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Table of key Abbreviations/Defined Terms

Arbitration Rules or ICSID Arbitration Rules ICSID Rules of Procedure for Arbitration Proceedings 2006
BoT Bank of Tanzania
BRELA Business Registrations and Licensing Agency of Tanzania
Charge of Shares The Charge of Shares dated 28 June 1997, executed by Mechmar and VIP over of their shares in IPTL to the Security Agent as security for the Loan
Claimant or SCB HK Standard Chartered Bank (Hong Kong) Limited
Danaharta Danaharta Managers (L) Ltd
Escrow Agreement Escrow Agreement dated 5 July 2006 between the Government of Tanzania, IPTL and Bank of Tanzania
Escrow Account An account established by GoT pursuant to the Escrow Agreement
Hearing Hearing on Jurisdiction and Merits held on 16-23 July 2018
Facility Agreement "Loan Facility Agreement relating to the 100 MW Tegeta Power Project" dated 28 June 1997 between IPTL and a consortium of lenders (several Malaysian banks)
ICSID Convention Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated 18 March, 1965
ICSID or the Centre International Centre for Settlement of Investment Disputes
ICSID 1 Award Final Award in ICSID Case No. ARB/98/8 dated 12 July 2001 between TANESCO and IPTL
Implementation Agreement/IMA Implementation Agreement dated 8 June 1995 between IPTL and GoT
IPTL Independent Power Tanzania Limited
LCIA Award Award in LCIA Arbitration No. 2353 dated 26 August 2003 between Mechmar and VIP
Mechmar Mechmar Corporation (Malaysia) Berhad
Mechmar Shares The 70% shares held by Mechmar in IPTL
PAP Pan Africa Power Solutions (T) Limited
PPA Power Purchase Agreement dated 26 May 1995, between IPTL and TANESCO
PPA Award Final Award of the Tribunal in ICSID Case No ARB/10/20 dated 12 September 2016 between SCB (HK) and GoT
Respondent, Tanzania or GoT The Government of the United Republic of Tanzania
Security Deed Security Deed executed by IPTL as borrower dated 28 June 1997 in favour of SIME Berhad (Singapore office) as Security Agent
TANESCO Tanzania Electric Supply Company Limited
VIP VIP Engineering and Marketing Limited
VIP Shares The 30% shares held by VIP in IPTL

I. INTRODUCTION AND PARTIES

1.
This is a dispute submitted to the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") on the basis of the Implementation Agreement between the Government of the United Republic of Tanzania and Independent Power Tanzania Limited ("IPTL") dated 8 June 1995 ("Implementation Agreement" or "IMA") and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the "ICSID Convention"). This dispute relates to the Claimant’s allegations against the Respondent of breach of Articles 15 and 16 of the Implementation Agreement and the validity of the Claimant’s termination of the Implementation Agreement.
2.
The claimant is Standard Chartered Bank (Hong Kong) Limited ("SCB HK" or the "Claimant"), a corporation registered under the laws of Hong Kong.
3.
The respondent is the United Republic of Tanzania ("Tanzania" or "GoT" or the "Respondent").
4.
The Claimant and the Respondent are collectively referred to as the "Parties". The Parties’ representatives and their addresses are listed above on page i.

II. PROCEDURAL HISTORY

Date Event
18 September 2015 ICSID received a request for arbitration dated 15 September 2015 from SCB HK against the United Republic of Tanzania together with exhibits C-001 through C-046 and legal authority CL-001 ("Request").
30 September 2015 The Secretary-General of ICSID registered the Request in accordance with Article 36(3) of the ICSID Convention and notified the Parties of the registration, wherein the Parties were invited to constitute an arbitral tribunal as soon as possible pursuant to Rule 7 of ICSID’s Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings ("Institution Rules").
19 May 2016 The Secretary-General, in accordance with Rule 6(1) of the ICSID Rules of Procedure for Arbitration Proceedings ("ICSID Arbitration Rules"), notified the Parties that the Tribunal was constituted pursuant to Article 37(2)(a) of the ICSID Convention. The Tribunal was composed of Prof Lawrence Boo Geok Seng, a national of Singapore, President, appointed by the Chairman of the ICSID Administrative Council in accordance with Article 38 of the ICSID Convention; Sir Stanley Burton, a national of the United Kingdom, appointed by the Claimant; and Dr Kamal Hossain, a national of Bangladesh, appointed by the Respondent. On the same date, Ms Aurélia Antonietti, Legal Counsel, ICSID, was designated to serve as Secretary of the Tribunal.
27 June 2016 The Tribunal issued Procedural Order No. 1 ("PO 1") pursuant to the Parties’ agreement in their letters of 14 and 27 June 2016. PO 1 provides, inter alia, that the applicable Arbitration Rules would be those in effect from 10 April 2006; the procedural language is English; and the place of proceeding would be London, England.
29 June 2016 The Respondent filed its proposal for the disqualification of Sir Stanley Burnton, along with Annexes 1 through 11, pursuant to Article 57 of the ICSID Convention and ICSID Arbitration Rule 9, on the grounds that his appointment was inconsistent with the arbitration clause contained in Article 21.2 of the Implementation Agreement.
30 June 2016 The Parties were informed that the proposal to disqualify Sir Stanley Burnton would be decided according to Article 58 of the ICSID Convention, and the proceeding was suspended until such decision was made, in accordance with ICSID Arbitration Rule 9(6).
5 July 2016 The Claimant filed observations on the proposal for disqualification.
7 July 2016 The Tribunal consented to the resignation of Sir Stanley Burnton, in accordance with ICSID Arbitration Rule 8(2) and the SecretaryGeneral notified the Parties of the vacancy on the Tribunal and invited the Claimant to appoint the missing arbitrator.
8 July 2016 The Claimant appointed Justice David Unterhalter SC, a national of South Africa.
11 July 2016 Following Justice David Unterhalter's acceptance of his appointment as arbitrator, the Tribunal was reconstituted.
July - August 2016 Correspondence was exchanged between the Parties and the Tribunal regarding a date for the first session, which was set for 5 August 2016.
3 August 2016 The Respondent's request for adjournment, based on the Attorney General of Tanzania not being available, was rejected by the Tribunal on 3 August 2016.
4 August 2016 The Respondent informed the Tribunal that the Attorney General of Tanzania had instructed counsel to not attend the first session in his absence.
5 August 2016 The Tribunal held the first session at the IDRC in London and the participants were the Members of the Tribunal, Mr Francisco Abriani, ICSID Legal Counsel, and counsel for the Claimant.
15 August 2016 The Respondent filed a request to address the Respondent's objections to jurisdiction and admissibility as preliminary questions ("Respondent's Application for Bifurcation") with legal authorities RL-001 through RL-010.
2 September 2016 The Claimant submitted its Response to the Respondent's Application for Bifurcation ("Claimant's Response to the Application for Bifurcation") with exhibits C-047 through C-075 and legal authorities CL-002 through CL-004.
15 and 20 September 2016 On 15 and 20 September 2016, the Claimant submitted additional exhibits, C-076 and C-077.
23 September 2016

The Tribunal held the Hearing on Bifurcation in London at the IDRC. The following persons participated to the hearing:

Members of the Tribunal:
Prof Lawrence Boo, President of the Tribunal
Mr David Unterhalter SC, Arbitrator
Dr Kamal Hossain, Arbitrator

ICSID Secretariat:
Mr Marco Tulio Montañés-Rumayor, Legal Counsel

On behalf of the Claimant:
Mr Joseph Casson, Standard Chartered Bank (Hong Kong) Limited
Mr James Denham, Standard Chartered Bank
Mr Matthew Weiniger QC, Linklaters LLP
Mr Iain Maxwell, Herbert Smith Freehills LLP
Mr Dominic Kennelly, Herbert Smith Freehills LLP
Mr Adam McWilliams, Herbert Smith Freehills LLP
Mr Divyanshu Agrawal, Herbert Smith Freehills LLP

On behalf of the Respondent:
Mr Beredy Malegesi, Crax Law Partners
Prof Bonaventure Rutinwa, R.K. Rweyongeza & Co. Advocates
Mr David Hesse, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Galileo Pozzoli, Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms Luciana Ricart, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Valerio Salvatori, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr James Cockburn, Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms Rebecca Johnston, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Dav Holat, IT technician, Curtis, Mallet-Prevost, Colt & Mosle LLP

26 September 2016 The Claimant submitted an additional legal authority, CL-005, and several additional exhibits, C-078 and C-079.
11 October 2016 The Tribunal issued Procedural Order No. 2 ("PO 2") concerning procedural matters. On the same date, the Tribunal issued Procedural Order No. 3 ("PO 3") setting forth its decision not to bifurcate the proceedings.
16 December 2016 The Claimant filed its Memorial on the Merits ("Claimant's Memorial") with the witness statement of Mr Gaspar Asheri Nyika, dated 16 December 2016, the expert reports of Mr Colin Johnson and Mr Nicholas Zervos, dated 16 December 2016, exhibits C-080 through C-218 and legal authorities CL-006 through CL-055.
26 June 2017 The Respondent filed its Memorial on Objections to Jurisdiction and Counter-Memorial on the Merits ("Respondent's CounterMemorial") together with exhibits R-001 through R-071 and legal authorities RL-011 and RL-094.
17 July 2017 The Tribunal issued Procedural Order No. 4 ("PO 4") concerning the procedural calendar, ordering that the Claimant's Rejoinder on Jurisdiction would be due on 2 March 2018.
11 September 2017 The Tribunal issued Procedural Orders 5a ("PO 5a") and 5b ("PO 5b") on production of documents by the Respondent and the Claimant respectively.
10 November 2017 The Claimant filed its Counter-Memorial on Jurisdiction and Reply on the Merits ("Claimant's Reply"), along with the second witness statement of Mr Gaspar Asheri Nyika, dated 9 November 2017, the witness statement of Mr Kieran Day, dated 10 November 2017, the witness statement of Mr Joseph Wesley Casson dated 15 November 2017, the expert report of Mr David Chivers QC, dated 8 November 2017, the second expert report of Mr Nicholas Zervos, dated 10 November 2017, exhibits C-219 through C-399 and legal authorities CL-056 through CL-189.
7 December 2017 The Respondent requested an extension of "at least three months" to file its Rejoinder on the Merits and Reply on Jurisdiction due on 29 January 2018.
12 December 2017 The Claimant objected to this extension request.
4 January 2018 The Tribunal granted the Respondent's requested time extension for filing its Rejoinder on Merits and Reply on Jurisdiction.
11 January 2018 The Tribunal confirmed that the April hearing dates were vacated and that the Hearing on Jurisdiction and Merits would take place in London from 16-27 July 2018.
16 January 2018 The Tribunal issued Procedural Orders 6a ("PO 6a") and 6b ("PO 6b") concerning production of documents.
30 January 2018 The Tribunal issued Procedural Order No. 7 ("PO 7") concerning the procedural calendar.
1 March 2018 Curtis, Mallet-Prevost, Colt & Mosle LLP informed the Tribunal that they were no longer representing the Respondent.
2 May 2018 The Tribunal granted the Parties' April 2018 requests for an extension of time to file their submissions and informed the Parties that it would have an organizational conference call.
17 May 2018 The President held an organizational conference call with the Parties to receive updates and clarifications regarding the
  Respondent’s representation in these proceedings and to discuss procedural issues related to this matter.
23 May 2018 The Respondent filed its Rejoinder on the Merits and Reply on Jurisdiction ("Respondent's Rejoinder"), along with exhibits R-072 through R-097 and legal authorities RL-095 through RL-142.
1 June 2018 Further to the Parties’ respective letters of 25 and 31 May 2018, the Tribunal informed the Parties that further evidence shall only be permitted if and when the Tribunal so directs.
14 June 2018 The Parties were invited to consider the appointment of Ms Elizabeth Wu as assistant to the President, as well as the appointment of Mr Moin Ghani, as assistant to Dr Kamal Hossain. The Parties were also invited to provide their position on the attendance of the above-mentioned individuals and Ms Chloe Terrapon Chassot, as observer, to the Hearing on Jurisdiction and Merits.
20 and 27 June 2018 The Parties confirmed that they did not object to the appointment of Ms Elizabeth Wu and Mr Moin Ghani as assistants nor to the attendance of Ms Chloe Terrapon Chassot at the hearing.
2 July 2018 The Claimant filed its Rejoinder on Jurisdiction ("Claimant's Rejoinder on Jurisdiction") with exhibits C-403 through C-408 and legal authorities CL-190 through CL-208.
4 July 2018 The President held a pre-hearing organizational meeting with the Parties by telephone conference.
5 July 2018 The Parties were requested to clarify their positions regarding how the Claimant’s witness statements ought to be evidentiarily treated, given that the Respondent did not intend on cross-examining any of the Claimant’s witnesses or experts.
6 and 8 July 2018 The Parties submitted their positions regarding the issue of the Claimant’s witnesses.
10 July 2018 The Respondent confirmed that Curtis, Mallet-Prevost, Colt & Mosle LLP was retained to represent it. On the same date, the Tribunal decided that the Hearing on Jurisdiction and Merits would take
  place from 16-24 July 2018 and decided on the issue of the Claimant’s witnesses.
12 July 2018 A letter said to be from Mr Harbinder Singh Sethi on IPTL letterhead addressed to the Secretary of the Tribunal, was sent by email through the Ukonga Central Prison at Dar Es Salaam seeking the Tribunal’s permission to "join IPTL/PAP or alternatively for IPTL/PAP to be called as witnesses in the pending proceedings. Upon the confirmation from the Parties during the Hearing, the Tribunal declined to accede to the request.1
16 July 2018 At the Hearing on Jurisdiction and Merits, Ms Elizabeth Wu, Mr Moin Ghani and Ms Chloe Terrapon Chassot provided the Parties with their respective signed terms of reference and declarations of their independence and impartiality. On the same date, the Tribunal granted the Parties’ requests, of 12 and 13 July 2018, to admit RL-143 and RL-144 and C-409 onto the record.
16-23 July 2018

A Hearing on Jurisdiction and Merits was held, at the IDRC in London. The following persons participated at the hearing:

Members of the Tribunal :
Prof Lawrence Boo, President of the Tribunal
Justice David Unterhalter SC, Arbitrator
Dr Kamal Hossain, Arbitrator

Tribunal Assistants / Observer :
Ms Elizabeth Wu, Assistant to Mr Lawrence Boo, President
Mr Moin Ghani, Assistant to Dr Kamal Hossain, Co-Arbitrator
Ms Chloe Terrapon Chassot, Observer

ICSID Secretariat :
Ms Geraldine Fischer, Acting Secretary of the Tribunal

On behalf of the Claimant :
Counsel :
Mr Matthew Weiniger QC, Linklaters LLP
Mr Iain Maxwell, Herbert Smith Freehills LLP
Ms Elizabeth Kantor, Herbert Smith Freehills LLP
Mr Aaron McDonald, Herbert Smith Freehills LLP
Mr Harry Ormsby, Herbert Smith Freehills LLP
Mr Gavin Creelman, Herbert Smith Freehills LLP
Mr Joel Fenster, Herbert Smith Freehills LLP
Ms Olga Timiryasova, Herbert Smith Freehills LLP
Parties :
Mr James Denham, Standard Chartered Bank
Mr Oliver Perez, Standard Chartered Bank
Mr Daniel Knowles, Standard Chartered Bank
Witnesses :
Mr Joseph Casson, Standard Chartered Bank (Hong Kong) Ltd
Mr Kieran Day, The Business Advisory Group
Mr Gaspar Nyika, IMMA Advocates
Experts :
Mr Colin Johnson, Charles River Associates
Mr Sandy Cowan, Grant Thornton
Mr Nicholas Zervos, Velma Law

On behalf of the Respondent :
Counsel :
Mr Galileo Pozzoli, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Tullio Treves, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Mark Handley, Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms Luciana Ricart, Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms Irene Petrelli, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Renato Treves, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Valerio Salvatori, Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms Neza Hren, Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms Clarissa Manfré, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Dav Holat, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Lee Southon, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Omar Gargash, Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr Beredy Malegesi, Crax Law Partners in Association with RK Rweyongeza and Co. Advocates
Mr Makubi Kunju Makubi, Crax Law Partners in Association with RK Rweyongeza and Co. Advocates
Mr Andrea Cardani, EconOne
Mr Brendan Moore, EconOne
Parties :
Mr Clement Mashamba, United Republic of Tanzania
Mr George Mandepo, United Republic of Tanzania
Ms Hosana Jacob Mgeni, United Republic of Tanzania

23 July 2018 The Tribunal granted the Claimant’s request to admit exhibits C- 410 through C-414, and legal authorities, CL-209 through CL-212.
8 August 2018 The Parties were informed that Ms Geraldine Fischer, ICSID Legal Counsel, had been assigned to serve as Secretary of the Tribunal.
7 September 2018 The Parties filed simultaneous Post-Hearing Briefs ("PHB") with the accompanying exhibits and legal authorities. The Claimant also filed an updated expert report of Mr Colin Johnson.
21 September 2018 The Parties filed simultaneous Reply Post-Hearing Briefs ("Reply PHB") with the accompanying exhibits and legal authorities together with their submissions on costs.
27 September 2018 The Parties were invited to consider the appointment of Ms Sukriti Slehria to replace Ms Wu as assistant to the President. By correspondence of 27 and 28 September 2018, the Parties confirmed that they did not object to the appointment, and Ms Slehria provided the Parties with her signed terms of reference and declaration of her independence and impartiality.
28 August 2019 The proceeding was declared closed.

III. FACTUAL BACKGROUND

5.
The Tribunal provides below a brief summary of the factual background of the events before the dispute as set out in the Parties’ submissions in the arbitration. This summary does not constitute any finding by the Tribunal on any facts disputed by the Parties. A detailed analysis of the facts relevant to the Tribunal’s determinations on jurisdiction and liability are contained in Sections V and VI.

A. The Facility and Key Agreements2

6.
On 28 September 1994, Mechmar Corporation (Malaysia) Berhad ("Mechmar") (a Malaysian company) and VIP Engineering and Marketing Limited ("VIP") (a Tanzanian Company) entered into a Promoters/Shareholders Agreement ("PSA") wherein the parties agreed "to form a private limited company incorporated in Tanzania";3 and it was set out that the "main object" of the company would be to apply for the operating licence to build, construct and operate a 100 megawatts ("MW") power plant for 20 years pursuant to the Memorandum of Understanding signed between Mechmar and the Tanzanian Ministry of Water Energy and Minerals dated 27 August 1994; with Mechmar contributing 70% of the paid-up capital and VIP contributing 30% of the paid-up capital for which "cash [USD 300,000 was] to be advanced by [Mechmar] subject to clause 2(ii)(a)(b)(c) and (d)" of the PSA.4
7.
On 1 November 1994, the company IPTL was "incorporated under the Companies Ordinance [1921] (Cap. 2012)" in Tanzania as a joint venture company between Mechmar (holding 70% of the shares) ("Mechmar Shares") and VIP (holding 30% of the shares) ("VIP Shares").5
8.
Several agreements were entered into in 1995, including financing arrangements.

(1) Power Purchase Agreement

9.
On 26 May 1995, IPTL and Tanzania Electric Supply Company Limited ("TANESCO"), concluded the Power Purchase Agreement ("PPA").6 Under the PPA, IPTL undertook to design, construct, own, operate and maintain an electricity generating facility ("Facility" or "Power Plant") with a nominal net capacity of 100 megawatts to be located in Tegeta, Dar es Salaam for the generation and sale of electricity, and to deliver the electricity it generated to TANESCO as and when required, for an initial period of 20 years, subject to extensions for further periods ("Project"). The PPA is governed by Tanzanian law and contains an ICSID arbitration clause.7

(2) Implementation Agreement

10.
By Implementation Agreement dated 8 June 1995 signed by IPTL and GoT, the GoT gave various undertakings and assurances in favour of IPTL and "its permitted successors and assigns", including undertakings against discriminatory action and expropriation, and granted IPTL the exclusive right to design, finance, insure, construct, complete, own, operate and maintain the Facility. The Implementation Agreement is governed by Tanzanian law and contains an ICSID arbitration clause.8
11.
The GoT also agreed to execute a guarantee, attached as Schedule 1 to the Implementation Agreement ("Guarantee"), undertaking to pay to IPTL any sums owed by TANESCO under the PPA should TANESCO failed to pay.9

(3) Facility Agreement

12.
IPTL raised the majority of the funds by means of a loan provided by a consortium of foreign lenders (several Malaysian banks) under the "Loan Facility Agreement relating to the 100 MW Tegeta Power Project" dated 28 June 1997 ("Facility Agreement").10 The loan was to be repaid from the cash flows generated by IPTL under the PPA. The Facility Agreement contained a non-exclusive English jurisdiction clause and was governed by English law.11

(4) Security Deed

13.
By Security Deed dated 28 June 1997 ("Security Deed"),12 IPTL assigned all its present and future rights, title and interest in and to the Assigned Contracts (which included the PPA and the Implementation Agreement) to the lenders' nominated Security Agent as security for the loan. The Security Deed contained a non-exclusive English jurisdiction clause and was subject to English law.13

(5) Shareholder Support Deed

14.
By a "Shareholder Support Deed"14 dated 28 June 1997, Mechmar and VIP agreed to

subscribe to the shareholders' funds of IPTL and bound themselves not to sell, transfer or otherwise dispose the Shareholders' Funds and undertook, inter alia, not to take any action in furtherance of the winding up, liquidation or dissolution of IPTL.

