftieth, and fully stock with his own cattle one-tenth of the total area of the land subject to the right of occupancy to the satisfaction of the Commissioner, and during each of the next four years of such term will fully cultivate a further one-fiftieth, and wilfully stock with his own cattle a further one-tenth of the total area of such land in like manner as aforesaid;

(b) that the occupier will at all times during the term of the right of occupancy:

(i) have and maintain fully cultivate to the satisfaction of the Commissioner all areas which he is required to cultivate under condition (a) set out in this regulation amounting in the fifth year of such term and thereafter to one-tenth of the total area of the land to which the right of occupancy relates; and

(ii) have and maintain fully stocked with his own cattle to the satisfaction of the Commissioner all areas which he is required so to stock under condition (a) set out in this regulation amounting in the fifth year of such term and thereafter to one-half of the total area of the land to which the right of occupancy relates.230

(c) Revocation of Rights of Occupancy

153.
The Land Act provides that rights of occupancy may be revoked by the President in case of breach of any conditions under which a right of occupancy is granted.231 Section 45(2) of the Land Act provides that the President shall not revoke a right of occupancy save for "good cause", which includes the following scenarios:

(i) there has been an attempted disposition of a right of occupancy to a non-citizen contrary to this Act and any other law governing dispositions of a right of occupancy to a non-citizen;

(ii) the land the subject of the right of occupancy has been abandoned for not less than two years;

(iii) where the right of occupancy is of land of an area of not less than five hundred hectares, not less than eighty per centum of that area of land has been unused for the purpose for which the right of occupancy was granted for not less than five years;

(iv) there has been a disposition or an attempt at a disposition which does not comply with the provisions of this Act;

(v) there has been a breach of a condition contained or implied in a certificate of occupancy;

(vi) there has been a breach of any regulation made under this Act.232

154.
Apart from these scenarios, Section 45(3) of the Land Act also establishes that the President may in any event "revoke a right of occupancy if in his opinion it is in the public interest to do so."233
155.
Revocation by the President is premised on a recommendation from the Commissioner for Lands.234 Pursuant to section 45(4) of the Land Act:

Before proceeding to take any action in respect of a breach of a condition of the right of occupancy, the Commissioner shall consider-

(a) the nature and gravity of the breach and whether it could be waived;

(b) the circumstances leading to the breach by the occupier;

(c) whether the condition that has been breached could be amended so as to obviate the breach, and shall in all cases where he is minded to proceed to take action on a breach, first issue a warning letter to the occupier advising him that he is in breach of the conditions of the right of occupancy.235

156.
Section 45(5) of the Land Act further provides:

The Commissioner may, instead of proceeding to the enforcement of the revocation -

(a) impose a fine on the occupier in accordance with section 46;

(b) serve a notice on the occupier in accordance with section 47 requiring the breach to be remedied.236

157.
Pursuant to section 48(1) of the Land Act:

Where the Commissioner is satisfied that -

(a) a notice served under section 47 has not been complied with; or

(b) the breach of condition is so serious and of far-reaching consequences that-

(i) it would not be practicable for the occupier to remedy that breach within a reasonable time; or

(ii) the occupier has demonstrated a clear unwillingness to comply with the conditions of the grant of the right of occupancy made to him;

(c) there has been an attempted disposition of a right of occupancy to a non-citizen contrary to this Act and any other law governing the disposition of a right of occupancy to a non-citizen;

(d) the land the subject of the right of occupancy has been abandoned for not less than two years;

(e) where the right of occupancy is of land of an area of not less than five hundred hectares, not less than eighty per centum of that area of land has been unused for the purpose for which the right of occupancy was granted for not less than five years;

(f) there has been a disposition or an attempt at a disposition which does not comply with the provisions of this Act;

(g) any rent, taxes or other dues remain unpaid six months after a written notice in the prescribed form was served on the occupier and subsection (8) of section 33 does not apply to the occupier,

he shall-

(i) serve a notice of revocation in the prescribed form on the occupier;

(ii) cause a copy of that notice to be served on all persons having an interest in the land; and

(iii) notify the Registrar of the service of the notice which shall be recorded in the Land Register.

158.
A notice of revocation comes into effect ninety days after its service to the occupier.237 Pursuant to section 48(3) of the Land Act, "[a]s soon as the notice of revocation has come into effect the Commissioner shall recommend to the President to revoke the right of occupancy."238
159.
Once a revocation is approved by the President, the Commissioner for Lands shall cause its publication in the Gazette and in one or more newspapers circulating in the area where the land subjected to revocation is located.239
160.
The legal effects stemming from the President’s approval of revocation are set out in section 49(2) of the Land Act. These effects include that "the right of occupancy to which it refers shall determine immediately and without further action" and that "all rights and interests in the land the subject of the right of occupancy shall revert to the President and the same shall be registered in the Land Register."240
161.
Section 49(3) of the Land Act establishes that compensation should be paid to the occupier whose right of occupancy is revoked. Such compensation "shall equal the value of unexhausted improvements made in accordance with the terms and condition of the right of occupancy on the land at the time of the revocation," minus certain amounts explicitly provided for in such provision.241

