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Author: Business & Human Rights Resource Centre, Published on: 18 February 2014
In August 2005, Biwater Gauff (Tanzania) Ltd. (BGT), a private water company, filed a request for arbitration with the International Centre for Settlement of Investment Disputes (ICSID) regarding a contractual dispute with the United Republic of Tanzania. The dispute arises out of agreements entered into by BGT and Tanzania for the operation and management of the Dar es Salaam water system. In May of 2005, Tanzania terminated the contract with BGT for its alleged failure to meet certain performance guarantees set forth in the agreements. BGT brought the case before the ICSID stating that Tanzania’s termination had breached their agreements and resulted in an illegal expropriation of BGT’s investment.
Tanzania launched the project to overhaul the water and sewerage infrastructure of Dar es Salaam with funding from the World Bank. To receive this funding, Tanzania was required to award this work to a private contractor. In 2003 the project was awarded to BGT. BGT is a joint venture created by Biwater International Limited and HP Gauff Ingenieure GmbH & Co. for the purposes of the Tanzanian project; Biwater owns 80% of BGT and Gauff owns 20%.
The proceedings of this arbitration have been kept confidential, and the details of the parties’ legal arguments are not available to the general public. However, ICSID granted a group of interested parties (Tanzanian and international NGOs) permission to file an amicus curiae brief in support of the Tanzanian Government. This amicus brief was filed in March 2007; its full text is available via a link below. The brief argues that BGT’s acts and omissions caused its investment to fail and that investors in the water sector have a heightened level of responsibility because the success of a business venture in this area has a direct impact on the achievement of an essential human right - the right to clean and safe water. The brief further argues that taking into consideration human rights and sustainable development, termination of the contract by a government, if done in good faith to prevent the worsening or abuse of human rights, should not be found to be a contractual breach, especially when a contract’s purpose was to promote and enhance the achievement of such rights.
On 24 July 2008, the arbitral tribunal issued its final decision in this case. The tribunal declared that the Tanzanian Government had violated the terms of its bilateral investment treaty with the UK. However, the tribunal declined to award BGT the monetary damages requested.
- Water: Campaigners cheer defeat of Biwater's £10m Tanzanian claim, Xan Rice, Guardian [UK], 29 Jul 2008
- The Water Margin, Xan Rice, Guardian [UK], 16 Aug 2007
- Flagship water privatisation fails in Tanzania, John Vidal, Guardian [UK], 25 May 2005
- [PDF] Bricks without Straw: the Confidentiality Order in Biwater Gauff, James Chalker, Sustainable Development Legal Assistance, Mar 2007
- Biwater: Biwater Response to Outcome of ICSID Arbitration, 28 Jul 2008
- Biwater: Statement About Biwater Gauff Tanzania, 1 Dec 2005
- World Bank: [PDF] Dar Es Salaam Water Supply and Sanitation Project - proposed amendments to legal agreements 17 Feb 2006
- World Bank: [PDF] Tanzania - Dar es Salaam Water Supply and Sanitation Project, 4 Feb 2003
Biwater Gauff (Tanzania) Limited and United Republic of Tanzania [ICSID proceeding]
- [PDF] Amicus Curiae Submission by Lawyers’ Environmental Action Team, Legal and Human Rights Centre, Tanzania Gender Networking Programme, Center for International Environmental Law, and International Institute for Sustainable Development, 26 Mar 2007
- ICSID: [PDF] Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania - Award, 24 Jul 2008 [final decision of arbitral tribunal declaring that Tanzania had violated the terms of its bilateral investment treaty with UK but declining to award monetary damages to BGT]
- ICSID: [PDF] Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania - Concurring and Dissenting Opinion, 24 Jul 2008
- ICSID: [PDF] Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania - Procedural Order No. 5, 2 Feb 2007 [granting amicus curie status to Lawyers’ Environmental Action Team, Legal and Human Rights Centre, Tanzania Gender Networking Programme, Center for International Environmental Law and International Institute for Sustainable Development]
- ICSID: [PDF] Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania - Procedural Order No. 3, 29 Sep 2006 [imposing certain confidentiality requirements on the parties]
- ICSID: [PDF] Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania - Procedural Order No. 1, 31 March 2006 [partially granting BGT’s request for provisional measures to preserve its rights with regard to certain bank accounts, assets and documents]