(6) Charge of Shares

15.
By a "Charge of Shares" dated 28 June 1997, Mechmar and VIP charged their shares in IPTL to the Security Agent as security for the loan and agreed that, in an "Event of Default" under the Facility Agreement, the shareholders would cease to be authorised to exercise rights with respect to the shares, and the Security Agent alone would be entitled to exercise such rights. The Charge of Shares contained a non-exclusive English jurisdiction clause and was governed by Tanzanian law.15

(7) Lenders and Security Agents

16.
The original lenders were a consortium of Malaysian banks.16 The Facility Agreement and the other related documents were restructured between 1999 and 2005.17
17.
In 2001 and 2003, IPTL and Danaharta Managers (L) Ltd ("Danaharta") (which had succeeded the Malaysian banks under the Facility Agreement) restructured the loan due under the Facility Agreement into two new loans ("Term Loan 1" and "Term Loan 2") (collectively referred to as the "Loan" or "Term Loans " or "Loans"). These loans globally amounted to USD 120 million.18
18.
In August 2005, SCB HK acquired the Loan and related security from Danaharta under a "Sale and Purchase Agreement (Loan Account - Independent Power Tanzania Limited)" dated August 2005.19

B. International Proceedings, Tanzanian Court Proceedings and Other Disputes

(1) ICSID 1 Proceedings20

19.
On 25 November 1998, TANESCO commenced ICSID arbitration proceedings against IPTL under the PPA, claiming that it was entitled to terminate the PPA on account of breaches by IPTL, and sought for the tariff to be adjusted ("ICSID 1 Proceedings").21
20.
The tribunal in the ICSID 1 proceedings ("ICSID 1 Tribunal") upheld the PPA as a "valid and effective contract," but also ruled that IPTL could not recover certain costs incurred during the construction phase through the tariff charges under the PPA. The ICSID 1 Award issued on 12 July 200122 incorporated a financial model (Appendix F annexed to the ICSID 1 Award), which was in accordance with the parties’ agreement and "was to act as the method for calculating the tariff payments to be made by Tanesco to IPTL following the commencement of commercial operations" under the PPA.23

(2) Shareholder Dispute and Winding Up Petition24

21.
After the ICSID 1 Award, disputes arose between VIP and Mechmar relating to the attribution of the construction costs that the ICSID 1 Tribunal had decided were not recoverable. On 25 February 2002, VIP filed a petition with Tanzanian courts seeking the winding up of IPTL, among other things, on the ground that IPTL was being "run as an incorporated partnership (quasi-partnership)" ("Winding Up Petition").25 IPTL applied to stay and dismiss this petition. Mechmar commenced an arbitration under the rules of the LCIA pursuant to the terms of the PSA. The tribunal in the LCIA arbitration ordered VIP to discontinue the Winding Up Petition in its final award dated 26 August 2003 ("LCIA Award").26 Mechmar then filed an application before the High Court of Tanzania seeking enforcement of the LCIA Award, and this application was eventually dismissed with "costs for Mechmar's failure to prosecute its case" on 31 October 2008.27

(3) Tariff Dispute28

22.
On 5 July 2006, GoT, IPTL and the Bank of Tanzania ("BoT") (as the Escrow Agent) entered into an Escrow Agreement, which established an account for GoT to pay into ("Escrow Account")29 and maintain a two-months equivalent of tariff payments due to IPTL under the PPA as GoT’s fulfilment of its obligation to provide security.
23.
Following certain tariff disputes between TANESCO and IPTL, as from May 2007 ("Tariff Dispute"), TANESCO stopped making tariff payments under the PPA and instead made payments into the Escrow Account.30

(4) Interpretation Proceedings and the Revised Administration Petition31

24.
In June 2008, IPTL started proceedings seeking an interpretation of the ICSID 1 Award pursuant to Article 50 of the ICSID Convention ("Interpretation Proceedings"), which were ultimately discontinued on 19 August 2010, following various events.32 The Claimant sought to intervene in the Interpretation Proceedings, but its efforts (so it contends) were frustrated by the actions of TANESCO and GoT, which conspired with Mechmar to purchase the Mechmar Shares in return for Mechmar withdrawing the Interpretation Proceedings.33 This is contested by the Respondent.34 In this context, the Claimant filed two applications with the High Court of Tanzania for the appointment of an administrator to IPTL; the first administration petition was allowed by Mihayo J’s Ruling35 and Mihayo J’s Ruling was overturned by the Court of Appeal in its Ruling of 9 April 200936 and then the second petition was filed by the Claimant on 17 September 2009 ("Revised Administration Petition") which it withdrew in 2013.37
25.
On 15 December 2008, SCB HK appointed a receiver over VIP’s shares in IPTL,38 and later appointed a receiver over Mechmar’s shares in IPTL.39

(5) Interim PPA40

26.
On 16 December 2008, the High Court of Tanzania appointed the "Administrator General/Official Receiver", Mr T Rugonzibwa as the provisional liquidator ("First Provisional Liquidator" or "First PL") of IPTL pursuant to the Winding Up Petition.41 In October or November 2009, the First PL resumed operation of the Power Plant in response to power shortages in Tanzania. The First PL on behalf of IPTL entered into an interim power purchase agreement with TANESCO ("Interim PPA") on 5 February 2010.42

(6) PPA Arbitration 43

27.
Following the discontinuation of the Interpretation Proceedings on 19 August 2010, the Claimant initiated ICSID proceedings on 15 September 2010 against TANESCO to recover sums under the PPA in its capacity as assignee of the PPA ("PPA Arbitration"). The tribunal in the PPA Arbitration ("PPA Tribunal") issued its Decision on Jurisdiction and Liability on 12 February 2014 ("PPA Decision"),44 and in its Final Award dated 12 September 2016 ("PPA Award")45 found, among other things, that "payment out of the Escrow Account to IPTL/ PAP did not discharge TANESCO's obligation to SCB HK under the PPA" and ordered TANESCO to pay to SCB HK an amount of USD 148.4 million plus interest.46 TANESCO filed an application for annulment of the PPA Award on 6 January 2017.47
28.
The ICSID ad hoc Annulment Committee dismissed TANESCO's annulment application on 22 August 2018.48

(7) Proceedings in Malaysia and in the British Virgin Islands ("BVI")49

29.
In August 2010, SCB HK filed proceedings in Malaysia seeking interim relief against Mechmar alleging that Mechmar had breached the Charge of Shares and "threatened to sell the Subject Shares [Mechmar Shares] to the Government of Tanzania."50 The High Court of Malaya ("Malaysian Court") issued an interlocutory injunction restraining Mechmar from transferring the Mechmar Shares.51 Mechmar’s legal representatives informed SCB HK that the Mechmar Shares were sold by Mechmar on 9 September 2010.52 Pursuant to an Ex parte Injunction Order by the Malaysian Court53 ordering Mechmar to furnish documents regarding the sale of Mechmar Shares, it produced the Share Sale Agreement dated 9 September 2010 entered between Mechmar and Piper Link Investments Ltd ("Piper Link") (a company incorporated in BVI).
30.
Ms Martha Renju, in her capacity as receiver of shares of IPTL, then applied for and obtained an ex parte order in BVI against Piper Link to deliver the share certificates to the High Court of the BVI ("BVI Court") and to take no further steps to transfer, dispose of or otherwise deal with the Mechmar Shares pending trial.54
31.
On 11 April 2011, the BVI Court ordered summary judgment in favour of Martha Renju.55

(8) Winding Up Order and Setting Aside56

32.
On 15 July 2011, the High Court of Tanzania ordered the winding-up of IPTL ("Winding Up Order") on the application of VIP’s 2002 petition (see paragraph 21 above) and appointed the " [A dministrator General/]Official Receiver, Mr Philip Saliboko as the "Liquidator" of IPTL.57
33.
After the Winding Up Order, the Claimant, submitted a proof of debt to the Liquidator wherein it stated, among other things, that it was owed by IPTL a sum of "US$ 125,970,570.67 for monies advanced pursuant to the [...] loan Agreement [...] (including interest) together with insurance premia and enforcement costs [...]";58 and referred to "Security" documents (including the Charge of Shares and Security Deed) which it highlighted secured "all monies, debts and liabilities" owed by IPTL to it.59 Pricewaterhouse Coopers produced a report dated March 2012 ("PwC Report")60 in its advice to the Liquidator, in which they confirmed the validity of the loan, and made their conclusions on SCB HK’s security, including that SCB HK "is a valid creditor of IPTL."61 The Parties dispute the consequences of the PwC Report’s conclusions.62
34.
On 17 December 2012, the Winding Up Order was set aside63 by the Tanzanian Court of Appeal.64 The Court declared all proceedings (viz. proceedings in Misc. Civil Cause No 49 of 2002 and Misc. Civil Cause No. 243 of 2003) a "nullity"; rulings and orders made therein relating to VIP’s Winding Up Petition that post-dated the Claimant’s Revised Administration Petition were "...quashed and set aside", and ordered that Claimant’s Revised Administration Petition be heard expeditiously by the High Court of Tanzania. Consequently, IPTL reverted to the state it was before the Winding Up Order and Mr Saliboko was appointed as provisional liquidator ("Second Provisional Liquidator" or "Second PL") of IPTL.65
35.
On 9 April 2013, Mr Lutema served a petition on behalf of Mechmar to enforce the LCIA Award ("Lutema Petition")66 and sought the discontinuance of Misc. Civil Cause No. 49 and Misc. Civil Cause No. 254 of 2003.67 The Lutema Petition and the Revised Administration Petition were consolidated on 3 May 20 1 3.68 On 5 May 2013, Utamwa J in his Order dated 7 May 2013, directed that the Provisional Liquidator of IPTL and Mechmar be both entitled to be heard in respect of SCB HK's Revised Administration Petition.69

(9) Winding Up Order in Respect of Mechmar

36.
On 18 May 2012, a winding up order in respect of Mechmar was made by the Malaysian Court.70 According to the Claimant, since late 2011, Mr Sethi and his advocate Mr Lutema had been acting for and representing Mechmar in various court proceedings in Tanzania. Mechmar’s liquidators informed Mr Lutema that only the liquidators had authority to act for Mechmar.71 Mechmar’s liquidators72 obtained, on 16 April 2013, directions from the Malaysian Court (High Court of Malaya) that they had sole power to act on behalf of Mechmar.73

(10) Utamwa J Order

37.
On 26 August 2013, VIP gave notice that it would be applying to withdraw the Winding Up Petition over IPTL and all ancillary applications by VIP in consolidating Misc. Civil Cause No. 49 of 2002 and Misc. Civil Cause No. 254 of 200374 enclosing the Share Purchase Agreement dated 15 August 201375 entered between VIP and PAP for the sale of VIP's 30% shareholding in IPTL to PAP ("VIP-PAP-SPA"), and on 30 August 2013 VIP also tendered before the High Court the draft terms of order to be made by the Court.76
38.
On 5 September 2013, Utamwa J granted this application and ordered inter alia that all of IPTL’s affairs, including the PPA and the control of the Facility, be transferred to PAP ("Utamwa J Order").77 The Utamwa J Order was rendered in the proceedings Misc. Civil Cause Nos. 49 of 2002 and 254 of 2003 that corresponded to IPTL’s Winding Up Petition and an application to set aside the LCIA Award, both commenced by VIP, and to which the Claimant was not party to either of those two proceedings.78
39.
The Utamwa J Order is one of the principal matters relied on by the Claimant in this arbitration to support its claim relating to expropriation. The Claimant contends that the reasoning is "inexplicable" and that the proceeding leading up to it was "unjust", for several reasons: (i) it was made without notice to interested parties; (ii) it was made without giving the interested parties an opportunity to be heard; (iii) it was made in disregard of the Court of Appeal’s judgment of 17 December 2012 described above; (iv) it was inconsistent with Utamwa J’s own earlier order dated 5 June 2013; (v) it was made pursuant to the VIP-PAP-SPA notwithstanding the fact that the assertion in the VIP-PAP-SPA that PAP purchased the Mechmar Shares in 2011 was contrary to the evidence; (vi) it was made with the express consent of the Second PL, who was on notice of SCB HK’s rights; and (vii) it did not explain the legal basis on which control of IPTL and its assets could be passed to PAP on the application of VIP (as minority shareholder), without reference to SCB HK’s rights.79
40.
The Respondent rejects these contentions.80 According to the Respondent, SCB HK, despite not being a party to Misc. Civil Cause Nos. 49 of 2002 and 254 of 2003, was put on notice and granted an opportunity to monitor the proceedings and, if it had wished to do so, file a petition to intervene in those proceedings and counter VIP’s application to withdraw the Winding Up Petition, including its request that the High Court order the handing over of all of IPTL’s affairs and assets to PAP.81

(11) English Proceedings and Flaux J's Judgment82

41.
In December 2013, Standard Chartered Bank Malaysia Berhad and SCB HK started proceedings in the High Court of England and Wales against IPTL, VIP and PAP under the Facility Agreement, Security Deed, Charge of Shares and Shareholder Support Deed, seeking confirmation of the validity of SCB HK's loan to IPTL and of its security over that loan.
42.
IPTL, VIP and PAP raised jurisdictional challenges, which were rejected by Flaux J, and on 16 November 2016,83 Flaux J declared inter alia that: (i) the Facility Agreement, Security Deed, Shareholder Support Deed, and Charge of Shares were valid; (ii) Standard Chartered Bank Malaysia Berhad had been the Facility Agent since 21 October 2005; (iii) SCB HK had been the Security Agent since 4 December 2009; and (iv) all the rights, title and interest of the banks under the Facility Agreement, the Security Deed, the Shareholder Support Deed and the Charge of Shares became vested in SCB HK with effect from 17 August 2005 "as assignee of Danaharta pursuant to the Deed of Assignment [...]; and with effect from 25th October 2005, as sole Bank pursuant to the Novation Notice. "84

C. POST-2013 IPTL EVENTS

(1) PAP's Registration as Owner of Mechmar's Shareholding in IPTL

43.
On 6 September 2013, PAP replaced the board of directors of IPTL with its own nominees (including Mr Sethi) as "First Directors Post Provision Liquidation" and transferred VIP’s 30% shareholding and Mechmar’s 70% shareholding to itself. This was registered with the Business Registrations and Licensing Agency of Tanzania ("BRELA").85

(2) Payment of the Funds Held in the Escrow Account to PAP

44.
In October 2013, TANESCO and IPTL entered into a settlement agreement with regard to the Tariff Dispute.86
45.
On 21 October 2013, the Permanent Secretary of the Ministry of Energy and Minerals ("PSMEM"), on behalf of the Government of Tanzania and IPTL (controlled by PAP) entered into an "Agreement for Delivery of Funds to [IPTL]".87
46.
On 28 November and 6 December 2013, the funds of the Escrow Account were transferred to PAP.88 The Claimant contends that PAP used USD 75 million of the funds obtained from the Escrow Account to pay VIP’s 30% shareholding in IPTL instead of using it to satisfy TANESCO's payment obligations to SCB HK under the PPA and to pay down the loan.89

(3) Investigations in Tanzania90

47.
The actions of the GoT and TANESCO led to a number of investigations in Tanzania, including a report submitted by the Auditor General to the Speaker’s office of the Tanzanian Parliament on 14 November 2014 ("CAG Report")91 and a report by the Public Accounts Committee on 17 November 2014 ("PAC Report").92 The Parties dispute the evidentiary relevance of these reports and interpret their contents differently.93
48.
TANESCO continued making payments to IPTL (then controlled by PAP) but the loan remained undischarged.94

IV. PARTIES' REQUESTS FOR RELIEF

49.
The Claimant requests the following relief in its Request dated 15 September 2015:95

(1) A declaration that the United Republic of Tanzania has breached Articles 16.1 and 16.2 of the Implementation Agreement.

(2) An order that the United Republic of Tanzania shall pay SCB HK compensation for its breaches of the Implementation Agreement in an amount to be determined by the Tribunal.

(3) An order that the United Republic of Tanzania pay the cost of these arbitration proceedings, including the fees and expenses of the Tribunal and costs of legal representation and interest thereon.

50.
The Claimant requests the following relief in its Post-Hearing Brief dated 7 September 2018:96

i. a declaration that the United Republic of Tanzania has breached Articles 15.3, 16.1 and 16.2 of the Implementation Agreement;

ii. a declaration that, as a result of the United Republic of Tanzania's breaches of the Implementation Agreement, SCB HK is entitled to damages of US$352,514,258, or such other amount as shall be determined by the Tribunal;

iii. a declaration that the Implementation Agreement terminated on 6 July 2018 pursuant to SCB HK's Termination Notice;

iv. a declaration that, as a consequence of that termination, SCB HK is entitled to compensation calculated pursuant to Row 2 of Schedule 2 of the Implementation Agreement, together with a declaration of the amount of compensation thereby due to SCB HK;

v. in the alternative to the relief claimed at points ii and iv above, a declaration that the damages and/or compensation due to SCB HK is greater than the amount outstanding under the Facility Agreement;

vi. an order that, out of the sums declared due under points ii, iv, and/or

v above, the United Republic of Tanzania shall pay SCB HK the sum calculated by SCB HK as necessary to pay off the amount due under the Facility Agreement, which as at the date of these Post-Hearing Submissions is US$187,269,605; and

vii. an order that, to the extent not covered by the relief granted under point vi above, the United Republic of Tanzania pay the cost of these arbitration proceedings, including the fees and expenses of the Tribunal and costs of the parties' legal representation and interest thereon.

51.
The Claimant states in its Reply PHB that its relief sought in the Claimant’s PHB at paragraph 227 is subject to its request in paragraph 126 of its Reply PHB "that GoT be ordered to pay the entire amount of damages and compensation due under the Implementation Agreement in the event that that the Tribunal is not agreeable to making an order for payment of the amount due under the Facility Agreement without further analysis of that amount."97
52.
The Respondent in its Counter-Memorial dated 26 June 2017 and Reply PHB dated 21 September 2018 requests the Tribunal to:98

(i) decline to exercise jurisdiction in the present case;

(ii) to the extent that the Tribunal proceeds to examine the merits of the case, dismiss Claimant's claims in their entirety;

(iii) declare that Respondent owes no damages or compensation to Claimant; and

(iv) order Claimant to pay the totality of costs relating to this Arbitration.

V. JURISDICTION

53.
The Respondent raises several grounds to challenge the Claimant’s standing in this arbitration. It says firstly that the Claimant lacks capacity to make any claim as it is neither a legal assignee under the Implementation Agreement (discussed at paragraphs 57 to 106 below) nor has it satisfied the requirements of Tanzanian law as a statutory assignee (discussed at paragraphs 107 to 175 below). It also asserts that the Tribunal lacks jurisdiction ratione personae and ratione materiae under Article 25 of the ICSID Convention (discussed at paragraphs 176 to 252 below).

A. The Claimant's Status as a Legal Assignee

54.
The Claimant brings its claim against the Respondent as the assignee of IPTL's rights under the Implementation Agreement, which rights it submits were assigned to the Security Agent (now the Claimant) pursuant to the Security Deed. The Claimant argues that, as the statutory assignee of IPTL's rights under the Implementation Agreement, it can step into the shoes of IPTL and directly enforce IPTL's rights against the Respondent.99
55.
The Respondent raises two main grounds of challenge in this respect. First, it argues that the assignment is ineffective as the IPTL did not obtain the Respondent's consent to the initial and successive assignments of IPTL’s rights, as required under Article 15 of the Implementation Agreement.100 This is described by the Respondent as the "Contractual Assignment" issue. Second, the Respondent argues that the Claimant is not a valid assignee under Tanzanian Law, as the Claimant is not a statutory assignee for failing to comply with the requirements contemplated under the Supreme Court of Judicature Act 1873 ("Judicature Act 1873")101 in each of the successive assignments. The Respondent terms this as the "Statutory Assignment" issue. Third, the Respondent raises the "non-registration" issue as to whether the assignment of the rights to the Implementation Agreement was a registrable charge and the impact of its undisputed non-registration. Fourth, the Respondent submits that the assignment was made void by reason of it being a disposition of property after commencement of IPTL’s winding up proceedings, or the "Winding-up Issue."102
56.
A summary of the Parties’ arguments and the Tribunal’s analysis on these issues are set out below.

(1) Contractual Assignment

57.
Articles 15.1 and 15.2(a) of the Implementation Agreement103 provide as follows:

15.1 Assignment

No assignment or transfer by a Party of this Agreement or such Party's rights or obligations hereunder shall be effective without the prior written consent of the other Party.

15.2 Creation of Security

(a) Notwithstanding the provisions of Article 15.1, for the purpose of financing the construction and operation of the Facility, the Company may, upon prior written approval of the GOT, whose consent shall not be unreasonably withheld, assign or create a security interest to the Lenders pursuant to the Financing Documents in, its rights and interests under or pursuant to:

(i) this Agreement;

(ii) any agreement included within the Security Package;

(iii) the Facility;

(iv) the Site;

(v) the movable property and intellectual property of the Company;

or

(vi) the revenues or any of the rights or assets of the Company.

a. Parties' Submissions

58.
The Respondent contends that it has never provided either its "prior written consent’ pursuant to Article 15.1 of the Implementation Agreement or its "prior written approval" pursuant to Article 15.2 of the Implementation Agreement, to any of the purported assignments of the Implementation Agreement, and that therefore SCB HK is not a valid assignee of IPTL’s rights under the Implementation Agreement.104 Further, the Respondent submits that if properly construed, Articles 15.1 and 15.2 of the Implementation Agreement both expressly require consent, with the consequence that lack of consent invalidates an assignment.105 Also, the Respondent argues that the failure to obtain such consent renders any assignment ineffective as against GoT.106 The Respondent rejects the Claimant’s contentions that it had been estopped from asserting that no prior consent was given when it maintained silence when notified of the assignment to the Lenders in 1997. In its view, GoT had no "duty to speak", and, in any event, estoppel could only be personal to "the parties and their privies". SCB HK therefore could not take the benefit of an estoppel.107 The Respondent also rejects the Claimant’s assertion that that Article 15.2(a) should be interpreted as a mere undertaking not to assign, the breach of which would only result in damages.108
59.
The Respondent relies, inter alia, on Linden Gardens Trust Limited v Lenesta Sludge Disposals Limited, [1994] 1 AC 85 ("Linden Gardens"),109 which sets out four possible effects of a contractual prohibition on assignments, depending on the construction of the clause in question. This could be: "(i) a mere personal undertaking having no effect on the validity of the assignment, with a breach sounding only in damages; (ii) a stipulation that the assignment is to be ineffective against the debtor without affecting relations between assignor and assignee inter se; (iii) a purported bar even on the transfer of ownership of the right or its fruits as between assignor and assignee; or (iv) a stipulation, the breach of which is to entitle the debtor not merely to recover damages but to terminate the contract. "110
60.
The Respondent places emphasis on Lord Browne-Wilkinson’s observation in Linden Gardens that categories (i) and (iv) are "very unlikely to occur"111 in support of its contention that Article 15.2(a) is not a mere undertaking not to assign. It takes the view that it would be unfair to interpret Article 15.2(a) as an undertaking not to assign, because breach of such a provision would be unlikely to lead to any recoverable damage, allowing the Claimant to breach the provision with little risk of consequences.112
61.
The Respondent argues that the commercial reason for a prohibition on an assignment of a contract is that a contracting party has a genuine commercial interest in knowing the identity of the party who can decide to sue him. Where a party is a sovereign State, this interest amounts to a matter of national security and public policy.113 The Respondent would have a genuine and legitimate interest in, and concern about, the identity, nature and nationality of its contractual counterparties, particularly in relation to a power generation project such as the Facility.114
62.
In addition, according to the Respondent, the Respondent was not a party to and had no negotiating power over the provisions of the Security Deed and the other financing documents. The Respondent submits that the only effective protection for the Respondent to be able to control future assignments and to protect itself in that review and approval process was the inclusion of the provisions of Article 15.1 and 15.2(a) of the Implementation Agreement.115 In light of this, the Respondent argues that Article 15.2 should be construed such that lack of consent by the Respondent will invalidate an assignment.
63.
Furthermore, even in the absence of an express term to obtain consent with every assignment, this requirement can be impliedly read into Article 15.2(a) of the Implementation Agreement. In the Respondent’s view, every time a private party enters into a contract with a "sovereign in relation to major infrastructure public utilities projects, it is implied in the negotiations and the final agreements that the counterparty would not change without the sovereign's approval. "116
64.
The Respondent is of the view that its consent was never sought for the assignment made in 1997 to the original Malaysian lenders.117 Consequently, it asserts that any subsequent assignments by the lenders could also not be effective. The Respondent also submits that in any event, all subsequent assignments were ineffective since the Respondent’s consent was not sought for each of these.118 As a result, it argues the Claimant has no standing to invoke the arbitration clause of the Implementation Agreement.119 Further, it submits that the Claimant does not meet the contractual requirements of a Security Agent, particularly under Clause 22(H)120 of the Loan Facility Agreement.121 According to the Respondent, the result is that IPTL is the only entity capable of initiating arbitration proceedings against the Respondent under the Implementation Agreement.
65.
Finally, the Respondent argues that even if Article 15.2(a) of the Implementation Agreement does not require its consent for the transfer of an existing security interest to a successor Security Agent, the Claimant would still not be entitled to invoke the arbitration clause of the Implementation Agreement, since the word "Lender" is neither mentioned in the arbitration clause itself, nor in the definition of "Parties" or "Company." In addition, the Respondent refers to Article 24.6122 of the Implementation Agreement, which it submits expressly states that the agreement "shall not confer any right of suit or action whatsoever on any third party, except for the specific rights granted to the Lenders pursuant to Articles 15.2, 18.2 and 19.4."123 It points out that none of these provisions confer on the "Lender" any right to submit disputes to arbitration.124
66.
The Claimant relies on Linden Gardens as well, but argues that Article 15.2(a) of the Implementation Agreement, on its proper construction, is an undertaking not to assign without prior consent, breach of which sounds in damages. It distinguishes Article 15.2(a) from Article 15.1, noting that Article 15.1 explicitly states that "[n]o assignment [...] shall be effective" without prior consent while Article 15.2(a) does not use such language. In the Claimant’s view, if Article 15.2(a) was intended to render assignments ineffective in the same manner as Article 15.1, the Parties would be expected to have used the same explicit language. Hence, it argues that Article 15.2(a) must be an undertaking not to assign.125
67.
Further, the Claimant submits that Article 15.2(a) of the Implementation Agreement does not only restrict the assignment of (and creation of security interests in respect of) the Implementation Agreement, it also applies to contracts to which the Respondent is not a party to (such as the PPA and the Facility Agreement) and to noncontractual property of IPTL (such as the Site, Facility, movable property and intellectual property). The Claimant contends that, as a matter of law, Article 15.2(a) cannot render such assignments invalid; the most that Article 15.2(a) can do is render IPTL liable to pay damages for breach of contract in respect of such assignments. This according to the Claimant indicates that Article 15.2(a) must have been intended to operate as an undertaking not to assign, rather than as a prohibition on assignment.126
68.
The Claimant points out127 that GoT had been given Notice of Assignment of the Implementation Agreement to the Security Agent in 1997, and that GoT (by the Ministry of Water, Energy and Minerals) had acknowledged the same by, amongst others, countersigning on the Notice of Assignment in the form essentially as contemplated in the Security Deed,128 thus constituting an estoppel or waiver129 of the need for "prior" written consent. The Claimant contends that the same conduct may give rise to a waiver or estoppel and that the distinction between waiver and estoppel is more theoretical than real. In this regard, the Claimant cited in support the English Court of Appeal decisions in Brik om Investments Ltd v Carr130 and Business Environment Bow Lane Ltd v Deanwater Estates Ltd.131
69.
As for the Respondent’s interest in controlling the identity of lenders in light of broader public policy concerns, the Claimant contends that these alleged concerns are subjective and after-the-event statements of the Respondent’s motivations in agreeing to Article 15.2(a) of the Implementation Agreement. It notes IPTL’s conflicting subjective interest - that of having the ability to raise finance (including providing security) with minimal interference from the Respondent - and takes the view that the construction of Article 15.2(a) depends on the objective intention as to what the Parties agreed, as evidenced by the language of Article 15.2(a).132
70.
Additionally, the Claimant argues that the fact that the PPA permitted its assignment to lenders without prior consent shows that the identity of the lenders to the project as a whole was not critical to GoT and TANESCO. This is particularly since the PPA was negotiated in the presence of GoT representatives.133 Further, the Claimant argues that Article 15.2(a) of the Implementation Agreement cannot operate to invalidate the assignment of contracts to which GoT is not a party. According to the Claimant, regardless of whether Article 15.2(a) operates as an undertaking not to assign or a prohibition on assignment in respect of the Implementation Agreement, it cannot prevent the lenders from taking control of the Facility pursuant to security granted by IPTL to the lenders in respect of the PPA, the Site and the Facility. In the Claimant’s view, the argument that Article 15.2(a) of the Implementation Agreement must be interpreted as a prohibition on assignment in order to control the identity of the lenders is misconceived, because the provision, however it is interpreted, cannot achieve that outcome.134
71.
Further, the Claimant argues that, as a matter of general principle, there is no reason why a breach of an undertaking not to assign would be unlikely to lead to recoverable damages, and hence this should not be a reason to not construe Article 15.2 as an undertaking not to assign. In the present case, it so happens that the Respondent demonstrated by its conduct in 1997 that it would have given prior consent to the assignment had it been requested, so there is no loss and hence no recoverable damages.135
72.
The Claimant rejects the Respondent’s contention that every time a private party contracts with a sovereign in relation to major infrastructure public utilities projects, there is an implied term that the counterparty will not change without the sovereign's approval. It notes that the Respondent has provided no expert evidence or authority in support of this, nor any explanation of how this satisfies recognised tests for the implication of terms. Further, since Articles 15.1 and 15.2(a) already expressly address the assignment of the Implementation Agreement, there is no room to imply a further consent requirement into the contract.136
73.
Finally, the Claimant takes the view that no consent is required for subsequent assignments,137 and that it meets the contractual requirements of a Security Agent.138 As for the Respondent’s argument that the assignee cannot invoke the arbitration clause because the arbitration clause refers only to "Parties" and does not refer to the "Lenders", according to the Claimant, this argument is wrong and reflects a misunderstanding of the law of assignment. The Claimant submits that the effect of a statutory assignment is that the assignee (SCB HK) becomes the legal owner of the benefit of the assigned contract and is entitled to exercise the assignor’s rights under the contract, including the right to invoke the arbitration clause and bring an action in its own name. It does not matter that the arbitration clause only refers to the assignor and does not mention the assignee, because the assignee is stepping into the shoes of the assignor.139