(d) Compensation for Revocation of Rights of Occupancy

162.
Section 180 of the Land Act establishes the law applicable to the adjudication of land disputes in Tanzania.242
163.
The Land (Compensation Claims) Regulations, 2001 (the "Claims Regulations") "shall apply to all applications or claims for compensation against the Government or local government authority or any public body or institution under the [Land] Act who may claim compensation."243
164.
The Claims Regulations foresee among those who may claim compensation "the holder of a granted right of occupancy [...] in respect of a right of occupancy which has been revoked under Section 49 of the [Land] Act."244
165.
Pursuant to regulation 5(1) of the Claims Regulations, the Land (Assessment of Value for Compensation) Regulations, 2001 (the "Assessment Regulations") "shall apply to any application or claim for compensation by any person occupying land."245
166.
Pursuant to regulation 5(2) of the Claims Regulations, "[w]ithout prejudice to the generality of the above, the compensation that may be claimed by any person occupying land shall be - (a) the value of unexhausted improvements on the land he is occupying; (b) grazing land."246
167.
According to the Assessment Regulations, "[t]he basis for assessment of the value of any land and unexhausted improvement for purposes of compensation under the [Land] Act shall be the market value of such land."247 The Assessment Regulations provide that every assessment of value for the purposes of the Act "shall be prepared by qualified valuer."248 Regulation 6 of the Assessment Regulations provides as follows:

Every assessment of the value of land and unexhausted improvement for the purposes of payment of compensation by Government or Local Government Authority shall be verified by the Chief Valuer of the Government or his representative.249

168.
Pursuant to the Assessment Regulations, "[c]ompensation for loss of any interest in land shall include value of unexhausted improvement, disturbance allowance, transport allowance, accommodation allowance and loss of profits."250

2.The Claimants’ Position

169.
According to the Claimants, the Commissioner for Lands must send a letter notifying the right holder of the existence of a breach as a pre-condition to taking any action in relation with a breach of a condition of a right of occupancy.251 As noted above, by letters dated 8 June 2011252 and 16 June 2011,253 Sunlodges Tanzania requested the withdrawal of the Notices of Revocation, inter alia, due to the absence of a prior warning letter.254
170.
In this regard, the Claimants disagree with the Respondent’s interpretation that a warning letter need not be issued if the alleged breach is one which cannot be remedied.255 The Claimants consider that such interpretation ignores the scheme of the Land Act and the clear language of section 45(4)(c).256
171.
The Claimants contend that the Respondent did not allege in the Notices of Revocation any "public interest" but rather claimed to act on the basis of a "good cause."257 According to the Claimants, this would imply that the Respondent did not expropriate the Estate for a public purpose.258
172.
The Claimants understand the Respondent’s position in this arbitration to be that the revocation of their Rights of Occupancy over the Estate was premised on (i) section 45(2)(ii) of the Land Act [abandonment of the land subject of the right of occupancy for not less than two years]; (ii) section 45(2)(iii) of the Land Act [in regard to land of 500 hectare or more if 80% or more of the land is unused for five years or more for the purpose for which the right of occupancy was granted]; and (iii) section 45(3)(v) of the Land Act [breach of a condition contained or implied in a Certificate of Title (but also states Certificate of Occupancy), namely to use land for agricultural purposes].259 The Claimants do not deny that these circumstances constitute "good causes" within the meaning of the Land Act,260 but claim that such circumstances have not been established in the present case.261 They also note that, in any event, they were not invoked by Tanzania in the Notices of Revocation.262
173.
Similarly, the Claimants criticize the Respondent’s reliance in this arbitration on the conditions allegedly contained in the Certificates of Incentives and the Business Plan.263 According to the Claimants, the breach of those conditions cannot constitute a "good cause" under section 45(2) of the Land Act and, accordingly, cannot be valid grounds for issuing a Notice of Revocation under section 48 of the Land Act.264 Therefore, the Claimants submit that the extent to which they achieved the objectives set out in the Certificate of Incentives and the Business Plan has no bearing to the validity of the Notices of Revocation.265
174.
The Claimants also assert that the Notices of Revocation had "obvious errors."266 In particular, the Claimants note that the Certificates of Title contradict the Notices of Revocation267 in that the former do not stipulate any "conditions" with regard to the development of the land.268 Further, they note that the Notices of Revocation did not imply that the conditions of use of the land in the certificates of Rights of Occupancy had been breached.269
175.
The Claimants also argue that the Notices of Revocation failed to set out the conditions of the certificates of occupancy that were allegedly breached with the degree of specificity required by form 11 of the Land Act (Forms) Regulation and due process.270 In particular, the Claimants point out that the Notices of Revocation did not rely on any of the "good causes" asserted by the Respondent in its Statement of Defence as a justification for the revocation.271
176.
In any event, the Claimants submit that they had not abandoned the Estate nor failed to develop it for agricultural purposes.272 In particular, the Claimants dispute that a prior inspection of the Estate ever took place, or that any such inspection could have possibly determined that the Estate was abandoned or underdeveloped.273 In this regard, the Claimants criticize the Respondent for having never mentioned the existence of the Inspection Report of May 2011 that was allegedly produced following the May 2011 inspection until it was filed with the Rejoinder.274 Further, in the Claimants’ view, Tanzania tacitly accepted their complaint regarding the lack of a prior inspection by appointing a Special Committee to inspect the Estate on 25 July 2011.275 Similarly, the Claimants note that there was no reference to the Inspection Report of May 2011 in the report allegedly produced by the Special Committee as a result of its inspection in July 2011, nor in the Judicial Review Proceedings.276
177.
In addition, the Claimants contend that the lack of advance notification by the Government of the alleged May 2011 inspection would also be a clear indication that the inspection never took place, especially as the inspections on 25 July 2011 and 2 August 2012 were preceded by notifications.277 In this sense, the Claimants submit that the author of the Inspection Report of May 2011 would not have been able to enter the Estate without the knowledge and permission of the Estate management.278
178.
Moreover, the Claimants also argue that the description of the Estate in the Inspection Report of May 2011 is very inaccurate and consider that "the only plausible conclusion is that it was written by someone who had not visited the Estate."279
179.
The Claimants further contend, relying on the Counter-Affidavit of Ms Monica Peter Otaru (Principal State Attorney of Tanzania) filed in the Judicial Review Proceedings, that the Respondent did not rely on the First Notice of Revocation to support the Revocation Decision.280
180.
Finally, the Claimants note that the Revocation Decision referred to the Certificates of Title Nos. 15501, 2769, 3550 and 3985 (all of the Claimants’ titles over the Estate) while the Notices of Revocation had only been issued in relation to the Certificates of Title No. 15501, 2769 and 3985; but not in relation to the Certificate of Title Nos. 3 5 5 0.281 This means, according to the Claimants, that the part of the Estate covered by Certificate of Title No. 3550 was revoked without having been subject of a notice of revocation.282

