The Republic of Tanzania has reached a settlement agreement worth USD 30 million with Winshear Gold Corp. This after a dispute concerning the Canadian company’s mining project in southwest Tanzania.
Richard Williams, the CEO of Winshear Gold, expressed his satisfaction with the resolution, stating, “This settlement is good for both Tanzania and Winshear, and we are pleased to reach a mutually acceptable conclusion to this matter,” He further added “It is time for both Parties to move on, and we wish Tanzania success in attracting new investment. The Company sincerely thanks our legal team, Lalive, for their work in preparing and presenting our case,”
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The development comes barely a month since the parties suspended arbitration proceedings and reached a conditional settlement agreement.
All this follows an evidentiary hearing which commenced on February 13, 2023, in Washington D.C., where Winshear, filed a lawsuit against the government of Tanzania over the cancellation of its licenses to operate the SMP Gold Project, located in southwest Tanzania.
The company sued after Tanzania cancelled the company’s licenses immediately after its amendment of the Mining Act of 2010.
Subsequently, the government stripped Winshear of its ownership of the SMP Project, leading the company to assert that Tanzania had breached its obligations under the Canada-Tanzania Bilateral Investment Treaty (BIT) and international law.
These obligations encompassed Tanzania’s commitment not to nationalize or expropriate Winshear’s investments, nor subject them to measures akin to nationalization or expropriation without providing prompt, adequate, and effective compensation under the BIT.
Additionally, Tanzania was obligated to afford fair and equitable treatment, as well as complete protection and security to Winshear’s investment, refraining from impairing the maintenance, use, enjoyment, or disposal of the company’s investment through unreasonable or discriminatory measures under the BIT.
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The ruling done under The International Centre for Settlement of Investment Disputes (ICSID) convention is legally binding for all of the 158 states including Tanazania that have ratified the agreement.
After payment of funding and legal costs the Canadian company will be left with USD 18.5 million which the company says it plans to reinvest back into its business.
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