b. Tribunal's Analysis

(i) From Original Lenders to Danaharta

74.
The Implementation Agreement was entered into by GoT as part of the package of incentives and assurances that GoT had given to IPTL to undertake the Project.
75.
On 28 June 1997, IPTL and a syndicate of Malaysian banks entered into the Facility Agreement.140 IPTL was the borrower of the USD 105,000,000 Loan Facility Agreement relating to the 100 MW Tegata Power Project.
76.
The banks under the Facility Agreement were:

i. Bank Bumiputra Malaysia Berhad, Kuala Lumpur ("BBMB");

ii. Sime Bank Berhad, Kuala Lumpur ("Sime Bank");

iii. BBMB International Bank (L) Ltd, Labuan ("BBMB International"); and

iv. SIME International Bank (L) Ltd, Labuan ("Sime International").

77.
BBMB was the Facility Agent and Sime Bank Berhad (Singapore Main Office) ("Sime Singapore") was the Security Agent.141
78.
A Security Deed142 was simultaneously executed under which IPTL assigned to the Security Agent "all its present and future right, title and interest in and to the Assigned Contracts Amongst the Assigned Contracts was the Implementation Agreement.143
79.
The Parties do not dispute that no "prior" written consent was given by GoT to assign any of IPTL’s rights under the Implementation Agreement.
80.
On 3 October 1997, the Notice of Assignment of the Implementation Agreement was given and acknowledged by the Ministry of Water, Energy and Minerals.144
81.
The Respondent had, in its Post-Hearing Brief, remarked145 that how Danaharta had acquired its interest in the Implementation Agreement needed to be explained before the Claimant could stake its claim as the assignee of the Implementation Agreement.
82.
To address this, the Tribunal has examined the documents submitted and ascertained that:

i. On 11 January 1999, the Sime International underwent a name change to Danaharta Managers (L) Ltd.146

ii. On 30 June 1999, pursuant to the Order of the High Court of Malaya at Kuala Lumpur, Malaysia,147 the entire banking business of Sime Bank Berhard, in Malaysia, Brunei, Thailand, Singapore and other countries, pursuant to a merger agreement between Sime Bank Berhad and RHB Bank Berhad ("RHB Bank"), was transferred to RHB Bank. The order has the effect of transferring the rights under the Implementation Agreement, and the office of Security Agent (then Sime Singapore), to RHB Bank.

iii. On 3 September 1999, pursuant to the Order of the High Court of Malaya at Kuala Lumpur, Malaysia,148 the court approved a scheme of transfer, under which certain assets and liabilities of BBMB, its shares in subsidiaries and associated companies (other than its Islamic banking business) were transferred to the Bank of Commerce (M) Berhad ("BOC") such that any BBMB instrument shall be construed as and have effect as if for any reference therein to BBMB there was substituted with a reference to BOC.

iv. By Novation Notice,149 signed by Danaharta and BBMB International on 1 September 1999, and by BBMB as Facility Agent on 15 September 1999, BBMB International’s interest in the Facility Agreement was novated to Danaharta.150

v. On 30 September 1999, BOC was renamed as Bumiputra-Commerce Bank Berhad ("Bumiputra-Commerce").151

vi. By Novation Notice signed by Danaharta (as New Bank) on 11 July 2001, and by RHB Bank (Singapore Branch) as existing bank and by Bumiputra-Commerce as Facility Agent on 16 July 2001,152 the interest of RHB Bank in the Facility Agreement was confirmed as having been novated to Danaharta. RHB Bank (Singapore Branch) (Sime Singapore, renamed following the 29 June 1999 Order153) remained the Security Agent.154

83.
Through these arrangements, Danaharta eventually had become by July 2001 the sole Bank and lender under the Facility Agreement, with Bumiputra-Commerce (formerly BBMB) remaining as the Facility Agent and RHB Bank Singapore) (formerly Sime Singapore) as Security Agent.
84.
It is clear to the Tribunal that Danaharta (formerly Sime International) was not a stranger to this transaction nor to GoT. It was an original lender (a "Bank" and "Secured Creditor" as defined in the Facility Agreement which definitions are adopted by the Security Deed)155 which had subsequently acquired the interests of all the other banks and novated all the rights of the other RHB Banks (formerly Sime Bank and Bumiputra-Commerce (formerly BBMB)). There is no doubt in the Tribunal’s mind that Danaharta acquired the full legal and beneficial title including the rights under the Security Deed and the assets represented thereunder, such as the Implementation Agreement.

(ii) From Danaharta to SCB HK

85.
By a Sale and Purchase Agreement dated 4 August 2005,156 Danaharta agreed to sell and the Claimant agreed to purchase for USD 76.1 million, the assets set out in the agreement, representing the loans and interests outstanding due from IPTL and the associated security. Upon completion of the Sale and Purchase Agreement, Danaharta executed a Deed of Assignment ("2005 Deed") in favour of the Claimant on 17 August 2005.157 The Implementation Agreement was among the "Asset Documentation" assigned to the Claimant.
86.
By a Novation Notice158 signed by the Claimant as the "New Bank" on 11 August 2005 and by Danaharta on 17 August 2005, the Claimant became the sole Bank under the Facility Agreement. RHB Bank Singapore remained the Security Agent.
87.
By letter dated 22 September 2005,159 Bumiputra-Commerce resigned from the role of Facility Agent and Standard Chartered Bank (Malaysia) Berhad agreed and signed the same letter on 17 October 2005 taking on the role as Facility Agent.
88.
By letter dated 29 October 2009,160 the Claimant removed RHB Bank Singapore as Security Agent and appointed Standard Chartered Bank Malaysia Berhad, in its stead. On 4 December 2009, the Claimant became the Security Agent.161
89.
The validity of the Facility Agreement and Security Deed, the transfer of rights and liabilities under the Facility Agreement and the liability of IPTL under it to the Claimant have been the subject matter before the English High Court162 and resolved in favour of the Claimant in Case CL-2013-000411 with the holding that the "Security Deed has become and is enforceable in accordance with the terms of t he Security Deed" and that IPTL was indebted to the Claimant in the sum of USD 168.8 million.163
90.
The issue of the assignability of the Implementation Agreement stands independently from the English Court's ruling on the validity and enforceability of the Facility Agreement and the Security Deed.

(iii) Prior Written Consent for First Assignment

91.
The Respondent's first objection is that no "prior written consent" was first obtained when the parties entered into the Security Deed purporting to assign the Implementation Agreement. It urges the Tribunal to take cognizance of the fact that the Respondent as a sovereign State, should be made aware of and be given the opportunity to know who they would be dealing with as a matter of national security and public policy.
92.
As such, "prior" written consent is mandatory. The Tribunal has some sympathy with the submission that GoT has a legitimate interest in knowing the assignee and the purpose or need for such an assignment. In this regard, the Tribunal takes the view that such a concern is fully addressed in Article 15.1 of the Implementation Agreement where any purported assignment would be rendered ineffective unless "prior written consent" was given.
93.
The words of Article 15.1 of the Implementation Agreement are clear. It is a prohibition that, absent prior written consent, "[n]o assignment or transfer [...] of this Agreement" or the "rights or obligation" under it "shall be effective." The words clearly require that to effect a valid assignment or transfer rights and obligations under the Implementation Agreement the "other Party['s]" prior written consent must be obtained. By this wording, GoT was assured that it would not be dealing with any Party other than IPTL or such other person that GoT approved, thus safe-guarding GoT’s national and security interest, as it has urged upon the Tribunal.
94.
Article 15.2 of the Implementation Agreement however, creates the exception, that "Notwithstanding the provisions of Article 15.1[...]", "the Company" (viz. IPTL), could "for the purpose of financing the construction and operation of the Facility [...] assign or create a security interest to the Lenders pursuant to the Financing Documents in, its rights and interests under or pursuant to" inter alia, the Implementation Agreement, if IPTL had obtained "prior written consent."
95.
It is clear from Article 15.2, that GoT accepted that IPTL would need financing for the Facility and had, by this provision, agreed that for that purpose, IPTL could "assign or create a security interest" in favour of its "Lenders" subject only to IPTL having obtained "prior written consent" from GoT.
96.
It is common ground that no "prior" written consent was given. It could not, however, be disputed that "written consent" was subsequently given in the form of:

i. Notice of Assignment dated 3 October 1997164 given by IPTL and Sime Bank Berhard

Singapore which was signed by the Ministry of Water, Energy and Minerals. In it GoT

"acknowledge[d] the receipt of the Notice of Assignment" and agreed -

"not [to] terminate the IMA [i.e. Implementation Agreement] except as provided in Article 19.4 of the IMA;"

and

"send to the Security Agent, a copy of any notice required to be given to IPTL pursuant to Articles 19.1 and 19.2 of the IMA."

ii. Letter from the Minister of Finance dated 13 October 1997165 addressed to IPTL and copied to the Prime Minister, Minister of Energy and Minerals, Minister-Planning, Attorney-General, Chief Secretary, and MD TANESCO expressing that -

a) "In accordance with Article 15.2 of the Implementation Agreement, all relevant authorities will agree to the execution of the assignments of the Implementation Agreement, the Power Purchase Agreement, the Licence and consents relating to the Project."

b) "Unless you have been notified in writing by us to the contrary, all Project agreements, approvals, licences and consents executed between the Government and IPTL or granted to IPTL remain in full force and effect."

iii. Diplomatic Note dated 28 October 1997166 from the Tanzanian Ministry of Foreign Affairs to the Malaysian Ministry of Foreign Affairs re-affirming GoT’s position set out in (ii)(a) and (b) above.

97.
These acknowledgments of GoT clearly recognise that it consented to the assignment of the Implementation Agreement. The acknowledgements constitute both consent to the assignment and the relinquishment of the right to require prior consent. The consent is given by GoT with express reference to Article 15.2 of the Implementation Agreement, and thus in contemplation of the requirement of prior consent. This, in the Tribunal’s view, amounts to a waiver by GoT of the lack of prior written consent. Accordingly, the Tribunal finds that the absence of prior written consent by GoT is not fatal to the validity of the assignment.
98.
The Respondent submits that even if the Tribunal should so find, the Claimant may not rely upon an estoppel, because, under Tanzanian law, estoppel is personal to the representee and may not be relied upon by an assignee. In its view, "SCB HK could not take an assignment of the benefit of an estoppel." As pointed by the Claimant this position was incorrectly taken. The case cited by the Respondent167 to support its contention was not one concerned with whether estoppel could be relied upon by an assignee on a representation made to the assignor. In that case, the court was dealing with a lessee who had wanted to assign the lease to a third-party and had meanwhile permitted the intended assignee to occupy and use the premises and paying rent directly to the lessor. It was said that by accepting the rents, the lessor had represented to the lessee that the third party was the assignee and would therefore be estopped from denying that there was a valid assignment. This was rejected by the court. In doing so the court made the statement that an "estoppel by representation is personal to the parties" in accepting the rent payments made by the third-party it could not have made any representation to the lessee. There was in that case no assignment to be found much less any suggestion that it was a decision to the effect that an assignee could not take the benefit of an estoppel. In this arbitration, however, it was GoT who had signed and acknowledged the Notice of Assignment and returned it to the lender’s Security Agent. GoT could not now be permitted to go back to say that it could not be relied on by the assignee.
99.
In any event, even if it could be said that estoppel could not be established because estoppel could be said to operate in favour of the original representee, the Tribunal nevertheless finds that the consent of GoT given by its signing of the Notice of Assignment amounts to a waiver of any lack of prior consent. It could not then be permitted to rely on any lack of prior written notice to vitiate the consent expressly given. Such a waiver subsists notwithstanding any subsequent assignment.168

(iv) Prior Written Consent for Successive Assignments

100.
The Respondent’s second argument under the Contractual Assignment issue is that the requirement for prior written approval was not obtained between 1997 and 2005 "for each of the successive assignments." It is the Respondent’s case that the Implementation Agreement is structured on the basis that IPTL’s rights might be successively assigned but that each assignment requires prior written approval to be effective. In support of this, the Respondent cited in its Post-Hearing Brief169 the case of Barbados Trust Company Ltd v Bank of Zambia and Bank of America170 to suggest that a similar provision in that case had been interpreted to require each and any subsequent assignment by each of the banks to first obtain "prior written consent." The Tribunal notes however that the specific provision in that case was worded differently in that it required -

(A) Each Bank may at any time and from time to time assign all or any part of its rights and benefits in respect of the Facility to any one or more banks or other financial institutions (an "Assignee"), provided that any such assignment may only be effected if [...] the prior written consent thereto of the Borrower shall have been obtained (such consent not to be unreasonably withheld and to be deemed to have been given if no reply is received from the Borrower wi thin fifteen days after the giving of a request for consent by a Bank) [...].171

101.
The Tribunal notes that the issue before the English court related primarily to the requirement for a request being made and "deemed consent" following a period of lapse. The court was not dealing with the need for successive consents. In addition, the intervening assignments were made to and by non-financial institutions in breach of the contractual restrictions. There is, therefore, no useful analogical reasoning that can be drawn from that decision to assist the case before this Tribunal.
102.
In the Tribunal’s view, Article 15.2 of the Implementation Agreement must be construed by the plain words and in its functional role as an exception to the prohibition set out in Article 15.1 of the Implementation Agreement. Article 15.2 sets out:

i. the purpose for which an assignment is to be allowed as - "financing the construction and operation of the Facility";

ii. the permissible assignees: the "Lenders pursuant to the Financing Documents"; and

iii. the party required to seek consent: "the Company" (viz. IPTL was to be the borrower under the Financing Documents).

103.
It appears clear to the Tribunal that Article 15.2 of the Implementation Agreement specifically made an exception for IPTL to "assign or create a security interest" as required under the Financing Documents. To avail itself of this right to assign, IPTL must satisfy the elements listed in paragraph 102(i) to (iii) above.
104.
The Respondent has argued that the Implementation Agreement is designed so that IPTL’s rights might be assigned on multiple occasions on the basis that the definition of "Company" includes not only IPTL but also "its permitted successors and assigns." Thus, when this provision states that "the Company" may assign "upon prior written approval of the GOT," this ability, and this restriction on that ability applies to any entity that is a successor or assignee, which had first obtained the rights through a permitted assignment. The Respondent’s argument, however, ignores the definition of "Lenders" in the Implementation Agreement, which is defined as "the lenders party to the Financing Documents, together with their successors and assigns "172 (with no "permitted" preceding the term).
105.
In this context, the Tribunal’s view is that any subsequent assignment by the banks would be an assignment by the banks qua lender holding the rights and interest of the Implementation Agreement qua lender under the Security Deed and not as a "permitted assignee" of the Company as GoT has asserted. It follows that any subsequent assignment by the original banks to other banks would not require any further consent from GoT. In other words, the carve out in Article 15.2 of the Implementation Agreement is that once the lenders acquire rights, the lenders do not have to secure further approvals from the parties to validly transfer their rights.
106.
Counsel for the Parties spent much time on the consequences of non-compliance with the "prior written consent" requirement under Article 15.2 of the Implementation Agreement, arguing whether the same merely sounds in damages or would render any such assignment invalid or ineffective against GoT. Interesting observations have been made in particular to the English House of Lord’s decision in Linden Gardens. In view of the Tribunal’s finding that the assignment of the Implementation Agreement received express written consent from GoT under Article 15.2, the consequences for non-compliance with the prior consent requirement under Article 15.2 of the Implementation Agreement requires no further determination.

(2) Statutory Assignment under Tanzanian Law

107.
The Respondent has raised several grounds upon which it relies to challenge the validity of the assignment in favour of the Claimant under the laws of Tanzania. These are discussed under the following sub-heads: (a) requirements of the Judicature Act 1873; (b) notice of assignment; (c) status of the Security Agent; (d) non-registration of charge in violation of Section 79 of the Companies Ordinance; and (e) disposition in winding-up in breach of Section 172 of the Companies Ordinance.

a. Requirements of the Judicature Act 1873

(i) Parties' Submissions

108.
Clause 3.2.1 of the Security Deed provides:173

3.2 Assignments: The Borrower [IPTL] with full title guarantee and as continuing security for the payment and discharge of all Liabilities hereby assigns to the Security Agent [now SCB HK] for the benefit of the Secured Creditors:

3.2.1 all its present and future right, title and interest in and to the Assigned Contracts, including all moneys which at any time may be or become payable to the Borrower pursuant thereto and the net proceeds of any claims, awards and judgements which may at any time be receivable or received by the Borrower pursuant thereto; [...]

109.
The Parties are in agreement174 that the assignment of the Implementation Agreement to the Security Agent pursuant to Clause 3.2.1 of the Security Deed must comply with the requirements of Section 25(6)175 of the Judicature Act 1873, the legislation applicable to statutory assignments in Tanzania.176
110.
The Respondent argues that the security interest created by Clause 3.2.1 of the Security Deed is not absolute as it is by way of charge only and, therefore, does not operate to transfer any proprietary interest.177 Furthermore, it submits that on a proper construction of the Security Deed, various provisions including Clauses 4.1, 4.2 to 4.6, 5.4.4, 9.3, 11 and 12 indicate that the assignment was by way of charge only.178
111.
The Respondent also contends that the activities of IPTL demonstrate that the Security Deed does not provide for more than a charge. In particular, IPTL continued to run its activities, to issue invoices to and to collect payments from TANESCO for years after the execution of the Security Deed,179 actively participated in the ICSID 1 arbitration against TANESCO, commenced the Interpretation Proceedings against TANESCO, and attempted to bring claims against GoT under the Guarantee.180 According to the Respondent, case law demonstrates that an assignor maintaining its rights under the assigned contract up until the moment when it defaults on its obligations vis-à-vis the assignee is a "typical example of non-absolute assignment. "181
112.
The Respondent also refutes the Claimant’s attempt to rely on the PPA Decision, as the Claimant has noted that the tribunal in the PPA Arbitration ruled that Clause 3.2.1 of the Security Deed constitutes a valid statutory assignment,182 and that counsel for TANESCO expressly conceded likewise.183 The Respondent contends that this decision is wrong because the PPA Tribunal disregarded key passages of the relevant authorities and TANESCO's expert evidence. It maintains that the exchange between counsel for TANESCO and the PPA Tribunal was unclear, that counsel did not concede, or did not intend to concede, the point, and that the PPA Tribunal should not have reached its decision on the basis of this unclear exchange.184
113.
Finally, the Respondent argues that the notice requirement was not satisfied as there are doubts as to the authenticity of the Notice of Assignment, and the Notice of Assignment was contradicted by various activities of IPTL as stated in paragraph 111 above.185
114.
The Claimant contests the Respondent’s construction of the Security Deed, taking the view that various provisions of the Security Deed are indicative of an absolute assignment, while others do not indicate that the assignment is by way of charge only.186 In particular, the Claimant contends that the Respondent’s arguments are based on a misapprehension that, because IPTL remains responsible for performing the assigned contract, the assignment was not absolute. The Claimant draws a distinction between the transfer of the benefit of a contract (an assignment) and the transfer of the benefits and burdens of the contract (a novation).187 Further, the Claimant contends that the Respondent fails to distinguish between provisions of the Security Deed which relate specifically to assigned contracts, and general provisions that relate to the broader variety of security created by the Security Deed.188
115.
The Claimant disagrees that the activities of IPTL demonstrate that the security interest created by Clause 3.2.1 of the Security Deed is by way of charge only. In its view, the nature of the assignment under the Security Deed is a matter of construction. Further, it submits that post-contractual conduct is irrelevant to the construction of the contract.189
116.
In any event, in the Claimant’s view, the conduct relied upon by the Respondent is not inconsistent with an absolute assignment. The fact that IPTL may have carried out the mechanical process of invoicing and collecting payments under the PPA does not mean that the Security Agent was not the legal owner of the rights under the PPA. As for the ICSID 1 arbitration, that was brought by TANESCO against IPTL on the basis that IPTL was in default of its obligations under the PPA. The Claimant submits that this was appropriate as IPTL remained party to the PPA and was responsible for performing its obligations under the PPA.190
117.
Similarly, the Claimant contends that as the Interpretation Proceedings were to interpret the ICSID 1 Award between TANESCO and IPTL, it was appropriate for the interpretation request to be made by IPTL. As for IPTL's conduct in respect of the Guarantee, the Claimant asserts that this has no bearing on the contracts assigned under the Security Deed, and the Claimant has not sought to bring a claim against the Respondent under the Guarantee.191 Finally, even if post-assignment conduct was relevant, the Claimant submits that, none of the conduct related to the assignment of the Implementation Agreement.192
118.
As for the PPA Tribunal’s decision, the Claimant contends that it was a reasoned, robust and correct decision.193 According to the Claimant, the PPA Tribunal did not ignore relevant authorities or expert evidence, and TANESCO also clearly conceded that the assignment was a statutory assignment.194 Finally, the Claimant rejects the Respondent’s doubts as to the authenticity of the Notice of Assignment as baseless, and maintains that the requirement of notice was satisfied. The Claimant also notes that there is no requirement under the Judicature Act 1873 that the notice be countersigned or acknowledged by the counterparty to the assigned contract.195

(ii) Tribunal's Analysis

119.
Section 25(6) of the Judicature Act 1873196 provides that:

Any absolute assignment, by writing under the hand of the assignor (not purporting to be by way of charge only), of any debt or other legal chose in action, of which express notice in writing shall have been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be, and be deemed to have been effectual in law (subject to all equities which would have been entitled to priority over the right of the assignee if this Act had not passed,) to pass and transfer the legal right to such debt or chose in action from the date of such notice, and all legal and other remedies for the same, and the power to give a good discharge for the same, without the concurrence of the assignor: Provided always, that if the debtor, trustee, or other person liable in respect of such debt or chose in action shall have had notice that such assignment is disputed by the assignor or any one claiming under him, or of any other opposing or conflicting claims to such debt or chose in action, he shall be entitled, if he think fit, to call upon the several persons making claim thereto to interplead concerning the same, or he may, if he think fit, pay the same into the High Court of Justice under and in conformity with the provisions of the Acts for the relief of trustees.