3. The Respondent’s Position

181.
The Respondent contends that the revocation of the Claimants’ rights over the Estate was made in accordance with section 17(8) of the Tanzania Investment Act283 and Sections 45(1), 45(3), and 48(1), (2) and (3) of the Land Act.284
182.
First, the Respondent notes that the "[c]onditions of right of occupancy are stipulated in Certificates of Occupancy whereby upon registration the owner of the estate is entitled to Certificate of Title."285 According to the Respondent, the Government decided to terminate the Claimants’ Rights of Occupancy over the Estate following the Claimants’ breach of the conditions of the Rights of Occupancy,286 which is confirmed by the Notices of Revocation.287
183.
The Respondent notes that the Rights of Occupancy required the use of the land for agricultural purposes, and asserts that the Claimants were required to apply to the Commissioner for Lands to seek a change of use if they were to develop a livestock business in the Estate.288 Further, according to the Respondent, the Certificates of Incentives did not supersede or override the terms and conditions stipulated in the Certificates of Occupancy and did not exempt the Claimants from seeking the necessary approvals.289 Further, the Respondent affirms that in order for an approved change of use to take effect, it must be endorsed on the certificate of occupancy, signed by the Commissioner with his official seal and all outstanding rent must have been paid.290
184.
In the alternative, the Respondent argues that the Claimants did not develop the land to the extent required by the law.291 In particular, the Respondent submits that the Claimants failed to abide by section 45(2)(iii) of the Land Act and Regulation 9 of the Rights of Occupancy Regulations, pursuant to which the owner of a plot of land larger than 500 hectares is required to develop 80% of the estate for a period of not less than five years.292 In the Respondent’s view, the Claimants’ claim that Sunlodges Tanzania was only required by law to develop 20% of the Estate is misplaced.293
185.
The Respondent also considers that it complied with all the required steps to effect the revocation.294
186.
First, the Respondent argues that the law does not require that an inspection be held prior to the issuance of a notice of revocation.295 Notwithstanding this, the Respondent submits that the fact that the Special Committee carried out an inspection of the Estate on 25 July 2011 does not prove that the prior inspection in May 2011 did not take place.296 The Respondent denies that the authorized officer that allegedly inspected the Estate would have been required to give prior notice to the Claimants of her visit,297 and contends that the said officer was allowed to enter the Estate without being restricted by the gateman or other workers.298
187.
According to the Respondent, the Claimants’ criticism of the Inspection Report of May 2011 is based solely on the personal perceptions of Mr Paglieri, and lacks any factual or legal support.299 The Respondent asserts that the report is authentic and denies that any relevance could be attached to the fact that it mentions the Certificates of Title in the same order as they are mentioned in the Revocation Decision.300 The Respondent also stresses that the Claimants and their lawyers did not dispute the contents of the Inspection Report of May 2011 in their letter to the Authorized Land Officer of 16 June 2011.301
188.
Second, the Respondent disputes the Claimants’ assertion that the absence of a warning letter could render the entire revocation process unlawful.302 In the Respondent’s view, it is not mandatory for the Commissioner for Lands to issue a warning letter under all circumstances.303 Thus, the Commissioner for Lands is not required by law to issue a warning letter if he or she is satisfied that the breach of conditions of the right of occupancy is grave and of far-reaching consequences.304
189.
On this issue, the Respondent argues that the Claimants’ breach of the conditions of development of the Estate was so serious that it could not be amended within a reasonable time.305 According to the Respondent, there were no signs that the Claimants could have developed the Estate in accordance with the requirements of the Land Act and the Tanzania Investment Act within that timeframe.306 The Respondent argues that, in these circumstances, and pursuant to section 45(4)(c) of the Land Act, the Commissioner for Lands was not required to issue a warning letter.307
190.
Third, the Respondent denies that the Notices of Revocation had any errors as alleged by the Claimants,308 and notes that the Notices clearly stated that Sunlodges Tanzania had abandoned the land and had failed to develop it according to the conditions of the Rights of Occupancy.309
191.
In response to the Claimants’ contention that the Revocation Decision encompassed a certificate of title (No. 3550) that had not been covered by the Notices of Revocation, the Respondent submits that the Claimants were served with Notices of Revocation in respect of all land titles revoked, including certificate of title No. 3550.310 The Respondent considers that this is confirmed by the letter from the Claimants’ lawyers of 16 June 2011 to the Authorized Land Officer of the Mtwara District Council, challenging the Notices of Revocation and also referring to Certificate of Title No. 3550.311
192.
Further, the Respondent denies that the Counter-Affidavit of the Principal State Attorney filed in the Judicial Review Proceedings would evidence, as submitted by the Claimants, that the Respondent did not rely on the First Notice of Revocation.312
193.
The Respondent also denies that the Revocation Decision was predetermined to benefit a third party.313 In particular, the Respondent considers that the letter dated 18 February 2011 from the Acting District Executive Director to the Commissioner for Lands has no bearing in this matter,314 since the Acting District Executive Director "has no legal authority in revocation of rights of occupancy."315 The Respondent claims that, as a result, the letter had no impact on the revocation of the Claimants’ Rights of Occupancy.316
194.
Finally, the Respondent notes that, after the revocation took place, the Commissioner for Lands, in the exercise of his powers under the Land Act,317 designated the Estate for investment (industrial and mining) purposes under the Tanzanian Investment Act.318 The land was allocated then to the TIC and any qualified investor could apply to invest through derivative rights.319

