TANZANIA: COURT OF APPEAL AWARDS USD 8M COSTS TO IPTL, PAP IN USD 168M DISPUTE AGAINST STANDARD CHARTERED

By Prosper Makene

The Court of Appeal of Tanzania has awarded USD 8,000,000 in legal costs to Independent Power Tanzania Limited - IPTL and Pan Africa Power Solutions (T) Limited, following their successful opposition to an appeal by Standard Chartered Bank over a long-running USD 168,000,000 commercial dispute.

The ruling was delivered on August 5, 2026 by the Court of Appeal’s Deputy Registrar and Taxing Officer, J.E. Fovo, in Taxation No. 65 of 2026, arising from Civil Appeal No. 386 of 2022. The applicants were represented by Advocate Musa Mhagama, while the respondents were represented by Advocate Deogratias Tesha.

This latest decision closes another chapter in a case that has dragged on for more than a decade and has involved courts in Tanzania, the United Kingdom, and Malaysia. The core of the dispute relates to power generation agreements signed in the late 1990s and early 2000s, and subsequent financing arrangements that led to arbitration and litigation abroad.

The dispute originates from a foreign judgment issued by the High Court of England, Commercial Division, with a decretal amount of USD 168,000,000. The judgment was in favor of Standard Chartered Bank (Hong Kong) Limited and Standard Chartered Bank Malaysia Berhad against IPTL and Pan Africa Power.

The banks later sought to register and enforce that foreign judgment in Tanzania. However, IPTL and Pan Africa Power raised a preliminary objection challenging the competence of the appeal and the process of enforcement.

On January 9, 2026, the Court of Appeal delivered a landmark ruling and struck out the appeal. The court found that the appeal as filed was incompetent and could not proceed. That victory paved the way for the applicants to claim costs for successfully defending the case at that stage.

Legal analysts say the January ruling was significant because it clarified how foreign judgments should be handled in Tanzania and reinforced the need for strict compliance with procedural requirements under Tanzanian law.

Following the success, the applicants filed a bill of costs dated January 29, 2026, claiming USD 10,287,550 for successfully opposing the appeal.

The bill contained two major contentious items: instruction fees of USD 5,040,000 claimed separately by each applicant, totaling USD 10,080,000. The applicants argued that the amount reflected the complexity, the amount at stake, and the international nature of the dispute.

Other items amounting to TZS 210,000 covering filing fees, service, and disbursements were agreed upon by both parties and were not contested during taxation.

Counsel for the respondents opposed the instruction fees on two main grounds. First, he argued that the appeal had no ascertainable sum of money, as it sought to set aside the registration and enforcement of a foreign judgment. Therefore, he said, the fees should be assessed at the lower scale. Second, he contended that separate instruction fees should not have been charged for the two applicants, since they were represented by the same advocate and filed joint submissions.

In his detailed ruling, Deputy Registrar and Taxing Officer J.E. Fovo dismissed the objection based on Item 17 of the Third Schedule to the Court of Appeal Rules, 2009. He held that no separate proceedings were instituted by each applicant.

However, he further noted that each applicant had separate liability under the USD 168 million award. Because of that separate exposure, the court found they were entitled to separate representation and therefore separate instruction fees were justified.

On the quantum of instruction fees, the Officer found the claimed amount of USD 5,040,000 per applicant to be excessive and unreasonable. He observed that although the amount at stake was huge, the appeal was disposed of at the preliminary stage without full arguments on the merits.

He also found the TZS 5,000,000 proposed by the respondent to be too low given the stakes, the complexity, and the need to engage senior counsel.

Applying the principles of reasonableness, complexity, importance to the parties, and consistency as set out in authorities including Tanzania Rent A Car Ltd v Peter Kimuhu and Kitinda Kimaro v Anthony Ngoo, the court determined that a reasonable instruction fee was USD 4,000,000 for each applicant.

The Taxing Officer therefore taxed the costs as follows: USD 8,000,000 in respect of instruction fees for both applicants, and TZS 210,000 in respect of the uncontested items.

He concluded that the taxed costs were reasonable, fair, and consistent with previous awards of the court in matters of similar magnitude. He ordered that the taxed bill be filed accordingly and that payment be effected.

Reaction from Independent Power Tanzania Limited

IPTL Executive Chairman Harbinder Singh Sethi said the USD 8 million costs award will help the companies recover part of the resources spent in defending the case. He said the funds will be channeled back into operations to improve power generation and service delivery.

What This Means for Business in Tanzania

Lawyers and business commentators say the ruling provides clarity on two key issues: taxation of costs in high-value commercial cases, and the treatment of foreign judgments.

First, the court has set a benchmark that even when a case is lost at a preliminary stage, costs can still be substantial if the amount involved is large and the legal work required was complex.

Second, the decision reinforces that foreign judgments cannot be enforced in Tanzania automatically. Parties must follow local rules and be prepared to face challenges on competence and jurisdiction.

For the energy sector, the ruling removes some legal uncertainty around IPTL and Pan Africa Power, allowing management to focus on operations rather than litigation.

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