120.
The Respondent’s submission is that Tanzanian law requires that a statutory assignment must comply with the requirements under Section 25(6) of the Judicature Act 1873 and that "any absolute assignment [...] of any debt or other legal chose in action" must be: (i) an absolute assignment and not a mere charge; (ii) in writing; (iii) signed by the assignor; and with (iv) express notice to the debtor.
121.
The Respondent asserts that the assignment of the Implementation Agreement under the Security Deed was (i) not absolute but by way of charge only; and (ii) that there was no express notice given to that effect.
122.
The Tribunal notes that it cannot be disputed that in order to determine whether an assignment is absolute or by way of charge only, one must analyse by the words of the written assignment, in this case by the Security Deed.
123.
In examining the Security Deed, the Tribunal notes that Clause 3.1197 of the Security Deed indeed creates "charges in favour of the Security Agent [...]." Further, Clauses 1.1, 3.1, 3.2, 4.1 (3) of the Security Deed provide as follows -

1.1 "Assigned Contracts" means the EPC Contract, the EPC Performance Bond, the O&M Contract, the O&M (Sub) Guarantee, the FSA, the FSA Performance Bond, the IMA, the PPA and all Consents and the Licence.

[…]

3.1 Charging Provision: The Borrower with full title guarantee and as continuing security for the payment and discharge of all Liabilities hereby charges in favour of the Security Agent for the benefit of the Secured Creditors:

3.1.1 by way of mortgage of the right of occupancy [...] the Real Property in Tanzania now belonging to it;

3.1.2 by way of first fixed equitable charge, all Real Property now belonging to it [...] and all Real Property acquired by it after the date of this Security Deed.

3.1.3 by way of first fixed charge:

(i) all Book Debts;

(ii) all its present and future Permitted Investments, Rights attaching or relating to Permitted Investments and all Assets hereafter belonging to the Borrower and deriving from Permitted Investments or such Rights;

(iii) all its present and future goodwill and uncalled capital for the time being;

(iv) all its present and future Intellectual Property and the benefit of all present and future licences and sub-licences of Intellectual Property granted either by or to it;

3.1.4 by way of first floating charge, its undertaking and all its Assets, both present and future (including Assets expressed to be charged by paragraphs 3.1.1 to 3.1.3 above).

3.2 Assignments: The Borrower with full title guarantee and as continuing security for the payment and discharge of all Liabilities hereby assigns to the Security Agent for the benefit of the Secured Creditors:

3.2.1 all its present and future right, title and interest in and to the Assigned Contracts, including all moneys which at any time may be or become payable to the Borrower pursuant thereto and the net proceeds of any claims, awards and judgements which may at any time be receivable or received by the Borrower pursuant thereto;

3.2.2. all its present and future right, title and interest in and to all insurances and all proceeds in respect of Insurances and all benefits thereof (including all claims of whatsoever nature relating thereto and returns of premiums in respect thereof);

3.2.3. all its present and future Rights in relation to its Real Property (except those charged by Clauses 3.1.1), including all Rights against all past, present and future undertenants of its Real Property and their respective guarantors and/or sureties; and

3.2.4. all its present and future Right, title and interest in and to the Bank Accounts.

3.3 Ranking: The floating Charge created by Clause 3.1.4 shall rank behind all the fixed Charges created by or pursuant to this Security Deed but shall rank in priority to any other security hereafter created by the Borrower except for security permitted by Clause 4.2 and except for security ranking in priority in accordance with Clause 9.3.5.

[...]

4.1(3) Notwithstanding any other provision hereof the Security Agent shall not by virtue of the Security created by or pursuant to this Security Deed be or become obliged or liable under or in respect of the Secured Property or any part thereof:

(a) to perform or observe any of the obligations of the Borrower hereunder;

(b) to make any payment or any enquiry in connection therewith; or

(c) to present or file any claim or take any other action to collect or enforce any payment due to the Borrower or, by virtue, of the Security created by or pursuant to this Security Deed, to the Security Agent.

124.
There can be no dispute that Clause 3.1 of the Security Deed is intended to create a charge over the Assets which when so charged constitutes the "Charged Assets" as defined in Clause 1.1., Clause 3.3 further provides for the ranking of the charges referred to in Clauses 3.1, 4.2 and 9.3.5.
125.
The Security Deed thus makes a clear distinction between the charges created in relation to the "Assets" as described in Clause 3.1 and the assignment created under Clause 3.2, which uses the term "assigns" without any condition or qualification of "all its present and future right, title and interest in and to the Assigned Contracts." The term "Assigned Contracts" as defined falls outside the scope of Assets contemplated under Clause 3.1. On a plain reading, the Tribunal is satisfied that Clause 3.2 creates an absolute assignment and not an assignment by way of charge only.
126.
The Respondent in its Post-Hearing Brief also submitted that Clause 4.1(3)(c) of the Security Deed was a "retention of rights by IPTL including the right to bring claims" as another indication that the assignment was not absolute but one by way of charge. In the Tribunal’s view this is incorrect. Clause 4.1(3)(c) is not a retention of right in favour of IPTL. It is instead a reservation that, notwithstanding the assignment, the Security Agent is under no obligation to take action to present or file claims against any other party. It does not, however, deprive the assignee of the right to do so if it so wishes.
127.
The Tribunal also does not agree that the mere fact that the Security Deed provides for the continuing performance by IPTL of the "Assigned Contracts" supports the Respondent’s suggestion that the assignment could not be an absolute one. Such an argument ignores the very attribute of an assignment as transferring rights and not burdens and obligations. The Tribunal is satisfied that there is nothing in the Security Deed that qualifies or limits in any manner the assignment of the Assigned Contracts (which by definition include the Implementation Agreement).

b. Notice of Assignment

128.
There can no longer be any argument that notice was not given by the Security Agent in a formal Notice of Assignment of the Implementation Agreement under the Security Deed as it was acknowledged by the GoT.198 The Respondent could argue that there is a requirement that at each and every step in the chain of assignments, leading to and concluding with the 2005 Deed from Danaharta to SCB HK, must comply with the requirement of notice to the Government. The Respondent submits that a notice sent to the Government after the 2005 Deed would not only need to notify the Government of the details of that assignment, but also of any earlier steps which had not previously been expressly notified. It also cites in support the decision of the English Court of Appeal in E Pellas v Neptune Marine199 to argue for "each successive assignment [had] to comply with the 1873 Act."200 In that case, the assignor of an insurance policy taken out by the insured, had sued the insurer for the proceeds after the perils insured had occurred. The insured had incurred unpaid premiums due on other policies taken out with the insurer and sought to set-off these amounts against the sum due to the assignee. The Court of Appeal rejected the plea of set-off even though the insurer argued that it was prejudiced by lack of notice of the assignment prior to extending the credit to the insured. Admittedly, the court was concerned with the Policies of Marine Insurance Act 1868 rather than the Judicature Act 1873. The court did nevertheless say in obiter, that - "[t]he plaintiffs cannot succeed as assignees of a debt or chose in action pursuant to the Supreme Court of Judicature Act, 1873, s. 25, sub-s. 6, because the defendants have had no notice of the assignments [...]."201 Still, there is nothing in the statement to suggest that the each and every assignment must require a separate notice of assignment.
129.
GoT also quoted Lord Denning’s statement in WF Harrison & Co Ltd v Burke202 as support -

[T]he notice in writing of the assignment is an essential part of the transfer of title to the debt, and, as such, the requirements of [Section 136 of] the [Law of Property] Act [1925] must be strictly complied with, and the notice itself, I think, must be strictly accurate - accurate in particular in regard to the date which is given for the assignment; and even though it is only one day out, as in this case, the notice of assignment is bad.

130.
The Tribunal agrees with GoT that the mischief which the Judicature Act 1873 targeted was a debtor faced with claims by assignees it did not know; the "key requirement is the full knowledge of the debtor so as to avoid confusion. "203
131.
The Claimant had at the hearing pointed out that GoT was notified of the Claimant’s interest at the latest by 17 December 2009204 when it informed GoT that -

SCB HK has also been assigned the Implementation Agreement dated 8 June 1995 (the "Implementation Agreement") entered into between IPTL and the Government of Tanzania ("GOT").

132.
The Respondent then took the position that this notice made no mention of when the rights to the Implementation Agreement had left Sime Bank, or any details in between and therefore fell short of the notice required under the Judicature Act 1873.
133.
The Claimant had also tendered its letter of 3 December 2013205 in which it notified GoT of the occurrence of certain "Events of Default" under the Implementation Agreement and in particular that -

By a Security Deed dated 28 June 1997, IPTL assigned all of its present and future right, title and interest in and to the Implementation Agreement to the Security Agent in connection with a US$ 105,000,000 Loan Facility Agreement provided to IPTL by a consortium of foreign lenders. The GoT was given notice of the assignment on 3 October 1997, which the GoT acknowledged. Standard Chartered Bank (Hong Kong) Limited ("SCB HK") is now the Security Agent, having acquired the loan (and related security) from the previous lenders in 2005. SCB HK is therefore entitled (as assignee) to exercise all rights and remedies granted to IPTL under the Implementation Agreement.

134.
The Respondent maintained that this letter still left it confused as to how SCB HK is supposed to have acquired the rights under the Implementation Agreement and that there was no mention of the assignment from Sime Bank to RHB Bank.
135.
From these documents, it is clear to the Tribunal that GoT had, at the very latest, since 3 December 2013 (if not by 17 December 2009) been aware that the Claimant asserted its interest in the Implementation Agreement as assignee and the GoT could not therefore complain that it did not know or had no notice of who the assignee was nor should it be confused by any possible adverse claim by any competing claimant under the Implementation Agreement. In fact, GoT has not identified any competing claim.

c. Status of the Security Agent

136.
The Respondent had also raised the fact that the Security Agent was changed from Sime Singapore to RHB Bank Singapore and then to the Claimant. The Tribunal notes that (as discussed in paragraph 82(ii) above), there was in fact no entity change from Sime Singapore to RHB Bank Singapore. It was the re-naming of Sime to RHB following a merger sanctioned by the Malaysian High Court. The change in entity of the Security Agent also did not occur in 2005 following the sale by Danaharta to SCB HK.206
137.
This then led GoT to argue that when Danaharta assigned the rights to SCB HK, Danaharta did not and could not have assigned its role as Security Agent to SCB HK. The Respondent further argues that "RHB remained the Security Agent until 29 October 2009, when it was removed from such position by SCB HK" and SCB HK became the Security Agent on 4 November 2009 by naming itself as the Security Agent.207 The Tribunal notes that this letter208 was not communicated to GoT.
138.
In this regard, the Tribunal notes that the Implementation Agreement was signed by Sime Singapore as the Security Agent, but it was expressly described as -

[...] in its capacity as Security Agent under the Facility Agreement (the "Security Agen t") which expression includes any successor appointed as Security Agent.209

139.
The role of the Security Agent as spelt out in Article 22 of the Facility Agreement210 is described as that of an "agent and principal" only. In other words, the Security Agent's role is merely to hold the security only on behalf of the principal lenders, following the sale by Danaharta to SCB HK, the sole lender was SCB HK. According to Article 22(H) of the Facility Agreement,211 the right to appoint and remove the Security Agent lies with the "Majority Banks",212 which by 2009 was only SCB HK and no other. In the Tribunal’s view, the change of Security Agent from RHB Bank Singapore to SCB HK does not impact upon the right of SCB HK as the assignee as Lender under the Facility Agreement and the assignee of the rights under the Implementation Agreement.
140.
The Tribunal is satisfied that:

i. the Notice of Assignment of 3 October 1997213 was sufficient notice to GoT of the assignment by IPTL of the Implementation Agreement to the lenders and the Security Agent;

ii. the subsequent notices of SCB HK on 17 December 2009214 and 3 December 2013215 to GoT were sufficient to inform GoT of the Claimant's interest as sole lender and Security Agent referred to under the Implementation Agreement; and

iii. the assignment made under Clause 3.2.1 of the Security Deed is in the nature of an absolute assignment and not by way of a charge, compliant with the Section 25(6) of the Judicature Act 1873.

d. Non-Registration of Charge under Section 79 of the Companies Ordinance 1921

(i) Parties' Submissions

141.
It is common ground that the assignment of the Implementation Agreement to the Security Agent under Clause 3.2.1 of the Security Deed was not registered with BRELA as a charge under Section 79 of the Companies Ordinance 1921 (Tanzania). However, the Parties disagree as to the requirement for such registration, as well as, the effect of the non-registration on the validity of the assignment of the Implementation Agreement.
142.
Sections 79(1) and (2) of the Companies Ordinance 1921 (Tanzania) states as follows:

(1) Subject to the provisions of this Part of this Act, every charge created after the fixed date by a company registered in Tanzania and being a charge to which this section applies shall, so far as any security on the company's property or undertaking is conferred thereby, be void against the liquidator and any creditor of the company, unless the prescribed particulars of the charge, together with the instrument, if any, by which the charge is created or evidenced, or a copy thereof verified in the prescribed manner are delivered to or received by the Registrar for registration in manner required by this Act within forty two days after date of its creation, but without prejudice to any contract or obligation for repayment of the money thereby secured, and when a charge becomes void under this section the money secured thereby shall immediately become payable.

(2) This section applies to the following charges -

(a) a charge for the purpose of securing any issue of debentures;

(b) a charge on uncalled share capital of the company;

(c) a charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale;

(d) a charge on immovable property wherever situate, or any interest therein;

(e) a charge on book debts of the company;

(f) a floating charge on the undertaking or property of the company;

(g) a charge on calls made but not paid;

(h) a charge on a ship or any share in a ship;

(i) a charge on goodwill, a patent or a licence under a pate nt, on a trademark or on a copyright or a licence under a copyright. [...]216

143.
The Respondent argues that even if the Tribunal were to hold that Clause 3.2.1 of the Security Deed effects a statutory assignment, the security interest created is void under Tanzanian law as it was not registered as required under Section 79 of the Companies Ordinance 1921 (Tanzania). It contends that this interpretation is confirmed by the PwC Report relied on by the Claimant.217
144.
The Respondent relies on the wording of Section 79, as well as Tanzanian case law, in particular the decision of the Court of Appeal of Tanzania in Shinyanga Regional Trading Company Limited and Another v National Bank of Commerce ("Shinyanga"),218 to support the contention that the failure to register a registrable charge voids it not only against liquidator or secured creditor, but against any creditor.219
145.
The Respondent rejects the Claimant’s contention that Shinyanga was decided per incuriam. It notes that stare decisis is an essential feature of Tanzanian law, and points out that in the similar case of Marungu Sisal Estate Limited v CRDB Bank Limited ("Marungu"),220 no appeal was made to the Court of Appeal on the basis that Shinyanga had been decided per incuriam.221 It urges the Tribunal not to give weight to Flaux J’s view that Shinyanga was decided per incuriam, because until the Court of Appeal of Tanzania overrules Shinyanga, the interpretation of Tanzanian law is that that decision is binding law in Tanzania.222 Further, any concessions made by TANESCO’s counsel in the PPA Arbitration on this point were made in passing, and in any event, the Respondent is not bound by them.223
146.
The Respondent is also of the view that the assignment of the Implementation Agreement was a charge on book debts that should have been registered under Section 79 of the Companies Ordinance 1921 (Tanzania). The Respondent asserts that as the PPA was held by the PPA Tribunal to amount to a charge on book debts, the Implementation Agreement is likewise registrable, because the two agreements were designed to work together and form one and the same transaction. Further, the Respondent contends that the PPA Tribunal found that Clause 3.2.1 of the Security Deed as a whole needed to be registered under Section 79 of the Companies Ordinance 1921 (Tanzania). Additionally, the fact that the Security Deed has a separate provision addressing the assignment of insurance contracts, according to the Respondent, indicates that the Implementation Agreement is not a contingent contract but a book debt.224 Finally, due to the integrated nature of the Security Deed, the Respondent submits that it is not possible to sever valid charges, if any, from charges that are invalid for want of registration.225
147.
Alternatively, the Respondent submits that, if the Tribunal finds that such security should be granted relative effect despite its lack of registration, the Respondent contends that such effect is confined to the relationship between the Claimant and IPTL and that the Claimant is unable to derive any rights therefrom vis-à-vis GoT.
148.
The Claimant argues that the assignment of the Implementation Agreement was not a charge on book debts within the meaning of Section 79(2) of the Companies Ordinance 1921 (Tanzania) and was not required to be registered. While the PPA might be regarded as entailing a book debt due to the expectation of capacity payments, this is not the case for the Implementation Agreement. Rather, the Implementation Agreement is a contingent contract insofar as payments only become due from the Respondent as damages or compensation, in the event that the protections guaranteed by the Respondent are breached.226 Although both agreements are part of a suite of project agreements, they are fundamentally distinct in nature.227 The security created by the assignment of the Implementation Agreement was not a charge on book debts. Further, it asserts that the Respondent’s reliance on the PPA Tribunal’s ruling is misplaced, as the PPA Tribunal did not decide that all security created by Clause 3.2.1 of the Security Deed was registrable.228
149.
The Claimant also submits that to the extent that Clause 3.2.1 of the Security Deed created other charges which were registrable, and assuming that those charges are invalid for want of registration,229 those invalid charges may be severed from the valid charge in respect of the assignment of the Implementation Agreement. Further, the Claimant submits that this was the position taken in the PPA Decision and is supported by pre-reception English authority (binding as a matter of Tanzanian law), and subsequent English and Australian cases. In the Claimant’s view, the principle of severability applies even when security is created in the same instrument, arises in respect of the same project, and relates to the same underlying property. This according to the Claimant is reinforced by the language of Section 79(1) of the Companies Ordinance 1921 (Tanzania), which distinguishes between the "charge", which will be void against the liquidator or secured creditor, and the "instrument... by which the charge is created or evidenced, which is not so voided. "230
150.
Alternatively, the Claimant submits that even if the assignment of the Implementation Agreement was required to be registered, or even if the charge created by the assignment of the Implementation Agreement cannot be severed from charges that required registration, the effect of non-registration is not to invalidate the charge against the whole world. According to the Claimant, Section 79 of the Companies Ordinance 1921 (Tanzania) only operates to invalidate registrable but unregistered charges against a liquidator, administrator or secured creditor. It argues that this is clear from the plain language of Section 79 and supported by English authorities.231 As IPTL was not in liquidation, and there was no secured creditor with an interest in the benefit of the "Assigned Contracts", the charges created by Clause 3.2.1 of the Security Deed remain valid. Further, it asserts that no reliance can be placed by the Respondent on the position in the PwC Report on this point, because at the time the Report was issued, a Liquidator had been appointed over IPTL.232
151.
The Claimant also argues that the decision in Shinyanga is per incuriam, as it does not properly reflect Tanzanian law, and the Tribunal is entitled not to apply it.233 The decision ignores the plain language of the legislation, and it was made without reference to binding pre-reception date authorities and other persuasive authorities, and nor is it supported by Marungu. According to the Claimant, Flaux J correctly rejected the Shinyanga decision, and the PPA Tribunal correctly held that the unregistered charge remained valid in the absence of a liquidator. Additionally, TANESCO’s counsel did in fact concede that a failure to register a registrable charge would not invalidate the charge unless the company was in liquidation.234

(ii) Tribunal's Analysis

152.
On the basis of the Tribunal’s finding that the assignment made under Clause 3.2.1 of the Security Deed is in the nature of an absolute assignment and not by way of a charge, this question requires no further consideration. However, as the Parties have debated this issue extensively, the Tribunal will proceed to deal with them in the following paragraphs.
153.
The key question that requires the Tribunal’s determination is whether the assignment of the Implementation Agreement, even if it amounts to a charge only, is a "charge to which Section 79(2)" of the Companies Ordinance 1921 (Tanzania) applies.
154.
From the list enumerated in Section 79(2), only the descriptive of "book debts" appears to be the closest possible category into which the Implementation Agreement could fall into.
155.
Under the Implementation Agreement, the bundle of rights that have been promised by the GoT to IPTL could be described as follows:235

i. Article V : The "exclusive right to design, finance, insure, construct, complete, own, operate, and maintain the Facility in accordance with the terms and conditions contained in this Agreement and the Laws of Tanzania".

ii. Article VII : Support of GoT to:

a) obtain consents from regulatory agencies;

b) use its good offices to support IPTL’s performance of its obligations;

c) attach non-discriminatory terms and conditions to the issuance or renewal of any of the Consents as are in accordance with the Laws of Tanzania;

d) take actions as are reasonable and appropriate under the circumstances to ensure that IPTL receives the fiscal incentives, concessions, financial arrangements, and any other benefits provided under the "Policy Framework".

iii. Article IX (9.7) : Avoiding "Double Jeopardy" - "Settlement or waiver in writing by TANESCO of any dispute or breach under the Power Purchase Agreement shall be binding on the GOT with respect to the identical issue or claim."

iv. Article XI : Assistance with immigration controls.

v. Article XIII : Entitlement for imports and exports of items needed.

vi. Article XIV : Consent to open and operate Foreign Currency Accounts.

vii. Article XVI : Assurances against discriminatory actions, expropriation, compulsory acquisition and nationalisation of capital or assets of IPTL.

viii. Article XVII (17.7) : Special compensation for Force Majeure events.

ix. Article XVIII : Tax exemptions.

x. Article XXII and Schedule 1 : Undertaking to Guarantee.

xi. Article XXIV (24.10) : "Most Favoured Nation" treatment.

156.
The concept of a "book debt" normally refers to the money received or receivable in the ordinary course of business of a company. These would normally include, among others, any money or receivables for sale of services or goods, proceeds of dispositions, or, hire, bank balances, in cash or cash equivalent and so forth. An assignment of a long-term contract for the sale of power under the PPA would no doubt give rise to receivables and constitute book debts. It is, however, rather implausible to suggest the bundle of rights and privileges and promises of support set out in the Implementation Agreement are "book debts" contemplated under Section 79 of the Companies Ordinance 1921 (Tanzania). None of the evidence or arguments show in what manner the rights given by GoT under the Implementation Agreement are akin to receivables and could constitute "book debts ".
157.
On first principles even if the assignment of the Implementation Agreement constitutes some form of "charge", it is nevertheless not a charge of a "book debt" or any other kind of charge under Section 79(2) of the Companies Ordinance 1921 (Tanzania). There is accordingly no requirement for the "charge" to be registered. It follows that there is no need for the consideration of whether a failure to register would render the same void against GoT or only against the liquidator.

e. Breach of Section 172 of the Companies Ordinance

(i) Parties' Submissions

158.
The Respondent argues that that the transfer of the loan from Danaharta to SCB HK in 2005 was invalid, because it breached Section 172 of the Companies Ordinance 1921 (Tanzania).
159.
Section 172 of the Companies Ordinance 1921 (Tanzania) states that:236

172. Avoidance of dispositions of property, etc., after commencement of winding up

In a winding up by the court, any disposition of the property of the company, including actionable claims, and any transfer of shares, or alteration in the status of the members of the company, made after the commencement of the winding up, shall, unless the court otherwise orders, be void.