B. Expropriation under Tanzanian Law

1.Undisputed Legal Background

195.
Section 24 of the Constitution of Tanzania (1977) provides:

(1) Every person is entitled to own property, and has a right to the protection of his property held in accordance with the law.

(2) Subject to the provisions of subarticle (1), it shall be unlawful for any person to be deprived of his property for the purposes of nationalization or any other purposes without the authority of law which makes provision for fair and adequate compensation.320

196.
Section 22 of the Tanzania Investment Act reads:

(1) Subject to subsection (2) and (3) of this section-

(a) no business enterprise shall be nationalised or expropriated by the Government, and

(b) no person who owns, whether wholly or in part, the capital of any business enterprise shall be compelled by law to cede his interest in the capital to any other person.

(2) There shall not be any acquisition, whether wholly or in part of a business enterprise to which this Act applies by the State unless the acquisition is under the due process of law which makes provision for -

(a) payment of fair adequate and prompt compensation, and

(b) a right of access to the Court or a right to arbitration for the determination of the investors interest or right and the amount of compensation to which he is entitled.

(3) Any compensation payable under this section shall be paid promptly and authorisation for its repatriation in convertible currency, where applicable, shall be issued.321

197.
The Land Acquisition Act, 1967 (the "Land Acquisition Act") provides that "[t]he President may, subject to the provisions of this Act, acquire any land for any estate or term where such land is required for any public purpose."322 In that event, the Land Acquisition Act establishes the Government’s obligation to pay "such compensation as may be agreed upon or determined in accordance with the provisions of this Act."323

2.The Claimants’ Position

198.
The Claimants submit that Tanzania has breached the expropriation provisions in the Constitution of Tanzania and in the Tanzania Investment Act.324 In the Claimants’ view, the direct and indirect expropriations that occurred as a matter of the Italy-Tanzania BIT and customary international law were also deprivations within the meaning of section 24(2) of the Constitution and acquisitions within the meaning of section 22 of the Tanzania Investment Act.325
199.
Furthermore, the Claimants contend that those deprivations and acquisitions were unlawful under both the Constitution and the Tanzania Investment Act insofar as compensation was not paid; and also consider those deprivations to be in breach of section 22(2)(b) of the Tanzania Investment Law because Tanzania failed to provide access to the court to determine the amount of compensation.326
200.
The Claimants finally note that Tanzania did not invoke the Land Acquisition Act when revoking their Rights of Occupancy. In the Claimants’ view, this would evidence that Tanzania did not expropriate the Estate for a public purpose.327

3.The Respondent’s Position

201.
According to the Respondent, Tanzanian law does not provide a definition of the term "expropriation" or of measures of equivalent effect to direct expropriation.328 Thus, the Respondent contends, there are no criteria to determine what sort of action could amount to an indirect expropriation under Tanzanian law.329
202.
Furthermore, according to the Respondent there was nothing of value in the Estate when the Claimants’ rights were revoked, and the Claimants’ requested amount for compensation is "baseless."330
203.
The Respondent finally notes that, pursuant to section 20(3) of the Land Act, land acquired by non-citizens of Tanzania prior to the enactment of the Land Act "shall be deemed to have no value, save for unexhausted improvements for which compensation may be paid."331

C. Judicial Review under Tanzanian law

1.Undisputed Legal Background

204.
Judicial review in Tanzania "is a specialized remedy in public law by which the High Court [...] exercises a supervisory jurisdiction over inferior courts, tribunals and other public bodies."332
205.
The purpose of judicial review proceedings is to ensure that the decision being reviewed is within the limits of the powers that were granted to make it, and does not concern the correctness of the decision.333
206.
The Judicial Review Judgement lays down the two stages of judicial review:334

(a) During the first stage or threshold stage the "applicant has to seek and obtain a leave or permission to apply for judicial review."335 At this stage "[t]he court simply needs to be satisfied that the applicant has established an arguable prima facie case of reasonable suspicion worthy of scrutiny of the court at the second stage."336 The purpose of having a threshold stage is to stop "frivolous and hopeless applications."337

