DUBAI-based Rental Solutions and Services LLC (RSS) has filed a suit against Symbion Tanzania Limited, demanding, among others, payment of a total of 228,070,655.67 US dollars (over 560bn/-), being compensation and total outstanding amount of rental charges for its power generators.
According to the plaint originating from the suit filed in the High Court in Dar es Salaam last week, the 28,070,655.67 US dollars is an outstanding amount rental charges while the 200 million US dollars is compensation for the loss RSS, the plaintiff, allegedly suffered.
The plaintiff has also sued the Tanzania Electric Supply Company (TANESCO), the state owned electric supply company, as necessary party who will be affected by the grant of the orders sought by the Plaintiff herein, if any.
RSS is, thus, seeking for an order, directing TANESCO to deduct from the outstanding receivables TANESCO owes Symbion and remit the same directly to RSS for settlement of the total liability.
The demanded charges arise from the supply, installation, commissioning and operation of power generating equipments (Power Plants), which RSS rented to Symbion Tanzania Limited (Symbion) towards the Tanzania-TANESCO project for the generation and supply of electric power to the National Grid.
In the suit, the plaintiff seeks a declaration that failure by Symbion, the first defendant, to pay the rental charges as per the terms agreed upon by the parties, constituted fundamental breach of the contractual terms and hence was unlawful and unwarranted.
The plaintiff further sues Symbion for an order directing the latter to indemnify him against all claims by third parties connected with and incidental to the failure or stoppage of payments of the agreed rental charges.
He also seeks specific and general damages, interests and costs of the suit. It is alleged that from September 2011 to June 2013, the plaintiff entered into various rental agreements and extensions thereof, with Symbion for the supply, installation, commissioning and operation of power generating equipments for its project to supply power to the national grid.
On September 21, 2011, the plaintiff allegedly entered into an Independent Power Plant (“IPP”) Rental Agreement with Symbion, the 1st Defendant, for the supply, installation, commissioning and operation of power generating equipments of 50 MW at 33kV at TANESCO’s Zuzu substation in Dodoma.
The plaintiff claims that such IPP was on a monthly rental charges worth 1, 374, 500 US dollars and that the agreement was for a minimum duration of six months.
The total rental amount, which was supposed to be paid by Symbion in respect of the agreement for such period, was 8,247,000 US dollars. It is claimed in the plaint that the plaintiff out-rightly performed its obligation as conditioned in the scope of supply of the agreement.
“Invoices for the amount claimed were raised monthly pursuant to the terms of the agreement whereby the defendant was required to effect payments within 30 days from the day invoices were issued,” states a paragraph in the plaint of the suit.
On February 12, 2012, the plaintiff entered into an agreement for the supply, installation, commissioning and operation of power generating equipments of 55MW at 33kV on a rental basis for duration of 12 months worth 1,666, 000 US dollars per month.
Such transaction was to be carried out at the 2nd Respondent’s Emergence Power Project sites located in Arusha and Dodoma, whereby power plants with 50 MW were to be installed at Arusha and 5MW at Dodoma sites.
It is stated that on additional agreement, parties agreed that, invoices should be presented by the plaintiff at the end of each month and thereafter payment to be settled by the first defendant within 30 days.
The plaintiff out-rightly allegedly complied and presented the invoices accordingly. According to the plaint of the suit, there were other extensions of contracts for continued use of the supplied and installed power plants in Dodoma and Arusha stations whereupon Rental Solutions performed its obligations and issued the invoices to Symbion for payments of the rental charges.
“Despite the plaintiff having had out-rightly performed all obligations as per the agreements and issuing the invoices as conditioned in the scope of supply therein, out of the total outstanding sum of 77,667,666.28 US dollars, Symbion has only paid the plaintiff 49,597,010.61 USD.
“To this day, without any justifiable reason, the first defendant has deliberately defaulted to honour the agreements and neglected to pay an outstanding amount of 28,070,655.67 USD,” claimed Rental Solutions and Services LLC.
It is stated further that due to Symbion’s default or stoppage of and remit the same, the plaintiff suffered huge loss of profit for failure to utilize the outstanding amount which was obtainable from the rental payments and ought to be paid by the first defendant for agreed period.
The plaintiff entered into several contracts with various third party companies for hire of the power generation equipments to distribute to the defendant on promise that Symbion would timely settle the rental charges upon being paid by Tanesco.