160.
According to the Respondent, this provision prohibits the transfer of assets and interests, including actionable claims, of a company undergoing winding up proceedings. Any such transfer is null and void if performed without the leave of the High Court of Tanzania.
161.
The Respondent argues that since IPTL was in winding up proceedings at the time of the purported acquisition of the loan by the Claimant from Danaharta, and the permission of the High Court of Tanzania was not sought regarding this acquisition, the transfer is null and void. The High Court has continuous supervisory powers once a winding up petition has been commenced, and permission for any disposition must be obtained while the winding up proceedings are ongoing, and not merely after the court has declared the company wound up. The Respondent submits that this interpretation of Section 172 was also put forward by Martha Renju in proceedings in the British Virgin Islands in 2010. Further, it asserts that Danaharta and the Claimant were warned that the transfer of the loan to SCB HK in 2005 could be invalidated by Section 172 but chose to ignore such advice.237
162.
The Respondent also contends that the transfer of the loan was an "actionable claim" covered by Section 172, as it comprised a right to bring a claim as security for a loan granted in favour of a company. It further takes the view that the validity of the transfer of the loan is not a question to be governed by English law (the law applicable to the Facility Agreement). As the "transfer took effect in Tanzania with respect to security for a loan granted in favour of a Tanzanian company which was undergoing winding up proceedings in Tanzania, permission from the High Court of Tanzania overseeing those winding up proceedings was a necessary requisite."238
163.
The Claimant argues that IPTL was not in winding up within the meaning of Section 172 read with Section 174 of the Companies Ordinance 1921 (Tanzania) when the Term Loans were transferred from Danaharta to the Claimant in 2005. Section 174 governs the time of commencement of the winding up order, and states as follows:

174. Commencement of winding up by the court

(1) Where before the presentation of a petition for the winding up of a company by the court a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution, and unless the court, on proof of fraud or mistake, thinks fit otherwise to direct, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.

(2) In any other case, the winding up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up.

164.
The Claimant contends that, according to commentary on equivalent provisions of English insolvency legislation, this provision operates retrospectively to invalidate property dispositions made after the winding up petition is presented in the event a winding up order is made.239 Where no such order has been made, property dispositions are not invalidated. In the present case, according to the Claimant, as the Tanzanian Court of Appeal ultimately quashed the Winding Up Order, the transfer from Danaharta to the Claimant was not invalidated. The Claimant points out that this was also the conclusion reached by Flaux J.240 Further, it submits that to the extent that Martha Renju took the position stated by the Respondent, that was incorrect, and in any event, not dispositive of the claim before the BVI Court. Further, the Claimant disagrees that any such warning of the invalidity of the loan as asserted by the Respondent was in fact given.241
165.
The Claimant also notes that, from a policy perspective, a provision which invalidated dispositions made where no winding up order is ultimately made would be pointless as there would be no need to preserve assets for a pari passu distribution to creditor. Such a provision would be unjust as companies presented with a winding up petition (however groundless) would be effectively paralysed by the threat of having perfectly legitimate transactions invalidated, even if the winding up petition is later dismissed or withdrawn.242
166.
In the Claimant’s view, the transfer of the loan from Danaharta to SCB HK in 2005 was the transfer of a liability of IPTL, not the transfer of property of IPTL. The transfer thus fell outside the prohibition on dispositions under Section 172. This it submits was the conclusion reached in the PwC Report and by Flaux J. Further the Claimant asserts that to the extent that the Respondent is implying that "actionable claims" include the Claimant’s right to bring a claim in its capacity as Security Agent as the assignee of the legal benefit of the Implementation Agreement, this is not relevant as the disposition by IPTL of the legal benefit of the Implementation Agreement to the Security Agent occurred in 1997 by way of the statutory assignment. From then onwards, the benefit of the contract was no longer part of the property of IPTL. The disposition in 1997, made some 5 years before the Winding Up Petition was filed in 2002, was not a disposition made during the winding up of IPTL.243
167.
In any event, the Claimant contends that Section 172 of the Companies Ordinance 1921 (Tanzania) cannot invalidate the transfer of the loan from Danaharta to SCB HK because the validity of the transfer is not governed by Tanzanian law. It argues that the Facility Agreement is governed by English law, and the validity of the transfer is thus also governed by English law. It also states that pursuant to the non-exclusive jurisdiction clause in the Facility Agreement, Flaux J determined that the transfer of the loan is governed by English law, which recognised the transfer as valid.244
168.
Finally, the Claimant notes the irony in the Respondent’s purportedly improper recognition of the alleged sale of the Mechmar Shares to PAP when, on its own case, Section 172 would have invalidated the transfer. The VIP-PAP SPA alleged that PAP had purchased the Mechmar Shares from Piper Link in 2011,245 and the SPA was countersigned by Mr Saliboko in his capacity as Second Provisional Liquidator of IPTL. Section 172 expressly applies to "any transfer of shares", and the purported transfer allegedly took place after the Winding Up Petition was filed in 2002 but before the Winding Up Order was quashed in 2012 (or withdrawn in 2013). Mr Saliboko recognised the purported transfer of the Mechmar Shares, but refused to recognise the transfer of the loan, even though both would have been invalid according to the Respondent’s interpretation of Section 172. The Claimant alleges that the contradictory position taken by Mr Saliboko and the Respondent "highlights the cynicism and expediency of their stance on the issue. "246

(ii) Tribunal's Analysis

169.
It is not in dispute between the Parties that a Winding Up Petition was filed against IPTL in February 2002. The Winding Up Order was made against IPTL on 15 July 2011 by the Tanzanian High Court (Kaijage J).247 That order for winding-up was, however, set aside by the Court of Appeal on 17 December 20 1 2248 and finally withdrawn by the petitioner VIP on 26 August 20 1 3.249 It is the Respondent’s case that the transfer from Danaharta to SCB HK took place in 2005 after the commencement of the winding up proceedings and during such proceedings and as such is rendered null and void under Section 172 of the Companies Ordinance 1921 (Tanzania), as it was made without the permission of the Tanzanian High Court. In its view, it matters not that the Winding Up Order was eventually set aside or that the Winding Up Petition was withdrawn, as Section 172 of the Companies Ordinance 1921 (Tanzania) prohibits any disposition immediately following the commencement of winding-up proceedings with no express exceptions save for dispositions made with leave of court.
170.
The Tribunal accepts that the scheme contemplated under the winding up provisions of the Companies Ordinance 1921 (Tanzania) is that when a winding up order is made it enjoys efficacy to avoid dispositions made after the commencement of the winding-up proceedings. The intent of the scheme is to avoid the preferential treatment of certain creditors. But when no winding up order is made and the petition is eventually withdrawn, dispositions are not rendered void because there remain no proceedings in place that have that effect and any permission that was needed from the Court is no longer required. Similarly, if an order is made but subsequently set aside then dispositions made even during the period of the winding-up would not be rendered void because upon the setting aside of the order, there is no legal entailment that remains giving rise to the disposition being void.
171.
In any event, the Tribunal also does not accept that the loans constituted under the Facility Agreement are "the property of the company". Far from being an asset, they constitute liabilities of IPTL and would not in the least impact other creditors. The loan remains a liability of the company and could not become a "right to bring a claim as security for a loan granted in favour of a company". Such a right is embodied in the Implementation Agreement and could be the basis of an "actionable claim" but that had already been assigned absolutely, to the lenders/banks in 1997, much before the Winding Up Petition was filed.

(3) Tribunal's Finding on the Claimant's Status as Legal Assignee

172.
The terms of the Implementation Agreement permit IPTL to "assign or create a security interest" in favour of its "Lenders" subject only to IPTL having obtained "prior written consent" from GoT. Although no "prior" written consent was given, the consent was subsequently given on 3 October 1997 and acknowledged by the signature of its Ministry of Water, Energy and Minerals on the Notice of Assignment of the Implementation Agreement,250 and by the letter from its Minister of Finance of 13 October 1997 addressed to IPTL, which was copied to the Prime Minister, Minister of Energy and Minerals, Minister-Planning, Attorney-General, Chief Secretary, and MD TANESCO confirming its agreement to "the execution of the assignments of the Implementation Agreement [...] ".251 The Tribunal therefore finds that consent was given and the requirement for "prior" consent was accordingly waived.
173.
The Tribunal also holds that the requirement for consent from GoT for the original banks to assign their interest in the Implementation Agreement is not required under Article 15.2 of the Implementation Agreement as any subsequent assignment by the banks would be an assignment by the banks qua the lender and not as a "permitted assignee" of the Company.
174.
The Tribunal is satisfied that while Clause 3.1 of the Security Deed creates "charges", Clause 3.2 thereof assigns to the Security Agent for the benefit of the Secured Creditors without any condition or qualification of "all its present and future right, title and interest in and to the Assigned Contracts" (which definition includes the Implementation Agreement). The assignment is an absolute one not an assignment by way of charge only. The notice of such assignment in relation to the Implementation Agreement was given by the Security Agent on behalf of the lenders and acknowledged by GoT. GoT was also notified by the Claimant as successor lender of its interest at the very latest in December 2009 and could not therefore claim that it was unaware of the Claimant’s claims as under the Implementation Agreement. Any change in the Security Agent has no impact upon the right of SCB HK as the assignee as Lender under the Facility Agreement and the assignee of the rights under the Implementation Agreement.
175.
The assignment is an absolute one and not merely a charge as such it falls outside the requirement for registration under the Section 79(2) of the Companies Ordinance 1921 (Tanzania). As the Winding Up Order made by Kaijage J was subsequently set aside by the Court of Appeal and then eventually withdrawn, the rights of SCB HK under the Implementation Agreement could not be affected and remain actionable. All said, the Tribunal finds that the Claimant (SCB HK) has all the rights under the Implementation Agreement assigned to it by Danaharta (as the successor in title of the Lenders) and accordingly has the title and interest to pursue its claims against GoT for any breach of the Implementation Agreement in its own name.

B. Jurisdiction Under Article 25 of the ICSID Convention

176.
The Respondent contends that the Tribunal lacks jurisdiction under Article 25 of the ICSID Convention on two grounds: (1) the Claimant is not a "National of another Contracting State"; and (2) the Claimant does not have an "investment."

(1) National of Another Contracting State

a. Parties' Submissions

177.
The Respondent’s response in relation to the Claimant’s assertion that the Claimant’s nationality should be considered for the purpose of "diversity of nationalities" under Article 25 of the ICSID Convention, is that it did not consent to the assignment of IPTL’s rights under the Implementation Agreement and so the Claimant is not in fact the statutory assignee of IPTL pursuant to the Implementation Agreement. Accordingly, it follows then that the Claimant has no right to bring this arbitration in its own name. According to the Respondent, in any case, the Implementation Agreement does not permit lenders to bring an arbitration, and the only nationality that should be considered would be as provided under Article 21.2 of the Implementation Agreement is IPTL’s nationality.252
178.
The Respondent further contends that under Article 21.2 of the Implementation Agreement (i.e. the arbitration clause), the Parties agreed that IPTL would be treated as a foreign entity as long as a foreign investor holds at least 35% of its voting stock. In its view, the question of nationality which must be assessed at the "time of expressing consent to arbitration (i.e. when signing the Implementation Agreement)" as well as when the request for arbitration was made in the case.253 It also asserts that as IPTL is now fully owned and controlled by a Tanzanian entity, namely PAP,254 ICSID’s jurisdiction under Article 25 of the ICSID Convention could not be invoked as IPTL, as a Tanzanian national, is not "a national of another contracting State."255
179.
The Claimant says that it is an entity incorporated in Hong Kong and thus is a national of the People’s Republic of China (a contracting State to the ICSID Convention). Further, it also argues as the Claimant is bringing this claim as the assignee of IPTL’s rights under the Implementation Agreement, it is the Claimant’s nationality, and not IPTL’s nationality, that is relevant.256
180.
The Claimant submits that "foreign control" under Article 25(2)(b) of the ICSID Convention is an "objective condition" and "must be viewed on its own particular context, on the basis of all of the facts and circumstances."257 The Claimant adds that in any case, even though IPTL is a Tanzanian corporation, it would still fulfil this requirement because Article 25(2)(b) of the ICSID Convention extends the meaning of "National of another Contracting State" to include "[...] any juridical person which had the nationality of the Contracting State party to the dispute...on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention." The Claimant submits that pursuant to Article 21.1 of the Implementation Agreement the parties to the Implementation Agreement made such an agreement wherein it was set out that "[f]or purposes of consenting to the jurisdiction of the Convention, the Parties agree that the Company is a foreign controlled entity unless the amount of the voting stock in the Company held by Foreign Investors should decrease to less than thirty-five (35) percent of the outstanding voting stock of the Company. "258
181.
The Claimant also points out that, Mechmar, a Malaysian entity, owns 70% of the shares in IPTL. It is the Claimant’s position that the transfer of the affairs of IPTL and the sums in the Escrow Account to PAP on the basis that PAP had purchased the Mechmar Shares was illegal and fraudulent. Any assertion by the Respondent that PAP has any valid interest in IPTL would be extraordinary as it would permit the Respondent to rely on its own wrongdoing.259 In response, the Respondent says that PAP was recognised as IPTL’s sole shareholder as per Utamwa J’s Order which took "judicial notice" of the VIP-PAP- SPA and transferred all affairs of IPTL to PAP. If the Tribunal accepts the Respondent’s argument that Utama J’s Order is effective, then IPTL would be under complete Tanzanian control for reasons that cannot be attributed to the Respondent and the Tribunal would then not have jurisdiction to assess the Claimant’s claims against it for the alleged violations, including the release of the Escrow Account.260

b. Tribunal's Analysis

182.
The Tribunal has discussed in paragraphs 172 to 175 above and reached the finding that the Claimant is the legal assignee of the Implementation Agreement. It follows that the Claimant is entitled to enforce the rights thereunder in its own name. Being a Chinese entity, it is indisputably a "National of another Contracting State."
183.
In any event, as could be seen from the discussion in paragraphs 349 to 353 below, the Tribunal has found that the Order of Utamwa J of 5 September 2013 directing that control of IPTL, including the IPTL Power Plant, be handed to PAP had been made in curious circumstances, with no regard to the registered shareholder Mechmar or the consequences of permitting PAP to have control of the disposition of the Escrow Account.
184.
The Tribunal finds that the Claimant satisfies the requirement of a "National of another Contracting State", namely China.

(2) Whether the Dispute Arises out of an "Investment" within the Meaning of Article 25(1) of the ICSID Convention

a. Applicable Test for Determining the Meaning of Investment

(i) Parties' Submissions

185.
The Respondent’s case is that the Claimant does not have a qualifying "investment" within the objective meaning of investment for the purposes of Article 25(1) of the ICSID Convention. According to the Respondent, the Claimant merely purports to have acquired accounts receivables after the Facility was contracted for and built. The acquisition of the loan did not involve any expectation of receiving an economic return beyond the mere repayment of the loan with interest. The Respondent characterises the Claimant as a "speculative debt-hunter" and argues that speculative activities ought not to fall within the jurisdiction of an ICSID tribunal.261 In the Respondent’s view, the nature of the dispute does not arise "directly out of an investment."
186.
The Respondent refers to the "Salini test" or "Salini criteria" (as set out in Salini v Morocco)262 to suggest that there are essential characteristics for the notion of an "investment" under Article 25 of the ICSID Convention that all must be met to establish jurisdiction, which include "(1) the investor's participation in the risks of the transaction; (2) a substantial contribution by the investor; (3) a certain minimum duration; and (4) a signification contribution to the host State's economic development."263 The Respondent argues that these conditions are not fulfilled in the present case and the purported acquisition of Term Loans 1 and 2 in 2005 does not constitute investment as per the objective criteria, and therefore there is no investment within the meaning of Article 25(1) of the ICSID Convention.264
187.
The Respondent also refers inter alia to the decision on jurisdiction in Consortium R.F.C.C. v Royaume du Maroc265 to support its argument that the Parties cannot substitute the objective requirements of an investment under Article 25(1) of the ICSID Convention.266 The Respondent also refers to the Report of the Executive Directors on the ICSID Convention, which it submits indicates that the Parties’ consent alone is not sufficient to establish jurisdiction under the ICSID Convention.267
188.
The Claimant’s position is that the Salini Test has no basis in the actual text of Article 25(1) of the ICSID Convention. The Salini Test cannot override party agreement for defining what constitutes an investment, even though it may be used to define the "outer limits" of what an investment means under Article 25(1) of the ICSID Convention. It submits that the principal legal framework to determine the existence of an investment should be the will of the Parties as set forth in the bilateral investment treaty or investment contract. It refers to the decision of Pantechniki S.A. Contractors & Engineers v Republic of Albania,268 to support its argument that the Respondent’s approach based on the Salini Test can increase the risk of arbitrary and subjective value judgments by a Tribunal.269 The Claimant asserts that, at its highest, the Salini Test is an exemplary list of the typical features of an investment and not a mandatory checklist. The Claimant contends that several ICSID tribunals had refused to apply the Salini Test or have applied it in modified forms.270
189.
The Claimant argues that the loan constitutes an investment pursuant to Article 25 of the ICSID Convention. Moreover, in the absence of a definition of "investment" in Article 25(1) of the ICSID Convention, the tribunals in the cases Fedax N.V. v Republic of Venezuela271("Feda"x) and Ceskoslovenska Obchodni Banka, A.S. v Slovak Republic272 ("CSOB") and Alpha Projektholding GMBH v Ukraine273 referred to the Parties’ definition of investment in the relevant "consent-giving" instrument (the bilateral investment treaty), which it submits is the proper test. The Claimant also rejected the Respondent characterising it as a "debt-hunter" by stating that this allegation goes to admissibility and is irrelevant to the jurisdictional issue of what constitutes an investment.274
190.
According to the Claimant, the scope of its "investment" for purposes of ICSID Convention Article 25 could be made out from analysing the terms of the Implementation Agreement showing that the Project, the financing of the Project and related security granted in relation to it, form part of the overall investment.275
191.
Additionally, the Claimant contends that the Parties included an ICSID arbitration clause in the agreement with the clear expectation that disputes under the Implementation Agreement would relate to a qualifying "investment" under the ICSID Convention. The Claimant points out that the Parties to the Implementation Agreement anticipated that the successors and assigns of the original lenders could become parties to the Implementation Agreement, including the ICSID arbitration clause.276

(ii) Tribunal's Analysis

192.
The Claimant has submitted that the Tribunal should apply a "subjective" test to consider if the Parties had under the terms of the Implementation Agreement accepted that the subject matter is an "investment", whereas the Respondent submits that the Tribunal must also apply an "objective" test to ascertain if the elements of an investment exist in order to establish jurisdiction under Article 25 of the ICSID Convention.
193.
On the subjective test, the Claimant relies on the Respondent’s expressed consent in the Implementation Agreement to submit any dispute to ICSID277 under the ICSID Rules. Such a position is supported by several arbitral tribunals, which took the view that the consent of the State party as to what constitutes an investment is of primary importance. The tribunal in CSOB278 put it succinctly:

66[...] an important element in determining whether a dispute qualifies as an investment under the Convention in any given case is the specific consent given by the Parties. The Parties' acceptance of the Centre's jurisdiction with respect to the rights and obligations arising out of their agreement therefore creates a strong presumption that they considered their transaction to be an investment within the meaning of the ICSID Convention.

67. The Tribunal must accordingly attach considerable significance to the reference made in Article 7 of the Consolidation Agreement to the BIT and thus to the ICSID arbitration clause contained therein (Article 8). The Parties' acceptance of the relevance and applicability of the BIT to the Consolidation Agreement expresses their view that the latter transaction relates to an investment within the meaning of the BIT. The contrary conclusion would deprive the reference to the BIT in Article 7 of the Consolidation Agreement of its meaning or effet utile.

194.
The Tribunal notes, however, that the Parties’ consent as reflected in the contract, while of great importance, could not be the only test and is not conclusive in resolving the issue of whether there is jurisdiction under Article 25 of the ICSID Convention. The subject matter of the dispute must nevertheless still be an investment as contemplated by the ICSID Convention and consent by the Parties alone could not subject an ordinary commercial transaction or political dispute or non-legal dispute to ICSID for resolution. This is expressed in the Report by the Executive Directors on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States279 -

25. While consent of the parties is an essential prerequisite for the jurisdiction of the Centre, consent alone will not suffice to bring a dispute within its jurisdiction. In keeping with the purpose of the Convention, the jurisdiction of the Centre is further limited by reference to the nature of the dispute and the parties thereto.

195.
The Tribunal therefore accepts that for this aspect of jurisdictional competence two requirements must be met. First, that the subject matter of the dispute constitutes an investment within the meaning of Article 25 of the ICSID Convention. Second, that the Parties consented to such a dispute being submitted to ICSID and its Arbitration Rules.
196.
With regard to the second part of the test, the Tribunal has little doubt that the parties to the Implementation Agreement had considered that the activity it was related to (being the construction and financing of the Facility) was an "investment" at the time it was entered into as they had expressly agreed to have all disputes arising thereunder to be submitted to ICSID and under the ICSID Arbitration Rules. The Tribunal is of the view that the second part of the test is satisfied.
197.
The first part of the test requires a consideration of the elements that constitute an activity as an "investment" within the meaning of Article 25 of the ICSID Convention.

b. Elements of an "Investment" under Article 25 of the ICSID Convention

(i) Salini Test

198.
The Tribunal notes that the Salini Test has indeed received a mixed following. For example, it was followed in Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v Islamic Republic of Pakistan;280Jan de Nul N.V. and Dredging International N.V. v Arab Republic of Egypt;281 and Ioannis Kardassopoulos v Republic of Georgia.282
199.
The following tribunals have taken a different approach:

- In Abaclat and others v Argentina, the tribunal declined to follow the Salini Test and suggested that it should "[...] not serve to create a limit, which the Convention itself nor the Contracting Parties to a specific BIT intended to create. "283

- In Biwater Gauff v Tanzania, the tribunal remarked that "These criteria are not fixed or mandatory as a matter of law. They do not appear in the ICSID Convention [...] it is doubtful that arbitral tribunals sitting in individual cases should impose one such definition [...]."284

- In Philip Morris Brand Sàrl and others v Oriental Republic of Uruguay, the tribunal said, "These criteria should not play a role in the Tribunal's analysis of whether an investment exists, much less to serve as a jurisdictional requirement. "285

- In MNSS B.V. and Recupero Credito Acciaio N.V. v Montenegro ("MNSS B.V. v Montenegro"), the tribunal more generously suggested that the "[...] elements of the Salini test need to be considered flexibly and as a whole in the context of the specific facts of an investment operation."286

200.
The Tribunal agrees with the observations of the recent ICSID decisions, that the Salini Test is a reformulation of the criteria set out by the tribunals in Fedax287 and CSOB,288 with the additional requirement that there should be some economic contribution to the host country. These Salini factors are not to be taken as prescriptive or dispositive but merely as indicative of typical elements that the Tribunal could consider in determining whether the subject matter from which the dispute has arisen is an "investment" contemplated by the ICSID Convention. This flexible approach is consistent with the objective of ICSID Convention as set out in the Executive Director’s Report -

Nature of Dispute

26. Article 25(1) requires that the dispute must be a "legal dispute arising directly out of an investment." The expression "legal dispute" has been used to make clear that while conflicts of rights are within the jurisdiction of the Centre, mere conflicts of interests are not. The dispute must concern the existence or scope of a legal right or obligation, or the nature or extent of the reparation to be made for breach of a legal obligation.