(b) If permission to proceed to the second stage is granted, the applicant shall file "a substantive application seeking for judicial review"338 and the court "go[es] into the depth of the matter."339

207.
An order of certiorari (a quashing order) is one of the remedies that may be obtained "where there has been an excess of jurisdiction or an ultra vires decision; a breach of natural justice; or an error of law."340 The High Court of Tanzania has discretion to decide whether or not to grant this remedy.341

2. The Claimants’ Position

208.
According to the Claimants, the Judicial Review Judgement contains the following errors of fact: (i) Sunlodges Tanzania admitted that it had not developed the land in full; and (ii) the abandonment of the land had not been not seriously disputed.342 In particular, the Claimants note that Mziray J relied in error on this second error of fact as "a reasonable and probable cause for the notice of revocation."343
209.
Furthermore, the Claimants criticize Mziray J’s ruling that the dispute, being a "purely"344 land dispute, could not be resolved by allowing an application for judicial review. The Claimants consider that their judicial review application was not meant to decide on a land dispute but to determine whether the Commissioner for Lands and the President had exceeded their powers under the Land Act when revoking their Rights of Occupancy over the Estate.345 This, according to the Claimants, falls "squarely"346 within the scope of judicial review.
210.
The Claimants also criticize the dismissal of their application for judicial review in light of the seriousness of the factual background of their application and the low threshold for granting permission to seek judicial review in Tanzania.347
211.
In response to the Respondent’s argument that the Claimants should have appealed the Judicial Review Judgement, the Claimants retort that Tanzanian law does not allow appeals on orders denying permission to apply for judicial review.348 According to the Claimants, the Respondent’s contention that such appeal was possible ignores the distinction between interlocutory and final orders, as well as section 5(2)(d) of the Appellate Jurisdiction Act.349 The Claimants also reject the Respondent’s reliance on Rule 45 of the Tanzania Court of Appeal Rules 2009,350 since this provision sets out the procedure for making an appeal but does not determine the circumstances in which an appeal may be made.351
212.
The Claimants also consider that the decision of the Tanzania Court of Appeal in Attorney General v. Wilfred Mganyi and Ors invoked by the Respondent actually supports their position that no appeal was possible against the Judicial Review Judgement.352 In that case, the Court of Appeal held that:

This Court in the Karibu Textile Mills Limited case discussed exhaustively and ruled that an application for leave to apply for the orders of certiorari, mandamus and prohibition is an interlocutory proceeding and that an appeal against such a decision would offend paragraph (d) of section 5(2) of the [Appellate Jurisdiction] Act. [...]353

213.
Hence, the Claimants submit, that Sunlodges Tanzania exhausted all possible remedies in Tanzanian courts in relation to seeking a review of the purported expropriation of the Estate.354
214.
In any event, the Claimants note, an investor is not required to exhaust local remedies as a pre-condition to bringing proceedings under a BIT.355

3.The Respondent’s Position

215.
In the Respondent’s view, the Claimants should have appealed the Judicial Review Judgment before the Court of Appeal of Tanzania if they felt aggrieved by it.356 The Respondent considers that Sunlodges Tanzania filed no such appeal because it was satisfied with the decision that was reached.357
216.
The Respondent argues that the Claimants have misinterpreted the law in claiming that Sunlodges Tanzania had no right to appeal the Judicial Review Judgement.358 According to the Respondent, under Tanzanian law, "the refusal to grant a leave to apply for a prerogative order is appealable with the leave."359 Further, the Respondent notes that the right of appeal was explained by the judge when delivering the Judicial Review Judgement.360 Thus, the Respondent alleges that Sunlodges Tanzania was made aware of the appropriate avenue of resolving any grievance.361
217.
According to the Respondent, even assuming arguendo, that the Judicial Review Judgement was not appealable, the aggrieved party would still have the right to move the appellate court to exercise its revision jurisdiction to resolve his alleged grievances.362
218.
Finally, the Respondent contends that this arbitration is not the appropriate avenue to deal with the Claimants’ dissatisfaction on matters covered by Tanzanian law that ought to be decided through the appropriate procedures of domestic law.363 Thus, the Respondent considers it unnecessary to address the errors and shortcomings alleged by the Claimants in relation to the Judicial Review Judgment.364

V. THE PARTIES’ REQUESTS FOR RELIEF

A. The Claimants’ Request for Relief

219.

In their Statement of Claim, the Claimants request the following relief:

401. For the reasons stated, the Tribunal is respectfully requested to render an award granting the following relief:

A. Declaration in Regard to Breaches of Tanzanian Law

401.1 In relation to the Claimants, declaring that Tanzania has breached the following provisions of Tanzanian Law:

401.1.1 s24(2) of the Constitution 1977;

401.1.2 ss3(1)(g), 45(2), 45(3), 45(4)(c), 48(1), 48(1)(g)(i), 48(3), 49(3) of the Land Act; and

401.1.3 s22(2) of the Investment Act 1997.

B. Declaration in Regard to MFN

401.2 In relation to the Claimants, a declaration that pursuant to Article 3(1) of the Italian BIT, they may claim the benefit of and rely on the:

401.2.1 expropriation standard in Article 6 of the Switzerland-Tanzania BIT to the extent that the expropriation standard in Article 5 of the Italian BIT is less favourable;

401.2.2 FET and FPS standards in Article 2(2) of the UK BIT to the extent that the FET and FPS standards in Article 2(2) of the Italian BIT are less favourable;

401.2.3 FET, FPS and non-impairment standards in Article 4 of the Switzerland-Tanzania BIT to the extent that the FET, FPS and non-impairment standards in Article 2(2) of the Italian BIT are less favourable;

401.2.4 National treatment standard in Article 4 of the Switzerland-Tanzania BIT to the extent that the national treatment standards in Article 3 of the Italian BIT are less favourable.

