Canadian firm Winshear Gold Corp has announced the suspension of its multimillion-dollar arbitration proceedings against Tanzania over a mining licence dispute dating back to 2018, saying it had reached a “conditional settlement agreement” with Dodoma.
But, in a September 19 statement, the company cautioned that there was “no guarantee that the conditional settlement agreement will be concluded” and said it would report further developments “as they occur.”
Winshear has been claiming at least $96 million worth of damages through the International Court for the Settlement of Investment Disputes (ICSID) for the revocation of its SMP Gold Project licence in southwestern Tanzania by the John Magufuli administration.
The ICSID confirmed on its website that the case had been suspended “pursuant to the parties’ agreement, but no further details of the pact were immediately available from any of the parties involved.
The tribunal concluded formal hearing of the case in February and a final verdict was expected before year-end.
Winshear is one of three foreign companies seeking compensation from Tanzania via the ICSID for similar mining license expropriations during the Magufuli era under new mining laws that cancelled all retention licenses.
The tribunal in July ordered Tanzania to pay another firm, Australia’s Indiana Resources, more than$110 million in damages, an award that Tanzania has since applied for annulment.
While the ICSID has already named members of a new ad hoc committee to hear the application for annulment, a hearing date has yet to be set.
Other companies currently pressing cases against Tanzania at the ICSID are Canada’s Montero and Britain’s Pennyroyal. Montero is claiming $67 million in compensation for the license revocation of its Wigu Hill Rare Earth Element project in Morogoro region.
Legal experts say Tanzania has an uphill battle to avoid paying upwards of $300 million in total as ICSID penalties for contractual breaches against foreign investors unless the government reaches out-of-court settlements with all the litigators.
Pennyroyal filed its case shortly after the Indiana Resources ruling in July this year, seeking unspecified damages due to its title deed for land designated for a luxury leisure and residential housing project in Zanzibar being terminated by the Zanzibar government in July 2022.
The real estate development firm said it had already invested $55 million in the project, which is now at a standstill.
Legal experts say Tanzania is facing an uphill battle to avoid paying upwards of $300 million in total as ICSID penalties for contractual breaches against foreign investors unless the government can reach out-of-court settlements with all the current litigators.
Winshear CEO Richard Williams said after the Indiana Resources ruling in July that the award had boosted its own chances of eventual success ahead of the final verdict on its own case.
“It is reassuring that the ICSID tribunal in the Indiana case recognised the damage done to the company, its shareholders and investors when the Tanzanian government decided to abolish retention licenses without consulting the investor community,” Williams said.