27. No attempt was made to define the term "investment" given the essential requirement of consent by the parties, and the mechanism through which Contracting States can make known in advance, if they so desire, the classes of disputes which th ey would or would not consider submitting to the Centre (Article 25(4)).289

201.
It is the Respondent’s case that the Claimant had not made an investment as contemplated by Article 25 of the ICSID Convention, alleging that: the Claimant assumed no operational risk, was involved in a transitory manner, did not make a substantial contribution and its involvement did not contribute to the economic development of Tanzania. In the Respondent’s view, the Claimant’s only link to the Facility was its acquisition of a "purported claim to accounts receivable" long after the Facility was financed and built.290
202.
Before any discussion of whether these elements have been satisfied, it is necessary to recall the nature of the transaction and the dispute that had arisen.

a.Nature of the Transaction

(i)Parties' Submissions

203.
The Claimant contends that the Article 25(1) ICSID Convention "investment" requirement is met by the following elements:

i. IPTL’s investment in the Facility;

ii. the Claimant’s loan to IPTL to finance the construction of the Facility;

iii. IPTL’s shares, over which the Claimant has exercised its right under the Charge of Shares to appoint a receiver; and

iv. the contractual rights under the Implementation Agreement, the PPA and other agreements assigned by IPTL to its lenders as security for the loan.291

204.
The Claimant submits that it is widely accepted that a loan will constitute an investment when it contributes or is closely related to an economic venture comprising an investment and relies on several cases to support this proposition, including Fedax N.V. v Republic of Venezuela,292 Ceskoslovenska Obchodni Banka, A.S. v Slovak Republic,293 MNSS B.V. v Montenegro294 and Alpha Projektholding GMBH v Ukraine.295 Further, the Claimant asserts that in the present case, the loan was essential to the construction of the Facility, as without the loan, the Facility would not have been built and the Facility was itself a significant project intended by the Respondent to develop Tanzania’s infrastructure.296
205.
The Claimant also points out that the Respondent admitted in its Memorial in the "BIT Arbitration" proceedings (viz. Standard Chartered Bank v United Republic of Tanzania, ICSID Case No. ARB/10/12) that the original loan was an investment in Tanzania for the purposes of Article 25(1) of the ICSID Convention. Further it submits that the PPA Tribunal also dealt with the same issue and decided that it was satisfied that there was an investment by virtue of the Claimant’s purchase of the debt under the loans to IPTL and assigning of the rights under the relevant agreements.297
206.
The Claimant submits that the fact that the loan was transferred does not change its nature as an investment in the hands of the new lender and relies on various legal authorities including Feda x v V enezuela,298MNSS v Montenegro299 and Abaclat v Argentina300 to support this contention.301
207.
In its Reply, the Claimant refers to the decision in African Holding v DRC302 to say that an assignment does not change the nature of the original investment and that once an investment has been acquired there is no further investment needed to be made to retain its nature. The Claimant submits that the assignment of a loan is an assignment of economic value of the work done and not paid, and the status of a loan as an investment is constant.303 It disagrees with the Respondent’s suggestion that a mere transfer of a lender would deprive it of its status as an investment, despite the expressed provision in the Implementation Agreement recognising such transfer or assignment.304
208.
The Respondent counters that the essence of the Claimant’s claim is a claim for the repayment of the debt owed by IPTL, which the Claimant has dressed up as a frivolous discrimination and expropriation claim under the Implementation Agreement. Such a claim does not arise out of the Facility as investment because ultimately it is based on the Loan Facility Agreement between IPTL and the consortium of Malaysian banks which was acquired by the Claimant. Thus, it submits that the link to the Facility is too remote and irrelevant and could not clothe the Claimant as having been exposed to the risks attendant to the Facility.305
209.
Further, the Respondent submits that the form and nature of the Claimant’s activity does not constitute an investment under Article 25(1) of the ICSID Convention. The Respondent contends that, in a memorandum of July 19 9 6,306 Mr Patrick Rutabanzibwa (as Commissioner for Energy and Petroleum Affairs) wrote that the Facility itself did not contribute to the economic development of Tanzania and it also argues that what was needed in Tanzania at the time the Facility was contracted for, financed and built, was an emergency power project and not an onerous medium-term project.307
210.
The Respondent argues that: first, the cases referred to by the Claimant in paragraph 204 above are not related to Article 25(1) ICSID Convention, but to the definition of "investment" in the relevant bilateral investment treaty applicable in each case; and second, that the cases relied upon by the Claimant recognize that a loan in itself is not an investment under the ICSID Convention if it is not linked to a process of value creation, or if it does not contribute substantially to the development of the host State. According to the Respondent, the Claimant’s purported acquisition of Term Loans 1 and 2 is not a loan that would constitute an "investment ", because it is not linked to a process of value creation as it is purely a commercial operation not different to those made by financial institutions.308
211.
The Respondent says that any alleged admission or statement that was made in the BIT Arbitration was in the context of analysis concerning the bilateral investment treaty between Tanzania and the United Kingdom, and therefore it is not relevant to the present case.309 Further, the Respondent submits that the PPA Tribunal did not engage in analysis of the specific characteristics of an investment and therefore is not useful for the present case.310
212.
The Respondent contends that all the cases cited by the Claimant are inapposite to the facts of the present case.311 Further the Respondent asserts that the Claimant relies upon the expansive definitions of investment following the approach of Fedax v Venezuela, which has since been criticised by other tribunals and commentators.312

(ii)Tribunal's Analysis

213.
As a starting point, the Tribunal takes the view that the construction and operation of an infrastructure project,313 such as the Facility in Tanzania, is an investment, notwithstanding that a senior member of the Tanzanian Government thought at one stage that the Facility did not contribute to the economic development of Tanzania. The provision of electricity from the Facility in the face of power shortages qualifies as an investment. Whether, in hindsight, that investment was optimal or could have been structured differently cannot alter its qualification as an investment.
214.
The main thrust of the Respondent’s arguments lies on the fact that:

i. the Claimant was not the original Lender under the Financing Documents and the Implementation Agreement;

ii. the purchase of the Loan by the Claimant was not an investment; and therefore

iii. the assignment of any security created, including the rights under the Implementation Agreement could not be pursued by an ICSID arbitration.

215.
The most critical issue that requires consideration is whether the purchase of the Loan by the Claimant in the circumstances of the case is in the nature of an "investment." This then requires an examination of whether there exists in this transaction, the various elements of risk, substantial contribution, minimum duration and arguably, economic development of Tanzania.

b.Risk

(i)Parties' Submissions

216.
The Respondent suggests that the Claimant had assumed no "operational risk"314 for when they took over the Loans, the Facility was already constructed and operating. In the Respondent’s view, any risks attendant on the Loans were borne by the original lenders, as they were then exposed to the uncertainty as to whether the Facility would be completed before any income stream could flow. What the Claimant had assumed, according to the Respondent, was merely a "commercial risk" which exists in any transaction, and which in this case would be further ameliorated by the security which it enjoyed over the Facility and revenues of IPTL, giving the Claimant an ascertainable return. In its view, the Claimant’s best outcome in taking over the loan "did not go beyond the prospect of receiving an economic return through the repayment of the money loaned with interest"315 and was nothing more than an exchange, with no value creation for the Facility.316
217.
The Claimant, on the other hand, argues that under the PPA, TANESCO agreed to pay IPTL the tariff stipulated in the PPA. It was envisaged that the loan would be repaid from the cash flows generated by IPTL under the PPA. The economic success of the Project was dependent upon IPTL receiving regular payments from TANESCO, and the support and non-interference of the Respondent. The Claimant therefore assumed not just the risk of non-payment of the debt, but also the risk of the success or failure of the Facility.317

(ii)Tribunal's Analysis

218.
The concept of "commercial risk" has been distinguished from "investment risk" by the tribunal in Romak v Uzbekistan318 in the following way -

229. All economic activity entails a certain degree of risk. As such, all contracts - including contracts that do not constitute an investment -carry the risk of non-performance. However, this kind of risk is pure commercial, counterparty risk, or, otherwise stated, the risk of doing business generally. It is therefore not an element that is useful for the purpose of distinguishing between an investment and a commercial transaction.

230. An "investment risk" entails a different kind of alea, a situation in which the investor cannot be sure of a return on his investment, and may not know the amount he will end up spending, even if all relevant counterparties discharge their contractual obligations. Where there is "risk" of this so rt, the investor simply cannot predict the outcome of the transaction.

219.
These remarks were adopted by an ICSID tribunal in Poštová Banka v Greece319 which re-stated the term "investment risk" as "operational risk" and added that such is "not a commercial risk or a sovereign risk"320 and expressed the view that its distinction is that an "operational risk" means that "profits are not ascertained but depend on the success or failure of the economic venture concerned [...]. "321 In that case, the tribunal had found that the "Greek Government Bonds" were issued for economically unproductive activity viz. for financing government operations, to meet general budgetary purposes and repaying government debts and no "operational risk" was present.
220.
The Tribunal accepts that loans and financial instruments standing alone without any link to some economic venture intended to provide for the improvement of the State’s development would not be considered an "investment." It follows that an assignment of loans merely as an income stream unconnected to any investment is not an "investment" in international investment law.322
221.
Arbitral tribunals have on several occasions held that loans and financial facilities (whether in the form of direct loans, bonds or notes) issued by or undertaken in the context of financing an investment would qualify as investments under Article 25 of the ICSID Convention.323
222.
There is no doubt in the Tribunal’s mind that there were clearly investment risks when the original Lenders extended the Loan to IPTL to finance the construction and operation of the Facility and that they had accepted those risks. What the Respondent contends is that the Claimant not being the original Lender, is not in a position to say that it carried any risk akin to that of the original Lenders.
223.
On first principles, the Respondent’s suggestion ignores the fact that the Claimant has staked its claim as the assignee of the Loan and the lawful assignee under the Implementation Agreement (which the Tribunal has found in its favour - see paragraph 172 above). As assignee, the Claimant stepped into the shoes of the original Lenders. And as assignee the Claimant became entitled to the rights of the original lenders, it also assumed the risks of the original Lenders. Much like the assignment of the loan in MNSS B.V. v Montenegro,324 the assignment of the loan changed the creditor under the Loan Agreement and the beneficiary under the Implementation Agreement but not the nature of the transaction. The substance of the Facility remains the same. The link between the Loan and the Implementation Agreement to the Facility and its continuing operations has not been broken. The risks undertaken by the original Lenders are now borne by the Claimant because the original Lender could not or would not be in a position to do so. Although the construction of the Facility was completed, the Claimant carries the continuing risks of the operation. There was no certainty that the Facility would run smoothly, or that the power generated would yield the projected revenue that could repay the outstanding loans. The risk of TANESCO not paying the tariffs and IPTL not being able to make the Power Plant available; and the political risk of interference by the Respondent with the Project, are not "ordinary commercial risk." These risks subsequent to the assignment were clearly borne by the Claimant.
224.
The Tribunal recognises that it is possible that the right of investment protection could be abused by a speculative debt hunter. An illustration of such an abuse can be seen in Phoenix Action Ltd v Czech Republic325 where the claimant purchased two insolvent companies that were embroiled in litigation not for any economic activity but for the sole purpose of bringing international litigation against the Czech Republic. The tribunal rightly declined jurisdiction as it found that "the whole 'investment' was an artificial transaction to gain access to ICSID."326
225.
The Tribunal does not accept the Respondent’s characterisation of the Claimant. The Claimant acquired the Loans from the original Malaysian banks following a re-structuring initiated by the Malaysian banking authority. The Claimant was the sole bidder willing to take over the Term Loan 1 (USD 92,547 million)327 and Term Loan 2 (8,236 million)328 and paid USD 76.1 million329 on terms that it provided no recourse against the original Lender or the vendor. The fact that the Claimant had paid less than the principal outstanding due is in itself no basis to suggest that it was a "no risk" venture. The original loans were in fact re-structured in the hands of Danaharta to give the borrower more time to make repayment and a forgiving of part of the accrued interest, as well enabling the repayment of the outstanding due by IPTL to the Engineering Procurement and Construction ("EPC") contractor, Wartsila NSD Nederland B.V.330
226.
The Respondent’s suggestion that the Claimant’s expectation of receiving an economic return through the repayment of the money loaned with interest is indicative that it is a normal commercial transaction with usual commercial risks and nothing more, fails to account for the risks assumed in granting, maintaining and restructuring the loans in relation to the establishment and maintenance of the Facility.
227.
The fact that the sale assets were described by the purchaser as "distressed" in fact indicates that the Claimant would be exposed to a higher risk than the original Lender. With no recourse to the original Lender,331 the Claimant assumed all the attendant risks and obligations from the original Lender associated with the Facility as spelt out in the Sale and Purchase Agreement thus:

5. Assumption of Obligations

To the extent that the Vendor shall have obligations remaining to be performed under the Asset Documentation after the Closing Date as disclosed in writing by the Vendor or as contained and disclosed in the Accounts Information relating to the Sale Asset and/or to the extent there are any claims against and/or liabilities on the part of the Vendor in respect of or in connection with the Sale Assets on or after the Closing Date, the Purchaser hereby agrees to perform all such obligations and will indemnify the Vendor and each of their officers, directors, employees and advisors ("a Vendor Party") and hold each of them harmless from and against any liability to or claim of liability by any third part y o n account of the failure of such obligations to be performed.332

228.
Unlike the claimant in Phoenix Action Ltd v Czech Republic, who did nothing other than initiate ICSID arbitration shortly after it made the "investment", the Claimant here was obliged and was fully engaged in undertaking the obligations as the Lender to IPTL by honouring its obligations to IPTL and the Facility. IPTL continued to make principal and interest repayments until April 2007 when it went into default.333 During that same period, GoT engaged the Claimant through its Tanzanian branch officers for the possibility of GoT taking over the loans from the Claimant334 and a "pretrade agreement" was said to have been signed off with GoT.335
229.
In doing so, the Claimant carried the burden of the original Lender and it would be incorrect to term it as speculative debt. The original loans were required to build and maintain the Facility. The Facility provided a necessary public good. These loans entailed risk. That risk was borne by the original Lender and assumed by the Claimant. That suffices to establish that the Claimant’s acquisition of the loans qualifies as an investment.
230.
The Tribunal is therefore satisfied that the Claimant was fully exposed to the investment risk inherent in this transaction.

c.Substantial Contribution

231.
The Respondent says that there is no substantial contribution element as that requires contribution of technical know-how, equipment and services, which are absent in the present case.336
233.
The report recommended that GoT support SCB's bid to take over the Loan -

19. Standard Bank has suggested that the Government allows the re-financing of IPTL's debt to proceed as a first step. After a few years, when (i) TANESCO's ability to pay both IPTL and Songas has been demonstrated and (ii) the IPTL shareholders' respective rights have been confirmed by the courts, perceived risks about IPTL will diminish and it may be possible to do another re-financing as a second step which would result in a more significant reduction in the capacity charge. It is evident that the perceived risks currently surrounding IPTL are a hindrance to negotiating a meaningful reduction in the capacity charge.

[...]

26. [...] (ii) The Ministry should respond positively to Standard Bank's proposals for re-financing IPTL in two phases (as described in paragraph 19 above) but (a) seek more time to contact the Malaysian government and (b) require the re-financing arrangements to anticipate a second phase which may involve the purchase of the IPTL plant and the possible par tici pation of other financiers including the World Bank or its affiliates.338

234.
There is no doubt that GoT viewed SCB HK’s involvement as positive and necessary. There was need for more power generation. GoT wanted a reduction in the capacity charge, but at a reduced cost and IPTL was under-capitalised. GoT had hoped to take control of the Facility or for someone to take over the role of the Lenders. While it is true that the money paid by SCB HK did not go directly into the Facility, but to Danaharta, SCB HK’s involvement brought stability and enabled the Facility to continue operating. All this occurred at a time when TANESCO had disputes with IPTL, had delayed, withheld or threatened to withhold payment to IPTL, thereby triggering possible default.339 Danaharta could have recalled the loan or refused to re-structure the same. GoT saw the need for SCB HK to take over the loan to enable it to gain time to consider other possible options including funding from the World Bank to take over thereafter.
235.
Unlike the case of Phoenix Action Ltd v Czech Republic, the Claimant here had paid a discounted but nevertheless substantial sum (USD 76 million) to take over the loans from Danaharta. By doing so, IPTL did not need to seek alternative funding and could continue to operate the Facility. In the Tribunal’s view, these facts indicate that the Claimant made a substantial contribution to the Project and to the Respondent.

d.Minimum Duration

236.
The Tribunal notes that the Claimant had taken over a commitment to maintain the Loans for a period of up to 10 years. The Facility was intended to be operational for more than 20 years. Such duration is not short by any measure. The Respondent argues however that the Claimant "could have sold its debt through a financial transaction" and that the Claimant had admitted through its witness Mr Casson that it had attempted to do so, albeit unsuccessfully. The Respondent submits that the Claimant’s commitment fails the "non-transitory commitment" to the host State.
237.
The Tribunal finds such a criticism quite misplaced. The nature of the Project and the long-term financing arrangement speak for themselves. Mr Casson indeed said that he was in discussion with Mr Sethi and had signed a Memorandum of Agreement on 25 November 2011 for an exit from the loan for a discounted sum of USD 75 million (when the amount outstanding then was USD 128 million). It was however clear from his witness statement340 and oral testimony341 that Mr Casson had decided to exit when he felt frustrated by the discriminatory treatment meted out to SCB HK rather than executing what SCB HK had always planned to do so. In his report seeking approval for this arrangement, he stated:

From the negotiation with Sethi, SCB has signed a Memorandum of Agreement (MOA) on 24 November, on a non-binding basis and subject to credit approval to pencil down a proposal for a one-off payment of US$75m for the Bank to exit the loan [...]. SCB will then withdraw international arbitrations against GOT and TANESCO. The Bank has been advised the MOA has shown to GOT and the Attorney General by Sethi to request time for finalizing settlement, instead of liquidating IPTL.

[...]

Regarding to settlement risk, it is uncertain to access the availability of the escrow amount of US$85m, otherwise, how GOT secure sufficient funding for settlement. Local contacts advise T AN ESCO may inject more to top up escrow funds for a global settlement.342

238.
Quite clearly this was an attempt to resolve the disputes with the other parties globally so that the Claimant could get out of the difficulties they found themselves in over the years (from 2005 to 2011), and not an indication that the Claimant had only intended a transitory holding of the loan portfolio.
239.
The Tribunal is satisfied that the Claimant’s commitment was non-transitory.

e.Contribution to the Economic Development of Host State

240.
This factor is one of the more controversial of the elements suggested by the Salini tribunal. As expressed earlier, the Tribunal shares the view articulated by tribunals in recent cases that this element is not a strict requirement but will nevertheless consider this feature as presented by the Respondent.
241.
Contribution to the host State’s economic development is of course the desired outcome of any foreign investment and the basis for the promotion of foreign investment underlying of the ICSID Convention. As one author reasoned -

Hence, investments not devoted to productive purposes, such as those undertaken for speculative purposes and those that do not develop the productive resources of the host State without positive impact on the productivity or increase the standards of living or lab or c onditions, could be considered to be beyond the outer limits of ICSID.343

242.
The Respondent submits that what is required to be shown is not whether the Facility or the original loan that funded the facility contributed to the economic development of the host State, but rather whether the Claimant’s purported acquisition of the Term Loans 1 and 2 made such contribution and added to Tanzania’s economic development.
243.
The Respondent sets out the circumstances under which the Claimant made the acquisition from Danaharta, a Malaysian Government owned asset management company created to remove non-performing loans. It contends that the purchase provided no benefit to the Respondent State. Rather it was a simple commercial transaction with only the recovery of money in mind. The Respondent points out that there was not a single drawdown by IPTL after the Claimant became the sole lender to underscore the point that SCB HK brought with it no economic benefit to Tanzania.344
244.
The Respondent has repeatedly described the Claimant as "nothing more than a speculative and bad faith endeavour which did not contribute to the economic development of Tanzania[...]."345 It submits that had SCB HK not bought the loans from Danaharta it "would not have entailed a disruption of the Facility" as at the time of acquiring the loan the Facility "had already been financed and built and was already operating",346 it therefore reasoned that the Claimant did not "primarily and directly" contribute to the economic development of Tanzania.347 The Respondent has also pleaded that the Claimant’s acquisition of the loan outside Tanzania was evidence of the speculative nature of the Claimant’s activities.348
245.
As stated earlier, the Tribunal notes that the original loans were re-structured when IPTL had difficulty meeting repayments, due to TANESCO’s challenging the calculation of the capacity charges and in delaying or withholding making such payments to IPTL. The acquisition of the loan by SCB HK from Danaharta assured IPTL, TANESCO and GoT of the continuing availability of financial support for the operation of the Facility. The support of GoT for SCB HK’s taking over of the loans from Danaharta is in the Tribunal’s view the acceptance by GoT that SCB HK’s involvement would contribute to the economic development of Tanzania. SCB HK’s support in taking over and maintaining the availability of the loans was even more critical when GoT realized that its hope of World Bank funding was not forthcoming.
246.
The Tribunal is satisfied that far from being a speculative transaction, SCB HK stepped in when no others would. If the element of contribution to economic development is required to be shown, the Claimant has satisfied the same.

c. Alternative Arbitral Forum in the Implementation Agreement

(i) Parties' Submissions

247.
The Respondent in its Counter-Memorial adds to its challenge that the presence of the ICC arbitration clause in Article 21.2 of the Implementation Agreement reinforces the notion that the Tribunal does not have jurisdiction under the ICSID Convention in this case.349
248.
Article 21.2 of the Implementation Agreement provides after the reference to ICSID arbitration that -

... If for any reason the Dispute cannot be settled in accordance with the ICSID Rules, whether if the GOT fails to implement the Convention, or if the Company should not be agreed to be a foreign controlled entity, or if the request for arbitration proceedings is not registered by the Centre, or if the Centre fails or refuses to take jurisdiction over such Dispute, or otherwise, any Dispute shall be finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce (the "ICC Rules") by one or more arbitrators appointed in accordance with the ICC Rules.

249.
The Respondent submits that the provision of such an alternative arbitral forum was included because the Parties had doubts as to whether their transaction would qualify as an investment, especially in view of the possibility that the rights could be assigned, upon approval of the Respondent, to other entities.350 The Claimant responds that there is a hierarchy established in Article 21.2 of the Implementation Agreement between the "ICSID arbitration clause and the ICC arbitration clause" wherein the former applies to any dispute or difference between the Parties and the latter is "subsidiary" and applicable only when for any reason the Dispute cannot be settled by ICSID Rules.351

(ii) Tribunal's Analysis

250.
The Tribunal agrees that parties have made this proviso in anticipation that certain disputes may not fall within the general jurisdiction of ICSID and, if that should happen, those should then be referred to ICC arbitration. The text of the proviso sets out the various scenarios contemplated by the parties namely, viz. Tanzania fails to implement the ICSID Convention, or if IPTL is not a foreign-controlled entity, or if ICSID fails to register the dispute or a tribunal refuses to take jurisdiction. There is, however, no room to infer by reverse reasoning that the parties have by making such a proviso accepted or anticipated that an assignment of rights would trigger a reference to the alternative arbitral forum. The Tribunal’s reading is simple, the proviso is an expression of the parties’ intention to have their disputes referred to institutional arbitration and not to a national court such that if for any reason this Tribunal declined jurisdiction, the Claimant would be at liberty to seek relief from the alternative forum. The proviso in Article 21.2 of the Implementation Agreement does not therefore add support the Respondent’s argument in any manner.

(3) Tribunal's Decision on Jurisdiction under Article 25 of the ICSID Convention

251.
Following the Tribunal’s consideration of the various elements of the Claimant’s undertaking, including maintaining the loans for the benefit of IPTL and the Facility, the Tribunal finds that this is a legal dispute arising out of an investment and that it has jurisdiction under Article 25 of the ICSID Convention. Neither the Project, nor its individual elements, ceased to be an investment merely because the identity of the Lender under the Facility Agreement has changed or that no further drawdown of funds were made following the transfer. The fact is that the Facility continued to enjoy the use of the funds earlier disbursed following the change of the Lender. The Tribunal is also satisfied that the Claimant is the rightful party to maintain such claim as an absolute assignee who is entitled to enforce the rights thereunder in its own name. Being a Chinese entity, it is indisputably a "National of another Contracting State."
252.
In these circumstances, the Tribunal therefore holds that the ratione personae and ratione materiae jurisdiction elements under Article 25 of the Convention are fully satisfied.