C. Declaration in Regard to Breaches of the Italian BIT

401.3 In relation to the Claimants, a declaration that Tanzania has breached the following Articles of the Italian BIT:

401.3.1 Article 5(1) by limiting the Claimants’ right of ownership, possession, control or enjoyment of their investments without lawful authority;

401.3.2 Article 5(2) by unlawfully expropriating the Claimants’ investments;

401.3.3 Article 2(2) by failing to accord FET to the Claimants’ investments, and alternatively, Article 3(1) (MFN) by denying the Claimants the FET standard that Tanzania has contracted in Article 2(2) of the UK BIT to accord to British investors, and further and alternatively, Article 3(1) (MFN) by denying the Claimants the FET standard that Tanzania has contracted in Article 4(1) of the Switzerland-Tanzania BIT to accord to Swiss investors;

401.3.4 Article 2(2) by failing to accord to the Claimants’ investments FPS to a standard that was not less favourable than that accorded to residents in Tanzania’s territory, and alternatively, Article 3(1) (MFN) by denying the Claimants the FPS standard that Tanzania has contracted in Article 2(2) of the UK BIT to accord to British investors, and further and alternatively, Article 3(1) (MFN) by denying the Claimants the FPS standard that Tanzania has contracted in Article 4(1) of the Switzerland-Tanzania BIT to accord to Swiss investors;

401.3.5 Article 2(2) by impairing by unreasonable measures the management, maintenance, use, transformation, enjoyment and disposal of the Claimants’ investments, and alternatively, Article 3(1) (MFN) by denying the Claimants the nonimpairment standard that Tanzania has contracted in Article 4(1) of the Switzerland-Tanzania BIT to accord to Swiss investors;

401.3.6 Article 3(1) by (in terms of compensation) subjecting the Claimants’ investments to a treatment less favourable than that which it accorded to investments of its own nationals or companies, and alternatively, Article 3(1) (MFN) by denying the Claimants the national treatment standard that Tanzania has contracted in Article 4(2) of the Switzerland-Tanzania BIT to accord to Swiss investors;

401.3.7 Article 3(2) by (in terms of compensation) subjecting the Claimants as regards the management, maintenance, use, transformation, enjoyment or disposal of their investments to treatment less favourable than that which it accorded to its own nationals or companies and alternatively, Article 3(1) (MFN) by denying the Claimants the national treatment standard that Tanzania has contracted in Article 4(3) of the Switzerland-Tanzania BIT to accord to Swiss investors;

D. Declaration in Regard to Breaches of Customary International Law

401.4 In relation to the Claimants, a declaration that Tanzania has breached customary international law:

401.4.1 by expropriating the Claimants’ investments without the observance of the principles that expropriation under customary international law must be for a public purpose, observe due process and be accompanied by payment of prompt, adequate, and effective compensation;

401.4.2 by failing to accord the Claimants and their investments the customary international law minimum standard of treatment;

401.4.3 by failing to accord the Claimants and their investments protection and security;

E. Declaration in Regard to Damage Caused by Tanzania

401.5 In relation to the Claimants, a declaration that the breaches pleaded above have caused the Claimants to suffer loss.

F. Order as to Damages, Costs and Interest

401.6 Ordering Tanzania to pay the Claimants:

401.6.1 Full compensation and damages in accordance with the applicable law for the breaches pleaded above, in an amount to be established in the proceeding, but not less than USD 34,707,778.08 plus pre- and post-award compound interest on any damages until the date of payment in accordance with the applicable law; and

401.6.2 All of the Claimants’ legal and other costs and expenses in respect of the arbitration, plus compound interest thereon until the date of payment.

401.7 Ordering Tanzania to bear in full (i) the costs of the Tribunal and (ii) any costs incurred by the Appointing Authority and the PCA, including by ordering Tanzania to pay to the Claimants any share paid in advance by them in respect of such costs, plus compound interest thereon until the date of payment.

G. Further or Additional Relief

401.8 Further or additional relief as may be appropriate under the applicable law.

XV. MR PAGLIERI

402. All of the measures pleaded herein in regard to the Claimants were also applied to Mr Paglieri and his investments by Tanzania. For the reasons stated above in regard to each of the causes of action, Tanzania’s measures also breached the obligations that Tanzania owed to Mr Paglieri under the Italian BIT and Tanzanian and customary international law. To the extent they are able, the Claimants, in addition to their own claims, claim for the losses caused to Mr Paglieri by those breaches. Those losses are pleaded in the Remedies Section above.365

220.
In their Reply, the Claimants request the following relief:

XIV. REQUEST FOR RELIEF

444. For the reasons stated, the Tribunal is respectfully requested to render an award granting the following relief:

A. Declaration in Regard to Jurisdiction over the Claimants’ Claims

444.1 In relation to the Claimants, a declaration that the Tribunal has jurisdiction over the Claimants’ claims and that those claims are admissible;

