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Canadian-based gold exploration company Winshear Gold Corp and the government of Tanzania have reached a settlement agreement in relation to the dispute regarding the company’s SMP Gold Project in southwest Tanzania. Both parties have agreed on an amount of USD30 mn equivalent to Sh75 billion, to settle the case and terminate the arbitration proceedings.
Canadian-based gold exploration company Winshear Gold Corp and the government of Tanzania have reached a settlement agreement in relation to the dispute regarding the company’s SMP Gold Project in southwest Tanzania. Both parties have agreed on an amount of USD30 mn to settle the case and terminate the arbitration proceedings.
The Tanzanian government paid USD 18.5 mn to the company on Monday (16 October 2023) after deducting the legal costs. The dispute occurred due to the cancellation of a mining licence held by Winshear in a manner that violated investment treaties and international law. Monday’s development comes barely a month since the parties suspended arbitration proceedings and reached a conditional settlement agreement.
The company sued Tanzania over the decision by the latter to cancel the licenses of the former, which was operating the SMP Gold Project, located in southwest Tanzania. Winshear’s licenses were cancelled immediately after the government amended the Mining Act 2010, whose regulations subsequently cancelled all Retention Licences.
According to Winshear Tanzania breached its obligations to the company under the Canada-Tanzania Bilateral Investment Treaty (BIT) and international law. Some of these include Tanzania’s obligation not to nationalise or expropriate the company’s investments or subject them to measures having an effect equivalent to nationalisation or expropriation without prompt, adequate, and effective compensation under the BIT.
Another is Tanzania’s obligation to accord fair and equitable treatment and full protection and security to the company’s investment and not to impair by unreasonable or discriminatory measures the maintenance, use, enjoyment, or disposal of the company’s investment under the BIT.
The evidentiary hearing between Winshear Gold Corp and the government of Tanzania commenced on February 13, 2023, in Washington D.C., where a three-person tribunal panel presided over the court hearings, which were expected to conclude on or before the close of business on Friday, February 17, 2023.
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The International Centre for Settlement of Investment Disputes (ICSID) Convention has been ratified by 158 States, including Tanzania. An award issued by an ICSID tribunal is enforceable in any of those 158 member States as if it were a judgment of one of their own courts.