VI. LIABILITY

A. Expropriation Claim Under Article 16 of the Implementation Agreement

253.
The Claimant’s claim for expropriation hinges on the undertaking given by GoT in Article 16 of the Implementation Agreement.
254.
Under Article 16.1 of the Implementation Agreement, GoT is expressly prohibited from certain specific actions, namely:

16.1 Assurance Against Discriminatory Action

The GOT shall not take any discriminatory action which materially and adversely affects the Project or the performance of the Company's obligations or the enjoyment of its rights or the interests of the Investors under the Security Package or expropriate or, except as hereinafter provided, acquire the Facility or the Company, whether in whole or in part. Nothing in the foregoing shall apply to any actions taken by the GOT, TANESCO, or any Governmental Authority pursuant to their respective rights and obligations arising under this Agreement, the Power Purchase Agr eement and the other documents comprising the Security Package.352

255.
Under Article 16.2 of the Implementation Agreement, GoT undertook not to expropriate or nationalise the assets of the IPTL:

16.2 Acquisition of Shares or Assets

Subject to Article 20.1, the GOT undertakes to the Company that neither it nor TANESCO or any Governmental Authority will expropriate, compulsorily acquire, nationalise, or otherwise compul sor ily procure any Ordinary Share Capital or assets of the Company [...].353

(1) Scope of Expropriation Under Article 16.2 of the Implementation Agreement

a. Parties' Submissions

256.
The Claimant submits that the term "expropriate" in Article 16.2 of the Implementation Agreement should be given the meaning as understood under international investment law. According to the Claimant, the term must be read in the context of the factual background, including that: (i) the Implementation Agreement was part of a suite of agreements entered into to support a significant foreign investment in Tanzanian infrastructure; (ii) the purpose of the Implementation Agreement was to provide investment protection to IPTL and its debt and equity investors; (iii) the language of Article 16.2 of the Implementation Agreement is broad and there is no definition of "expropriation", albeit there is a prohibition of the same by any "Governmental Authority", which is defined by Article 1.1. of the PPA, and could include executive, legislative, administrative or judicial acts; and (iv) as there is an ICSID arbitration clause, there was an intent that the term "expropriate" would have the meaning attributed to it by ICSID tribunals.354
257.
The Claimant similarly submits that the Parties’ agreement on the meaning of "expropriate" under the Implementation Agreement is not prohibited by Tanzanian Law, and expropriation can have a meaning independent of the statutory protection in Section 22 of The Tanzanian Investment Act, 1997. Furthermore, according to the Claimant, claims for indirect, creeping expropriation and measures tantamount to expropriation are contemplated by The Tanzanian Investment Act, 1997 and the National Investment (Promotion and Protection) Act, 1990, as they reference investment treaties, which commonly encompass such broad notions of expropriation.355 Moreover, the Claimant underscores that it is not bringing a claim under domestic legislation, so the only matter that the Tribunal needs to determine is the meaning of "expropriation" under the Implementation Agreement.356
258.
The Claimant submits, in the alternative, that even if Article 16.2 is construed to give the term "expropriate" a narrow meaning, the Tribunal should nonetheless consider international investment law protections against expropriation, which the Claimant contends cannot be disregarded.357 As support for this premise, the Claimant cites Caratube v Kazakhstan, for example, where the tribunal concluded that protections under international investment law could not be ignored even when parties have chosen domestic law to apply.358
259.
With respect to the elements of expropriation, citing prior ICSID cases,359 the Claimant submits that expropriation does not require a benefit to accrue to the State.360 Moreover, the Claimant contends that judicial acts may constitute expropriation. The Claimant submits that Article 16.2 of the Implementation Agreement anticipates expropriation through judicial acts as it explicitly prohibits expropriation by any "Government Authority", which, according to Article 1.1 of the PPA, includes any "court, judicial or administrative body."361
260.
In the Claimant’s view, the test for judicial expropriation is the same as any other form of expropriation: expropriation occurs when the act complained of results in a substantial deprivation of a property right or benefit of a property right.362 The Claimant underscores that the expropriation standard is distinct from a denial of justice and that there is consequently no requirement for judicial acts to be "tainted by a denial ofjustice."363 Similarly, the Claimant contends that there is no requirement to exhaust local remedies before pursuing a claim for expropriation by the judiciary.364
261.
With regard to the Respondent’s argument that the Claimant did not possess property rights that could be subject to expropriation, the Claimant explains that the Implementation Agreement is different from a bilateral investment treaty and that its claims are not for any property rights which it or Mechmar holds. Rather the Claimant is claiming a breach of the contractual undertaking not to expropriate the Ordinary Share Capital and assets of IPTL as listed in Article 16.2 of the Implementation Agreement.365
262.
GoT submits that Article 16.2 of the Implementation Agreement is subject to Tanzanian law, and it must therefore be interpreted and construed in accordance with Tanzanian law.366 Under the Law of Tanzania, the concept of "expropriation" is limited to a form of "lawful expropriation, enacted through a legislative act, entailing a dispossession of the expropriated party and a correspondent taking of the property by the State against compensation of the expropriated party".367 Moreover, although the Claimant argues that the definition of "Governmental Authority" in the Implementation Agreement includes any "court, judicial or administrative body", this definition must still be interpreted in light of Tanzanian law, which does not recognize judicial expropriation.368
263.
GoT says that the Constitution of Tanzania protects personal rights to property, and that special Tanzanian laws in particular Section 22 of The Tanzania Investment Act, 1997 and Section 28 of the National Investment (Promotion and Protection) Act, 1990 speak only to this form of legal expropriation and no other form such as "indirect, judicial or creeping expropriation to the benefit of third private parties and with no benefit whatsoever accruing to the State. "369
264.
The provisions relied upon by the Respondent are:

i. National Investment (Promotion and Protection) Act, 1990, Section 28:

28.-(I) No approved enterprise, or any property belonging to any person shall be compulsorily taken Possession of, and no interest in a right over such enterprise or property shall be compulso rily acquired except for public interest and after due process of the law.370

ii. The Tanzania Investment Act, 1997, Section 22:371

22(1) [...] (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 [...]

265.
The Respondent further refutes the Claimant’s submission that Section 23 of The Tanzania Investment Act, 1997, which references bilateral investment treaties, was meant to incorporate the wider concept of expropriation under those instruments as that provision merely states the obvious: that investors with bilateral investment treaties have access to arbitration; but Section 23 does not purport to incorporate the bilateral investment treaties definition of expropriation.372
266.
The Respondent submits that Article 16.2, read with Article 20.1 of the Implementation Agreement, presupposes a direct taking of the Facility by GoT373 and that in all such cases, compensation would be payable by GoT in accordance with the formulae set out in Schedule 2 thereof, which corresponds with the value of the Facility taken over. GoT concedes that there is no specific reference to a "transfer of the Facility" to GoT specified under Article 20.1(d) of the Implementation Agreement ("expropriation"), but says that it would be unfair to GoT to have to pay compensation for the value of the Facility without the transfer of the Facility to GoT and therefore it must be inferred that GoT must have already acquired the Facility. It therefore concludes that in all situations, GoT must have directly acquired possession of the Facility, viz. that GoT has taken over the Facility or acquired shares in IPTL, neither of which have in fact occurred as the Facility remains owned by IPTL, a private legal entity.374
267.
The Respondent also submits that because the compensation for expropriation, which is under row 4 of Schedule 2 of the Implementation Agreement, is less than compensation for contractual breaches under Row 2 of Schedule 2, the remedy contemplated under Article 20.1(d) of the Implementation Agreement must be a reference to "lawful expropriation" otherwise "it would make no sense for the Government to escape the obligation to pay a higher compensation as ordinarily due in case of breaches of the Implementation Agreement."375
268.
The Respondent objects to the Claimant’s attempt to incorporate international law, ignoring the specific applicable law clause that designates Tanzanian law. The Respondent counters that scholars have confirmed international law cannot be imported where there is a specific municipal law in the contract. Moreover, the Respondent points out that in addition to the ICSID clause, there is also an ICC clause in the contract.376 The Respondent similarly rejects the Claimant’s argument based on Article 42 of the ICSID Convention to take into account international law, as this provision only applies where there is no party agreement, and in this case the Parties agreed to the application of Tanzanian law.377 The Respondent argues that not taking Tanzanian law into account would be a ground for annulment.378
269.
In addition, the Respondent contends that even under an international law standard, the Claimant’s case fails as the State has not received either a direct or indirect benefit from the alleged expropriation. The Respondent further argues that another flawed aspect of the Claimant’s case is that the Claimant only holds security rights, which do not constitute property rights that can be expropriated.379
270.
The Respondent submits that even if international investment law were applicable, the Claimant’s case on judicial expropriation would fail as its case relates only to a few judicial decisions, not to the judiciary as a whole.380 In the Respondent’s view, under international law, for a judicial act to constitute expropriation it "cannot simply be illegal but the proceedings leading up to said act must amount to denial of justice", which necessitates the exhaustion of local remedies.381 Moreover, the Respondent asserts that there can be no judicial expropriation when the "frustrations suffered by the investors in local courts were due to their own procedural errors", which the Respondent submits is the case here.382

b. Tribunal's Analysis

271.
The term "expropriate" was used twice in Article 16 of the Implementation Agreement, but it has not been specifically defined. As the Implementation Agreement is expressly subject to Tanzanian law,383 the Tribunal has some difficulty accepting the logic of GoT’s argument, that Tanzanian law recognises only legal expropriation with compensation and therefore what was allegedly done by GoT could not be "expropriation" as contemplated in Article 16 of the Implementation Agreement. In other words, GoT appears to contend that Article 16 of the Implementation Agreement is an undertaking by GoT not to expropriate legally and not a prohibition against expropriating illegally. Perhaps, realising the strained logic in its submission, the Respondent subsequently accepted that "[t]his does not mean that cases of unlawful expropriation would be unable to give rise to the Government's liability but simply that IPTL or its valid assignees would have no action under the Implementation Agreement for any event of unlawful expropriation [...]."384
272.
The Tribunal does not consider it plausible that the parties would have entered into the Implementation Agreement with protections for IPTL that went no further than lawful expropriation under Tanzanian law. In the Tribunal’s view, this argument is obviously flawed and must be rejected.
273.
The Constitution of Tanzania provides in Article 24 that -

(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 authori ty of law which makes provision for fair and adequate compensation.385

274.
The Constitutional position is that to deprive someone of its property, whether for purposes of "nationalization or any other purposes", "fair and adequate compensation" must be provided to the person so deprived. This overarching protection is extended to foreign businesses under specific Tanzanian legislation (viz. The Tanzania Investment Act, 1997 and National Investment (Promotion and Protection) Act, 1990), which provide that "no interest in a right over such [...] property shall be compulsorily acquired [...]" and any acquisition of a "business" [...] "whether wholly or in part", of a foreigner by GoT is permitted386 only after due process of law and with adequate compensation being given. The law also expressly provides protection for an investor against being "compelled by law to cede his interest in the capital to any other person."387 This means that any form of interference with the rights of foreign investors, whether by dispossessing or disempowering them of their lawful exercise over the investment or related security, would be unlawful expropriation and expressly prohibited. The granting of protection to foreign investment is in the interest of Tanzania. GoT's acceptance of the prohibition against expropriation (which it is in any event legally bound not to do under Tanzanian law) under Article 16.1 of the Implementation Agreement and its undertaking not to expropriate under Article 16.2 of the Implementation Agreement, do not violate and is in fact fully consistent and compliant with the Tanzanian Constitution and the investment laws.
275.
The Preamble in the Implementation Agreement sets out clearly that it was given to encourage the public-private sectors' cooperation to build the Facility for generating electricity for the national grid. The Implementation Agreement speaks of foreign investors, lenders, foreign currency, etc. The reference by GoT, to the use of the notion of "expropriation" in The Tanzania Investment Act, 1997 and the National Investment (Promotion and Protection) Act, 1990 shows that the term is intended as a protection against compulsory acquisition given in relation to foreign investments in Tanzania. Both pieces of legislation make specific reference to ICSID. In the Tribunal’s view, both Tanzanian legislations are clearly intended to reflect what is usually understood and accepted in international law, in particular in the application of the ICSID Convention and investment treaties, which was the context in which these laws on foreign investment were enacted. Similarly, the term "expropriate" as used in the text of Article 16, not being qualified in any manner must be given it ordinary meaning viz. it includes both direct and indirect expropriation as understood in international law.
276.
The right to be protected against expropriation in the international context is a right given by host States to ensure foreign investors enjoy protection against involuntary deprivation or dispossession of an investor’s property or property rights. Expropriation may be expressly permitted and thereby lawful if it is made pursuant to Tanzanian law, for public purposes, and subject to due process and adequate compensation. The clearest example of a direct expropriation is when a host State takes over the project, the facility, or its management directly and runs it as a State enterprise; or when the host State compulsorily acquires the controlling shares of the investor company. Expropriation can also be achieved indirectly, where no actual outright seizure or taking of property by the State occurs but actions attributable to a host State (whether directly or indirectly) result in the investor being deprived of the "economic value of the investment or deprive the owner of its ability to manage, use or control its property in a meaningful way."388
277.
There is a body of decisions both in ICSID and non-ICSID investor-State arbitrations relating to claims for indirect expropriation. Many of these arose from a change to the regulatory regime of the host State that negatively impacted the investment at issue.389 In essence, to establish expropriation, the Claimant needs only show that the rights that it would otherwise enjoy have been substantially impacted or that it has been deprived of control over or access to the economic use of its investment. There is also no requirement that GoT must have directly acquired possession of the Facility, by itself taking over the Facility or the shares in IPTL. Tanzanian law recognises that "expropriation" could be founded upon the actions of GoT which lead to the acquisition by "any other person."390
278.
The Respondent, in its argument against indirect expropriation, takes the view that expropriation must only mean expropriation by GoT executed by way of an act of the legislature and that therefore the actions or omissions of all other arms of the State, whether the judiciary or government linked entities could never be attributable to the GoT. In the first place, nothing in the Tanzanian Constitution supports the suggestion that expropriation could only take place by way of a Tanzanian legislation. In the Tribunal’s view, there is no justification for this limitation. The State is compendious and may act through different agencies which actions are nevertheless attributable to the State because these actions carry out State functions. The acts of the State must necessarily include the acts of organs of State, the executive and judicial arms of the State and any entity given public powers to act on behalf of the State. The Tanzanian Constitution also does not exclude any specific arm of government the judiciary as a possible player in the act of expropriation.
279.
The Tribunal does not disagree with the Respondent that the judiciary should not be implicated, or its acts be described as "judicial expropriation" simply because judicial decisions were taken in error or may be considered aberrant. However, judicial decisions that permit the actions or inactions of other branches of the State and which deprive the investor of its, property or property rights, can still amount to expropriation. While denial of justice could in some case result in expropriation, it does not follow that judicial expropriation could only occur if there is denial of justice.
280.
As for other possible actors in the alleged expropriation, the Respondent has pointed out that the Administrator General and Official Receiver’s office when acting in its capacity as liquidator (provisional or otherwise) or receiver was acting as an agent of the company in or pending liquidation. That is indeed the proper role. However, the office of the Administrator General and Official Receiver remains an arm of GoT; it is at all times a part of the Ministry of Justice and Constitutional Affairs. Insofar as discharging its duties in the interest of the company in liquidation, it is expected to hold a high standard of integrity and impartiality. If the office of the Administrator General and Official Receiver acts beyond the boundaries granted by the law, such improper acts could not be attributable to the Company as its principal. The Administrator General and Official Receiver must be liable for its own actions and not that of the Company. This is all the more so if it acted in a manner that favoured the GoT to the detriment of other persons with an interest in the company in liquidation. The Respondent cannot hide behind the argument that the Administrator General and Official Receiver was merely acting as an agent of the company.
281.
In this context, the Tribunal notes that the undertaking given against expropriation under Article 16.2 of the Implementation Agreement is made in respect of the actions of "GOT",

"TANESCO", or "any Governmental Authority", The term "Governmental Authority"391 is defined as -

Any state, municipal or local government or regulatory department, body, political subdivision, commission, instrumentality, agency, ministry, court, judicial or administrative body, taxing authority or other relevant authority having jurisdiction over either Party, the Facility.

282.
There is no question that the office of the Administrator General and Official Receiver is a Government Authority, which could exercise authority over the parties. Its action or inaction beyond that permitted by law must therefore be attributable to GoT.
283.
The Respondent’s submission that the Claimant has no property interest but merely security rights is also quite misplaced. Firstly, the Claimant is not claiming a breach of the Constitution where the term "property" is used. The Claimant’s claim is based on the contractual terms of Article 16 under which GoT, is prohibited from expropriating or acquiring the Facility or IPTL, and undertook that it (and TANESCO, and any Government Authority) would not "expropriate, compulsorily acquire, nationalise, or otherwise compulsorily procure any Ordinary Share Capital or assets of the Company." The Claimant’s interest in the Facility and shares of the IPTL may have come through the Security Package. That itself does not mean the Claimant’s interest are merely security rights and not property rights. The Claimant as absolute assignee has all the rights in and of IPTL and IPTL’s assets for which the Respondent undertook not to expropriate or compulsorily acquire or otherwise procure. There is no question that these are property rights and not mere security rights.
284.
The Tribunal therefore holds that the contractual prohibition in Article 16 of the Implementation Agreement against expropriation and the undertaking not to expropriate given by GoT are compliant and consonant with the Tanzanian Constitution. The Respondent is therefore bound by its terms not to do anything which would deprive the Claimant’s interest in IPTL and the assets of IPTL. Whether the Respondent through its various "instrumentality, agency, ministry, court, judicial or administrative body" acted in a manner that amount to a breach of Article 16 is a matter of fact that the Tribunal needs to hereafter examine.

(2) Claimant's Expropriation Allegations

285.
In the discussion that follows, the Tribunal will consider the allegations made against GoT that the Claimant asserts are steps which either individually or collectively violate the prohibition against expropriation.
286.
The principal actors identified by the Claimant that had roles in this regard were:

i. TANESCO;

ii. the Tanzanian courts (particularly the actions of Utamwa J in handing down the Utamwa J Order);

iii. the provisional liquidators appointed over IPTL and the Administrator General;

iv. BRELA;

v. the Minister of Energy and Minerals and the PS MEM;

vi. the Attorney General; and

vii. the Bank of Tanzania.

287.
The Respondent on the other hand says that the real parties involved in the entire affair were several different entities, mostly private ones, such as IPTL, VIP, Mechmar, PAP and others, but not the Government.392 Additionally, the Respondent submits that as a factual matter neither IPTL nor SCB HK was ever nationalised or expropriated by the Government. IPTL has always been a private company and its rights and assets have remained with its shareholders, albeit they have changed. In addition, the Respondent submits that the Tariff Dispute was eventually negotiated between TANESCO and IPTL, the Escrow Account was released upon IPTL’s instructions, the top up payments were paid to IPTL, and the Facility remained in IPTL’s possession.393
288.
The Claimant lists the following actions as constituting expropriation of the Facility, IPTL's other assets and IPTL's Ordinary Share Capital by the GoT, TANESCO and Governmental Authorities in breach of Articles 16.1 and 16.2 of the Implementation Agreement:394

i. TANESCO's failure to make payments to IPTL or SCB HK under the PPA;

ii. the steps taken to frustrate the Interpretation Proceedings by TANESCO, the Tanzanian courts and the First PL;

iii. the First PL's failure, in breach of his duty to preserve and protect IPTL's assets, to take any steps to enforce TANESCO’s obligation to pay the tariff under the PPA;

iv. the steps taken by TANESCO, the Second PL and the Tanzanian courts to frustrate the PPA Arbitration;

v. the Second PL and Administrator General's countersignature of the VIP-PAP-SPA which purported, wrongly, to recognise PAP as owner of Mechmar's shares in IPTL;

vi. the Utamwa J Order;395

vii. the actions of TANESCO, the Minister of Energy, the PS MEM, the Attorney General and the Bank of Tanzania in the period September to December 2013 facilitating the release of the Escrow Account funds to PAP; and

viii. the Minister of Energy and the PS MEM's refusal to consider the evidence submitted by SCB HK, following the Utamwa J Order, concerning its rights over IPTL's Ordinary Share Capital. This was followed by BRELA's subsequent registration of PAP as the owner of all of the shares in IPTL, which constitutes an expropriation of IPTL's Ordinary Share Capital.

289.
The Respondent submits that there was no breach of Article 16.2 of the Implementation Agreement. In summary, the Respondent disputes the Claimant’s expropriation claims as follows:

IPTL's rights under the PPA : payments under the PPA were delayed by TANESCO's decision to dispute invoices issued by IPTL. This decision was justified by IPTL overcharging TANESCO, as eventually recognised by the PPA Tribunal. In not pursuing the Interpretation Proceedings (which were eventually withdrawn by Mechmar) the first provisional liquidator of IPTL, Mr Rugonzibwa (even assuming that he may be considered a Government official in his function as provisional liquidator, which is denied), exercised his discretion as granted to him by the law. In any case, TANESCO and IPTL eventually reached an agreement to end the Tariff Dispute and restore payments to IPTL, which now renders Claimant's complaint in this respect moot and untimely.

The Ordinary Share Capital of IPTL : This was transferred by Mechmar and VIP, the original shareholders of IPTL, to PAP. To the extent that said transfers violated SCB HK's rights as a secured creditor, VIP and Mechmar are the entities responsible for said violation. To the extent that the Utamwa J Order recognised said transfers, SCB HK did not take the necessary actions to counter said finding or to have its rights otherwise judicially recognised in Tanzania and is thus now barred from bringing a claim of expropriation by the judiciary. Furthermore, Claimant cannot complain about Mr Saliboko, the second provisional liquidator of IPTL (assuming that he may be considered a Government official in his function as provisional liquidator, which is denied) countersigning the VIP/PAP SPA as Mr Saliboko was entitled to have doubts on SCB HK's standing as a secured creditor, given that the PwC Report noted that the Security Deed had not been registered or stamped at BRELA. In any case, as provisional liquidator, Mr Saliboko's actions were subject to the scrutiny of the High Court of Tanzania, before which Claimant failed to adequately challenge them. Finally, Claimant can neither complain about Government officials or BRELA recognising the transfer of the Ordinary Share Capital of IPTL as they could not reverse the findings of the judiciary made through the Utamwa J Order.

The Facility : The same considerations made with respect to the Utamwa J Order in relation to the transfer of the Ordinary Share Capital of IPTL apply to the transfer of the Facility to PAP.

IPTL's interest in the Escrow Account and top-up payments : further to the Utamwa J Order transferring the affairs of IPTL to PAP and to TANESCO and IPTL reaching an agreement for the release of the Escrow Account funds, the Government could not refuse to transfer said funds to IPTL. While the Escrow Agreement expressly prohibits payments being made to creditors of IPTL (such as SCB HK) - and contains no such prohibition with respect to shareholders or managers of IPTL - the Government released the funds on the basis of IPTL's instructions. The Government played no role with respect to the top-up payments, which were agreed exclusively between TANESCO and IPTL in October 201 3 and were directly paid by TANESCO to IPTL in the years thereafter.396

290.
The Tribunal analyses the Claimant’s expropriation allegations, in turn, below.

a. TANESCO's Failure to Make Payments under the PPA, and the Interpretation Proceedings frustrated by the Tanzanian Courts, TANESCO and GoT officials

(i) Tribunal's Analysis

291.
The ICSID 1 Award397 resolved some of the initial disputes between IPTL and TANESCO by incorporating a new financial model agreed to by TANESCO and IPTL, which would be used by the parties to calculate the capacity and energy tariffs after the start of commercial operation. The ICSID 1 Tribunal also trimmed down certain costs incurred and ordered them to be borne by IPTL.
292.
Differences between Mechmar and VIP thereafter arose when VIP took the position that Mechmar should bear the additional expenses disallowed to be recoverable by the ICSID 1 Tribunal, instead of accounting for them as expenses to be borne by IPTL. This led to VIP petitioning for the liquidation of IPTL in the Tanzanian High Court398 on 25 February 2002. Against this background, Mechmar commenced the LCIA Arbitration based on the PSA of 28 September 1994, and eventually obtained the LCIA Award399 directing VIP to discontinue its Petition for Winding Up and application for appointment of a provisional liquidator in Misc. Civil Cause No. 49 of 2002 before the Tanzanian courts.
293.
Meanwhile, TANESCO began payment of the tariffs following the commencement of commercial operations of the Facility in 2001. But in 2004, TANESCO started raising issue over certain tariff payments. TANESCO continued paying IPTL on the urging of GoT.400 These payments flowed down to enable repayments of the loan by IPTL (first to Danaharta and later to SCB HK). TANESCO stopped doing so in May 2007.
294.
In May 2007, TANESCO raised the issue of Mechmar's contribution to the capital of IPTL which was made principally by way of a shareholder loan rather than paid-up share capital. TANESCO argued that this was inconsistent with the PPA and the ICSID 1 Award. TANESCO however made payments to the Escrow Account.
295.
The differences between IPTL and TANESCO relating to the tariff payment led IPTL (the majority shareholders Mechmar were supported by SCB HK) in June 2008, to commence the Interpretation Proceedings under Article 50 of the ICSID Convention in relation to the ICSID 1 Award. IPTL’s action was challenged by TANESCO as lacking a valid corporate act on the basis that VIP had not authorised the commencement of the Interpretation Proceedings. Mechmar sought to rely on its LCIA Award to assert its authority to maintain the Interpretation Proceedings. The LCIA Award was never given effect, and, although an application for setting aside was made in September 2003 and an application for enforcement was made in November 2004, they were not heard until 31 October 2008 when the LCIA Award was eventually refused enforcement by Oriyo J401 on the basis that Mechmar had not complied with the court's direction to serve submissions as directed earlier.
296.
In November 2008, to establish IPTL’s position to pursue the Interpretation Proceedings, SCB HK applied to the Tanzanian courts to restrain VIP from continuing the Winding Up proceedings against IPTL.402 This application was never heard.
297.
On 15 December 2008, in the exercise of its power granted to it under the Charge of Shares, SCB HK appointed a receiver over VIP's shares in IPTL to order use of those shares to vote in favour of continuation of the Interpretation Proceedings.403
298.
On 16 December 2008, the Receiver appointed for the VIP Shares applied to the High Court of Tanzania in the same Misc. Civil Cause No. 49 of 2002 asking that "the petition for the winding up, and the application for the appointment of a provisional liquidator [...be] withdrawn and/or abandoned."404
299.
On that same day, 16 December 2008, which was also the day the tribunal in the Interpretation Proceedings was set to sit to hear the Parties in London, the High Court of Tanzania (Oriyo J)405 dismissed IPTL’s application for a stay, granted VIP’s application for the appointment of a provisional liquidator and appointed the Administrator General/Official Receiver as First PL. The written decision of Oriyo J does not suggest any hearing was held before the matters were decided. In relation to the stay application, the Learned Judge, while accepting that the application for appointment of a provisional liquidator should not be decided before considering IPTL’s application for stay of the proceedings, went on to dismiss the application for stay saying it "does not serve any useful purpose":406

[...] It will be unfair to determine the petition to wind up IPTL before its applications for stay is determined. However, due to intervening factors since March, 2002 to date, a decisions on application for stay may not serve any useful purpose [...] And as correctly stated by the applicant the application for stay of proceedings has been overtaken by events and is now redundant. It has become obsolete; it does not serve any useful purpose. In the circumstances, the application for stay of proceedings pending arbitration is accordingly dismissed. [...].