B. Declaration in Regard to Tanzania’s Defences

444.2 In relation to the Claimants, a declaration that all of Tanzania’s defences are denied and dismissed;

C. Declaration in Regard to: Breaches of Tanzanian Law; MFN; Breaches of the Italian BIT; Breaches of Customary International Law; and Damage Caused by Tanzania. And Order as to Damages, Costs and Interest

444.3 In relation to the Claimants, the relief as set out at [401] of the Statement of Claim, including but not limited to: (i) ordering Tanzania to pay the Claimants USD 34,707,778.08 in damages, plus interest, declaratory relief and costs; and (ii) ordering Tanzania to bear in full (a) the costs of the Tribunal and (b) any costs incurred by the Appointing Authority and the PCA, including by ordering Tanzania to pay to the Claimants any share paid in advance by them in respect of such costs, plus interest thereon;

D. Declaration in Regard to Tanzania’s counterclaims

444.4 In relation to Tanzania’s counterclaims, a declaration that:

444.4.1 The Tribunal lacks jurisdiction over Tanzania’s counterclaims;

444.4.2 Alternatively, Tanzania’s counterclaims are inadmissible;

444.4.3 Alternatively, Tanzania’s counterclaims are denied and dismissed on the merits;

444.4.4 Alternatively, to the extent that any of Tanzania’s counterclaims are upheld, any amounts found owing by the Claimants to Tanzania be set off against the amounts found owing by Tanzania to the Claimants;

E. Further or Additional Relief

444.5 Further or additional relief as may be appropriate under the applicable law.366

B. The Respondent’s Request for relief

221.

In its Statement of Defence and Counter Claim, the Respondent requests the following relief:

XIX. DECLARATORY RELIEF

343. The Respondent request the Tribunal for the declarations that it has not breached any provision of Tanzanian law, the Italian BIT and customary international law. Thus, the Tribunal is respectively requested to render an award on the following reliefs:

(a) Declaration that there is no any Breaches of Tanzanian Law

(b) Declaration in that there is no violation to MFN

(c) Declaration that that there is no any Breach of the Italian BIT

(d) Declaration that there is no any Breach of Customary International Law

(e) Declaration that there is no any Damage Caused to the Claimants.

(f) Declaration that the Claimants are not entitled to any Relief sought.

344. The Respondent requests the Tribunal to order that the Claimants have failed to discharge the burden of proof that the measure taken by Tanzania in revoking the Claimants right of occupancy of the land in dispute was/is in violation of various provisions of Tanzanian Laws, the Italian BIT, Customary International Law and various BITs of which Tanzania is a party to.

345. On the basis of the foregoing explanation Respondent respectfully requests that the Tribunal for the follows:

(a) Declaration that the Claimant are in breach of the Conditions of the Rights of Occupancy, provisions of Tanzanian Laws, the Italian BIT and Customary International Law.

(b) Order that the Claimants pay damages for loss suffered as a result of the breaches of Tanzanian land laws, and general principles of law in an amount to be determined during the course of these proceedings.

(c) Order the Claimants to pay interest (both pre- and post-Award) on the sums ordered to be paid above, at a rate to be determined during the course of these proceedings.

(d) Order the Claimants under Article 42 of the UNCITRAL Arbitration Rules revised in 2010), to pay all of the costs and expenses of this arbitration, including the fees and expenses of the Tribunal, and the costs that the Government has and will incur in pursuing the breaches in this Arbitration, including, without limitation, all legal and other professional fees associated with any and all proceedings undertaken in connection with this arbitration.

(e) Order such other relief as it deems just and appropriate.367 [footnotes omitted]

222.

In its Rejoinder, the Respondent requests the following relief:

XIII. RELIEF SOUGHT

180. As pleaded in declaratory relief section in the Respondent’s Statement of Defence and Counter Claim (Corrected) dated 30 October 2018. The Respondent seeks from the Tribunal the following reliefs;

i. Declaration that there is no any Breaches of Tanzanian Law

ii. Declaration in that there is no violation to MFN

iii. Declaration that that there is no any Breach of the Italian BIT

iv. Declaration that there is no any Breach of Customary International Law

v. Declaration that there is no any Damage Caused to the Claimants.

vi. Declaration that the Claimants are not entitled to any of the Reliefs sought.

181. The Respondent further request the tribunal to render an award on the following relief;

vii. To rule out that it has jurisdiction to hear the Respondent’s counterclaim.

viii. Declaration that the Claimants are in breach of the Conditions of the Rights of Occupancy, provisions of Tanzanian Laws, the Italian BIT and Customary International Law.

ix. Order that arbitral award be entered in favor of the Respondent in respect of counter claim.

x. The Claimants be ordered to pay damages for the loss suffered in respect of the Counter Claim and interest thereon.

xi. Order the Claimants to pay interest (both pre- and post-Award) all compensatory damages ordered to be paid by the Tribunal at a rate to be determined during the course of these proceedings.

xii. Order the Claimants under Article 42 of the UNCITRAL Arbitration Rules revised in 2010), to pay all of the costs and expenses of this arbitration, including the fees and expenses of the Tribunal, and the costs that the Government has and will incur in pursuing the breaches and this Arbitration, including, without limitation, all legal and other professional fees associated with any and all proceedings undertaken in connection with this arbitration.

xiii. Order any other and additional relief that may be just and proper.368

VI.JURISDICTION AND ADMISSIBILITY

223.

The Respondent requests that the Tribunal decide on the Respondent’s jurisdictional objections as a preliminary question in accordance with Article 23(3) of the UNCITRAL Rules.369 However, it has not requested bifurcation of the proceedings and accordingly the Respondent’s jurisdictional objections are decided in this Award.

A.Settlement Negotiations

1. The Respondent’s Position

224.
The Respondent asserts that the Claimants had already filed their Notice of Arbitration when they referred the matter to the Government for negotiation.370 On this basis, the Respondent advances two separate objections to the Tribunal’s jurisdiction: (i) there is no dispute sufficiently expressed in legal terms for purposes of arbitration;371 and (ii) there has been a premature reference to arbitration.372 These two objections are summarized below.
225.
First, the Respondent contends that, in the eyes of the law, there is no dispute between the Parties that is capable of being determined by the Tribunal because Tanzania was not notified of the Claimants’ claims prior to the commencement of the arbitration.373 The Claimants submitted their Notice of Dispute on 1 March 2017374 and their Notice of Arbitration on 5 September 2017, while it was only on 16 October 2017 that the Respondent requested withdrawal of the Notice of Arbitration "as a condition to it entering into settlement negotiations."375
226.
In support of its contention, the Respondent refers to section 23(1), (2) and (3) of the Tanzania Investment Act, setting out a settlement mechanism for disputes between foreigners and the Government.376 The Respondent also refers to several common law judicial decisions as containing the applicable requirement of the existence of a "dispute,"377 and asserts that, in failing to raise a claim to challenge the revocation of their Rights of Occupancy over the Estate or to request compensation before the commencement of the arbitration, this requirement was not met.378
227.

Second, the Respondent contends that the Claimants’ commencement of the arbitration was not in accordance with Article 8 of the Treaty.379 In the Respondent’s view, Article 8 includes a mandatory pre-arbitration requirement380 pursuant to which investor-State Treaty disputes shall "be settled through consultations and negotiations, as far as possible."381 According to the Respondent, the mandatory nature of this provision is evidenced by the use of the word "shall"382 and the wording and multi-tier structure of the provision.383 The Respondent notes that pre-arbitral requirements of this sort seek to increase efficiency,384 give the parties the opportunity to settle the dispute amicably385 and accord the host State the right to be informed of the existence of a dispute before it is referred to arbitration.386 Finally, the Respondent considers this requirement to be jurisdictional in nature,387 and argues that any breach of this requirement would result in the Tribunal lacking jurisdiction over the dispute.388

228.
The Respondent acknowledges that the Claimants submitted a Notice of Dispute on 1 March 20 1 7,389 but notes that the Notice was not sent to the Tanzanian authorities responsible for supervising the investment underlying the dispute,390 i.e. the Ministry for Lands and the TIC.391 Also in the Respondent’s view, the Notice of Dispute did not actually seek to initiate negotiations, but merely informed the Government of the Claimants’ decision to refer the dispute to arbitration.392
229.
The Respondent also notes that the High Commission of Tanzania in the United Kingdom replied to the Notice of Dispute on 13 March 2017, informing the Claimants that they should expect an appropriate response from the Tanzanian authorities,393 and advised them to consult the High Commission should they need anything else in relation to the letter.394 The Respondent considers that, in those circumstances, it was inappropriate for the Claimants to file the Notice of Arbitration without having followed up on the matter with the High Commission, the Attorney General or any other Tanzanian authority.395
230.
In the Respondent’s view, the wording of the Notice of Dispute suggests that there was no "good faith approach to negotiation,"396 which is tantamount to a breach of Article 8 of the Treaty rendering the arbitration agreement voidable.397
231.
Furthermore, the Respondent contends that the Party claiming that negotiations have failed needs to prove not only that negotiations were initiated but also that they actually took place.398 The Claimants, it contends, have failed to do so in the instant case.399

2. The Claimants’ Position

232.
The Claimants dispute the Respondent’s argument regarding the absence of a dispute both as a matter of fact and as a matter of law.400
233.
The Claimants deny that they failed to notify their claims to the Respondent prior to filing their Notice of Arbitration.401 They assert that they invited Tanzania to enter into settlement negotiations in their Notice of Dispute dated 1 March 2017402 and received a reply on 5 April 2017 via Tanzania’s High Commissioner in London, acknowledging receipt of the Claimants’ letter and expressing belief that an appropriate response would be delivered soon.403 According to the Claimants, no further response was received from Tanzania during the six-month period following receipt of the Notice of Dispute.404
234.
Moreover, the Claimants dispute the Respondent’s position as to when a "dispute" exists as a matter of legal principle.405 First, the Claimants argue that the legal authorities invoked by the Respondent actually conclude that a dispute may arise when a party refuses to answer a claim or remains silent for a sufficient period of time to give rise to the inference that it does not admit the claim.406 Second, the Claimants point to decisions of several investment treaty tribunals holding that a "dispute" arises when a treaty breach is alleged.407 Third, the Claimants submit that the meaning of the word "dispute" should be ascertained by reference to the terms of the Treaty, and consider that it follows from Article 8 that "a ‘dispute’ arises by no later than the expiry of the cooling-off period in respect of any claims which are not settled during that period."408
235.
Applying the above considerations to the instant case, the Claimants submit that a dispute arose on 1 March 2017, the date of receipt of the Notice of Dispute; and, in any event, a dispute had arisen by no later than the expiry of the cooling-off period foreseen in Article 8 of the Treaty, and before the Notice of Arbitration was submitted on 5 September 2017.409