300.
It is unclear what circumstances convinced Oriyo J that the stay application could serve no useful purpose. What is clear is that the LCIA Award though not enforced remains a valid arbitral award, unless it had been set aside by the court of the seat of arbitration (viz. the English courts). It should be noted that in her decision of October 2008, Oriyo J did not in fact set aside the award, because she took the view that "[h]aving dismissed the Petition to Enforce Award, the application to set aside the Award is rendered obsolete."407
301.
In relation to VIP’s application for a provisional liquidator, Oriyo J stressed that Mechmar and IPTL’s written submissions were "limited to points of law" and "have not countered the affidavits in the petition by the applicant; those averments stand uncontroverted and are accordingly adopted by the court." Relying on that, the court ruling appeared to have accepted that:

On the degree of urgency; its relevancy here cannot be overstated because the oppressive acts, fraud, etc of Mechmar against VIP has been in a continuous process since 2001; that is, for a period of over seven years […]

The need for the appointment of a Provisional Liquidator pending winding up has in no doubt been adequately established by VIP through the affidavits of J ames Burchard Rugemalira filed on 25.2.2002 and 24.9.2003. [...].408

302.
The court also remarked that the appointment of a provisional liquidator is justified in the public interest in that:

It is intended to serve interests of groups like those doing b usi ness with IPTL including TANESCO and the government of Tanzania.409

303.
Urgency, potential detriment and public interest are of course sound factors that should be considered by a court to appoint a provisional liquidator. It is curious that Oriyo J did not in her written decision explain what had informed her of the sudden urgency that prompted her to revive an application made in 2002 and relying on affidavits made some five years ago to hold that an immediate appointment would be necessary and in the public interest without calling upon the parties involved to be heard substantively.410 In making this observation, the Tribunal is assuming that the application411 by the VIP Share Receiver made on the same day was received by the court after the release of the Learned Judge’s decision. If the situation was, otherwise, a further question arises as to why the Learned Judge did not consider the application for the withdrawal of the provisional liquidator application and the abandonment of the liquidation petition.
304.
The appointment of the First PL halted the Interpretation Proceedings scheduled for 16 December 2008, as the authority to maintain any action on behalf of IPTL rested with the First PL. As provisional liquidator, the First PL’s duty is to gather in and safeguard the assets of IPTL. On this understanding, SCB HK wrote to the First PL seeking his consent to continue the Interpretation Proceedings, as well as an undertaking to bear the costs incurred in doing so and only seeking to recover them from IPTL in the event a favourable decision be made in IPTL’s favour.412 This was followed up on 8 January 2009 by SCB HK’s lawyers413 repeating the same request and offering similar costs outlay. No response was forthcoming from the First PL.
305.
On the application of SCB HK on 23 January 2009, the Tanzanian High Court made an order for the appointment of an Administrator for IPTL on 27 January 2009.414 Unlike a provisional liquidator, whose role is to preserve assets for creditors in anticipation of liquidation, the role of an Administrator is to attempt a possible rescue of the company. Mihayo J saw a "new ground" in Tanzanian company law through an Administrator, in that it would give IPTL an opportunity to navigate on a new and firm direction. The Learned Judge was conscious that such an order would dislodge the order made by Oriyo J appointing the First PL -

But what has taxed my mind a great deal is whether my granting of the prayer for appointing an administrator has the effect of torpedoing, cancel[l]ing or over ruling my sister Judge which powers I do not have. I am aware that Oriyo, J. was seeking to protect the assets of the Company without more. An application like the present one was not before the court then. After giving the question serious thought, in my considered opinion, this court has if it grants the application, an opportunity to take matters further in a positive way, by rescuing the company. Under the provisions of section 250 of the Act, an administration order protects a company from its creditors and also protects the creditors. [...]

I am persuaded that the powers as provided are far more than those of a provisional liquidator and are capable of rescuing the company and protecting the creditors. This means the 100mw the company is capable of ge ner ating, and was actually generating, will not go down the drain.415

306.
Mihayo J made his order without hearing the First PL, a procedural error that led to the First PL's complaint to the Chief Justice and placed the matter suo motu on revision to the Court of Appeal, which heard the same on 19 March 2009.
307.
On 24 March 2009, the Administrator confirmed his instruction for the Interpretation Proceedings to proceed.416 The tribunal in the Interpretation Proceedings decided then to proceed. However, on 9 April 2009, the Court of Appeal made its ruling revoking the appointment of the Administrator. In doing so, it roundly condemned Mihayo J for failing to hear the First PL and IPTL before making the order appointing the Administrator: "[...] there can be no equal justice when one, for no compulsive reason, is condemned unheard."417
308.
On 15 April 2009, the First PL informed the tribunal in the Interpretation Proceedings to stay the proceedings.418
309.
On 17 September 2009, SCB HK re-applied419 for the appointment of an administrator. This matter remained unheard and was eventually withdrawn in 2013.
310.
In December 2009, SCB HK sought to intervene directly in the Interpretation Proceedings, exercising its rights as assignee of the PPA pursuant to the Security Deed. The Interpretation Proceedings did not proceed much further save for the challenge brought against Judge Brower, who resigned and was replaced by Mr Makhdoom Ali Khan on 23 April 20 1 0.420 Mr Rokison, the president of the tribunal was also challenged on 25 June 2010 and the proceedings were thereby suspended.
311.

The ICSID public case record421 shows that IPTL requested the discontinuance of the Interpretation Proceedings on 7 July 2010,422 to which TANESCO agreed on 13 July 2010.423 The ICSID 1 Interpretation Proceeding finally ended on 19 August 2010 by the discontinuance order of the tribunal.

312.
SCB HK relies upon this sequence of litigation to show that TANESCO, GoT officials and the Tanzanian courts acted to frustrate IPTL’s efforts to progress the Interpretation Proceedings.424 The Tribunal will consider whether these interventions sought to deprive IPTL or SCB HK of their investment or their rights in the investment.
313.
Although TANESCO failed to terminate the PPA in the ICSID 1 arbitration, it succeeded in reducing the cost of the project from USD 163.5 million to USD 127.2 million, with a senior debt of USD 89 million (further reduced to USD 85.3 million) and the remainder (approximately USD 38 million) in equity.425 This impacts the calculation of the tariff. The ICSID 1 Award also disallowed certain EPC costs, thereby reducing the EPC costs from USD 114 million to USD 98 million.426 This had the impact of reducing the capacity charges payable by TANESCO. The ICSID 1 Award was based on a financial model of 70% debt and 30% shareholders’ equity. Upon realising that IPTL’s shareholding had been financed largely by shareholders’ loans, TANESCO took the position that it could not be bound by the formula for the calculation of the capacity charges as agreed.
314.
In the Tribunal’s view, whatever the merits of TANESCO’s position, TANESCO did appear to have a concern that permitting a review of the ICSID 1 Award in the Interpretation Proceedings risked weakening its bargaining position to insist on a reduction of capacity charges. Adopting a litigation or negotiation strategy to protect one's economic financial or commercial interest is the right of any party. The various challenges launched by TANESCO to the Interpretation Proceedings against IPTL’s standing, refusing SCB HK’s participation as intervener and disqualification challenges against members of the tribunal may seem unhelpful and obstructionist, nevertheless they were part of their litigation strategy. This alone, does not deprive IPTL of the benefits of its investment.
315.
The only government official implicated in this scenario was the First PL. SCB HK’s complaint is that he did nothing to progress the Interpretation Proceedings and had frustrated attempts to move the Interpretation Proceedings even when SCB HK had offered to fund the proceedings on a cost-recovery basis should IPTL succeed against TANESCO. No explanation was forthcoming from the First PL to explain the position he had taken. It is the duty of the provisional liquidator, to gather in and preserve the assets of IPTL. Why then the inaction? Counsel for GoT suggested that the First PL must have considered that the potential benefits to be gained in the Interpretation Proceedings were outweighed by the costs of continuing them and the risk that they could be unsuccessful. SCB HK’s offer that it would bear the costs and seek costs recovery only upon successful recovery from TANESCO would appear to have taken away much of the risk. Arguably, if IPTL failed in the Interpretation Proceedings, there could be cost exposure, but failing to take up SCB HK’s invitation to discuss funding would appear to be imprudent. It is unexplained why no steps were taken to protect the interests of IPTL.
316.
Unlike TANESCO which was protecting its own financial interest, the First PL has the primary responsibility of preserving the assets of IPTL. SCB HK, as a substantial creditor and successor lender, is an investor protected under the Implementation Agreement. The First PL’s inaction could well have put the investor at risk. However, it is uncertain and somewhat speculative to suggest that had the First PL decided to proceed with the Interpretation Proceedings, the outcome would be one that favours the IPTL. As such, the Tribunal is not prepared to hold that this lapse by the First PL is sufficient to meet the threshold of expropriation.
317.
Looking then at the role of the courts, the Tribunal does find Oriyo J’s refusal of the stay of the liquidation proceeding and the application for the appointment of the provisional liquidator, troubling. Oriyo J came to a view that was not explained and perhaps inexplicable: that the stay application no longer served any purpose and was obsolete; that the appointment of a provisional liquidator was urgent; and that it would be in the public interest (with specific mention of TANESCO and the Government) to appoint a provisional liquidator. She did so without calling upon any of the parties concerned to address her. In doing so, Oriyo J did exactly (if not more) than what the Court of Appeal said in its judgment of 9 April 2009427 with regard to Mihayo J’s order appointing the administrator. Oriyo J was fully aware that the interested parties were all represented and yet did not call upon them to address her. Instead she chose to make a decision on the same day that she had scheduled a meeting for directions. It appears too coincidental that the judge decided to deliver her decision on the day (16 December 2008) the share receivers appointed over VIP (the petitioner for liquidation and for appointment of a provisional liquidator) applied to withdraw the Petition and application, which was also the same day the Interpretation Proceedings were scheduled to begin in London.
318.
Oriyo J’s primary justification for the order appointing the provisional liquidator lacked substance and was flawed in procedure and the appointment of a provisional liquidator had a direct impact on IPTL as a going concern.
319.
The Court of Appeal was of course correct to have set aside Mihayo J’s order appointing the Administrator for breach of due process. The Court of Appeal however declined to consider the merits of the application to appoint the administrator, and simply said that there were "no compelling reasons to discuss the remaining issues" relating to the appointment of an administrator, suggesting that if parties still wished to pursue such an appointment, they could do so in the High Court. SCB HK then filed a new application428 on 17 September 2009 in Misc. Cause 112 of 2009 for the appointment of an administrator, serving it on the Provisional Liquidator of IPTL, VIP, IPTL and the creditors of IPTL. This application was noted by the court on several occasions (e.g. Kaijage J on 6 November 2009,429 9 February 2011,430 Mwaikugile J on 11 August 2011,431 and again by Kaijage J on 24 August 2011,432 1 9 January 2012 and on 16 March 20 1 2.433 The Court of Appeal noted this lapse in its decision of 17 December 2012.434
320.
The Tribunal accepts that divergence of views by the courts is to be expected and is very much part of the legal system in many jurisdictions. Poor decisions or decisions without proper justifications do not rise to the standard of expropriation. With regard to the actions and inaction of the Tanzanian courts in relation to attempts by the Claimant to revive the ICSID 1 Award by the Interpretation Proceedings, the Tribunal finds that the Tanzanian judiciary as a whole, had not acted to deprive IPTL or SCB HK of the economic value of their investments.

b. PPA Arbitration: TANESCO, the Second PL and the Tanzanian courts; VIP,Mechmar Share transfers and control of IPTL; and Utamwa J Order

(i) PPA Arbitration

321.
SCB HK’s inability to proceed with the Interpretation Proceedings to resolve IPTL’s differences with the capacity charges and tariff payments as set out in paragraphs 293 to 312 above, led SCB HK (as IPTL’s assignee) to commence the PPA Arbitration in September 2010. The PPA Arbitration was concerned with issues of IPTL’s actual "equity" participation, the tariff calculations and the amount outstanding due to the IPTL. These were finally disposed by the PPA Decision in February 20 1 4,435 the PPA Award in September 20 1 6436 and confirmed by the ad hoc Annulment Committee in 2018.437
322.
Numerous adverse findings were made by the tribunal in the PPA Decision438 and in the PPA Award, and TANESCO was eventually found liable for not making payments of the tariff to IPTL and SCB HK.
323.
The Tribunal has considered the PPA Decision and the PPA Award and noted that while there were allegations and suggestions that through some improper dealings GoT "took over control" of the Facility,439 the disputes were essentially contractual in nature and, in fact, the PPA Tribunal was rightly conscious that an expropriation claim would not be within its jurisdiction.440 The case that TANESCO offered as the basis of its refusal to make payment to IPTL and SCB HK was found by the PPA Tribunal to be wrong and not sufficient to absolve it from its liability to SCB HK. Standing alone, the factual background that gave rise to those disputes and the findings441 of liability in respect of payments due under the PPA could not, in the Tribunal’s view, sustain a claim for expropriation or discrimination against SCB HK by GoT. The fact that TANESCO had not honoured the PPA Award, on its own would also not constitute an expropriatory act as they were but mere commercial disputes and/or noncompliance with obligations under the contract or award.

(ii) Sale of Mechmar Shares and control of IPTL

324.
At a meeting on 8 June 2010442 with the PS MEM of Tanzania, Mr David Kitundu Jairo at his office, SCB HK's legal counsel, Mr Charles Morrison, and Mr Joseph Wesley Casson were informed that Mechmar had approached GoT to sell its majority shareholding in IPTL, and that GoT had decided to buy the shares. Mr Jairo requested that Mr Morrison and Mr Casson attend a meeting with himself and Datuk Baharuden Bin Abd Majid, representing Mechmar, to discuss the Charge of Shares and determine who had the right to sell the 70% of shares in IPTL held by Mechmar to the GoT. A meeting with Datuk Baharuden was held the next day in which Mr Nimrod Mkono and Mr Karel Daele, lawyers for the GoT,443 were also present. Mr Casson and Mr Morrison reminded all that Mechmar Shares in IPTL were charged to SCB HK and that a receiver had been appointed, and it was acknowledged in Mechmar’s Annual Report that:

On 3rd February, 2009, SCBHK exercised its lien over the Company's shares in IPTL and appointed a Receiver & Manager over these said shares. As such, the Company also lost control to govern the on-going legal proceedings against TANESCO a nd the Government of Tanzania in the capacity of a shareholder of IPTL.444

325.
Meanwhile on 7 July 2010, Datuk Baharuden wrote to ICSID withdrawing the Interpretation Proceedings on behalf of IPTL.445 On 13 July 2010, TANESCO confirmed that it had no objection to the discontinuance.446
326.
On 19 July 2010, SCB HK wrote to Mr Jairo, setting out SCB HK’s security interest in the Mechmar Shares, reiterating its position that sale of the Mechmar Shares could not be made by Mechmar but by the Receiver.447 On that same day, ICSID informed SCB HK of the withdrawal of the Interpretation Proceedings by IPTL and invited comments to be received by 23 July 20 1 0.448 It is SCB HK’s case that it was unaware that Mechmar had initiated the withdrawal of the Interpretation Proceedings. Mr Casson said that he thought it was the First PL who had instigated the withdrawal.449 The communication from ICSID to SCB HK indeed made no mention of who initiated the "discontinuation" of the proceedings. The Interpretation Proceedings came to an end on 19 August 2010.
327.
The fact that GoT was in discussions to purchase the Mechmar Shares in or around July 2010 cannot be denied. In its letter of 11 August 2010 to the PS MEM, Mechmar referred to the earlier discussions and stating "as desired by you" (Mr Jairo), submitted its proposal to sell its stake of 70 % shares together with an assignment of its loan under its Shareholders Loan Agreement to IPTL to GoT and promising that:

Mechmar Corp will take such steps and execute such documents or may be required to assuage the concerns of the Government of Tanzania in relation to claims of other parties. Mechmar Corp will also give an irrevocable undertaking to co-operate and assist the Government of Tanzania as well as TANESCO in resist ing and defending against any such claims and to assert its own claims.450

328.
Mr Jairo then wrote to the Attorney-General and, referring to the specific undertaking made by Mechmar set out in paragraph 327 above, sought advice to -

draw up a negotiation strategy for GOT's approval to be used i n th e negotiations with Mechmar Corp for the final buying of the shares.451

329.
GoT was therefore on full notice452 and aware of the interests of SCB HK in the Mechmar Shares and was clearly intent on acquiring the Mechmar Shares.
330.
With no assurance from Mechmar that it would not proceed with the intended sale, SCB HK commenced court proceedings in Malaysia on 9 August 2010, to enforce its charge over the Mechmar Shares. SCB HK's application for an interim injunction to prevent Mechmar from selling the Mechmar Shares was granted on 4 October 20 1 0.453 The court also ordered that the share certificates be delivered to SCB HK within 7 days from date of the order. However, on 12 October 2010, Mechmar's solicitors informed SCB HK that Mechmar had sold its shares in IPTL on 9 September 2010 and delivered the share certificates to the (undisclosed) purchaser i.e., while the injunction application was pending.454
331.
Following another order of the Malaysian Court (High Court of Malaya) on 19 October 2010,455 Mechmar disclosed that the Mechmar Shares were sold to Piper Link Investments Ltd,456 a BVI company that was incorporated only on 2 September 2010. The sale price was USD 6 million, with USD 1.2 million paid as a deposit.
332.
By letter dated 2 November 2010, Mechmar’s solicitors disclosed a letter from a Mr Issa Mohamed Al Rawahy, who was said to be the "owner" of Piper Link explaining that the sum of USD 1.2 million supposed to have been paid as deposit by Piper Link was "paid to my good friend Mr. Omar Mohamed AlBusaidy of Dubai for introducing us [...]."457
333.
SCB HK obtained an order from the High Court of Malaya on 8 November 20 1 0458 appointing "Receivers" of Mechmar. On the same day, Ms Renju commenced action as Share Receiver of IPTL in the BVI Court and obtained an ex-parte freezing order459 against Piper Link to deliver the share certificates to the BVI Court and to take no steps to dispose of the shares pending a trial of the action. The shares were eventually delivered to the BVI Court by Piper Link.460
334.
Martha Renju obtained a final summary judgment from the BVI Court on 11 April 2011461 and the court ordered the release of the share certificates to Martha Renju forthwith. On 20 April 2011, Mr Casson informed the PS MEM of the outcome in the BVI Court (enclosing a copy of the judgement) and copied the same to the Minister for Energy and Minerals and sought an audience with the PS MEM.462 From these events, the Mechmar Shares reached the hands of SCB HK in April 2011 and PS MEM and the Minister were so informed.
335.
On 18 May 2012, the Malaysian Court (High Court of Malaya) made a winding up order in respect of Mechmar to be wound up463 and the receivers earlier appointed were appointed as liquidators. There could be no doubt that the proper persons to represent Mechmar in any transaction relating to the assets of Mechmar would be the Mechmar’s liquidators or persons authorised by them and no other.464
336.
It should also be recalled that the holder of the other 30% of the shareholding in IPTL was VIP, who had executed by deed under seal a Charge of Shares over the same to the Security Agent for the benefit of the secured creditors on 28 June 1997.465 The Security Agent, RHB Bank, for and on behalf of the successor lender, SCB HK, had on 15 December 2008 appointed a receiver over the shares pursuant to its power under the Charge of Shares and the appointment was notified in the register of VIP on 19 December 2 0 0 8.466
337.
By the VIP-PAP-SPA dated 15 August 2013, VIP purported to have sold to PAP its 30% shares in IPTL for USD 75 million.467 The VIP-PAP-SPA in its preamble cited a litany of events relating to VIP’s claim that "SCB"468 had interfered in VIP’s winding-up proceedings which it said had caused VIP loss and damage amounting to USD 465 million and that both VIP and PAP had reached "the conclusion that SCB is not a Creditor of IPTL"469 and had therefore decided to resolve their differences by VIP selling its 30% stake in IPTL to PAP without prejudice to VIP’s claim against SCB for more than USD 485 million.470
338.
The VIP-PAP- SPA also mentioned that-

(t) PAP has represented and warranted to VIP that it indirectly bought MECHM[A]R's Shares in IPTL from PIPER LINKS INVESTMENTS LIMITED as a bonafide purchaser since the year 2011 and that transaction was not only sanctioned but validated by MECHMAR; and SCBHK being cognizant of that fact, several times signed Agreements with PAP (copies of which PAP exhibited to VIP) attempting to sell to PAP for US$75.0million the debt which SCBHK purports that it is owed by IPTL.471

339.
The VIP-PAP-SPA however seems to acknowledge that the "rightful owner of MECHMAR'S 70% Shares in IPTL" still required to be resolved.472 The VIP-PAP-SPA was signed on behalf of PAP by Harbinder Singh Sethi as its Managing Director and Manraj Singh Bharya as its Director. The VIP-PAP-SPA was "[w]itnessed and [e]ndorsed" by the Mr Philip Saliboko, the Official Receiver and Provisional Liquidator of IPTL.473
340.
From the documents disclosed, the Tribunal notes that there were two documents that have traced PAP’s claim to the Mechmar Shares viz:

i. Agreement for Sale of Shares between Piper Link and Mr Sethi dated 21 October 2010;474 and

ii. Deed of Assignment of Shares between Piper Link and PAP dated 21 October 2011.475

341.
Mr Issa Al Rawahy signed both these documents on behalf of Piper Link even though an injunction against the sale by Mechmar of its IPTL shares to Piper Link was issued on 4 October 2010 by the Malaysian Court (High Court of Malaya)476 and the share certificates were said to have already been surrendered to the BVI Court and subsequently into the hands of SCB HK in April 2011 (see paragraphs 332 to 334 above) following the judgment having been granted against Mechmar.
342.
On any interpretation of these documents and the factual scenario surrounding their execution, Piper Link could have no title to the Mechmar Shares sold, transferred or assigned to PAP or Mr Sethi. That said, it could not be suggested that GoT was working in concert with Mr Sethi or PAP in the VIP-PAP-SPA. Standing alone, this transaction did not directly involve the GoT and could not be said to have committed any breach of Article 16 of the Implementation Agreement.

(iii) The Utamwa J Order477

343.
The Winding up Petition, Misc. Civil Cause No. 49 of 2002 brought by VIP against IPTL, came before Utamwa J on 3 and 5 September 2013 on the application made by VIP applying for a withdrawal of the petition seeking winding-up of IPTL in the following terms:

1. That this court marks the petition as duly withdrawn with no order as to costs.

2. That the appointment of the Provisional Liquidator be terminated.

3. That the Provisional L