South African authorities impounded an Airbus 220-300 aircraft leased by Tanzania’s national flag carrier following a court application by a retired farmer owed compensation by the Tanzanian government, the farmer’s lawyer said.
The plane was scheduled to fly from Oliver Tambo International Airport to Dar es Salaam, Tanzania on Friday, but was seized on an order issued by the Gauteng High Court in Johannesburg, Tanzania’s transport ministry said in a statement.
Roger Wakefield, of Werksmans Attorneys, said his client, an elderly farmer who asked not to be named, was owed $33 million, including interest, in compensation from the Tanzanian government after his land was expropriated decades ago. The farmer was subsequently awarded compensation in arbitration, he said.
Wakefield said the only way Tanzania could secure the release of the aircraft was if it put up security or settled the debt.
A Tanzanian government spokesperson was not immediately available for comment.
Speaking by phone to Reuters, Wakefield said the aircraft was impounded in line with South African and international laws allowing for an asset owned by a foreign entity to be attached to a case related to a foreign arbitration award.
The plane was chosen because of evidence it is owned directly by the Tanzanian government and its value is commensurate with the amount owed he said.
The Tanzanian government acknowledged it owes the farmer money, it previously made payments and promised to pay the balance, but has not made a payment since 2014, Wakefield said.
The aircraft is leased by loss-making state carrier Air Tanzania Company Limited (ATCL).
President John Magufuli personally took charge of reviving the airline, spending hundreds of millions of dollars purchasing eight new aircraft since 2016.
The airline’s existing fleet, leased from the state-run Tanzania Government Flight Agency (TGFA), includes a Boeing 787-8 Dreamliner, two Airbus A220-300s and three DHC Dash 8-400 aircraft, formerly Bombardier Q400 turboprops.
ACTL managing director Ladislaus Matindi told Reuters the impounded aircraft was an Airbus 220-300 and arrangements were made for passengers to use another aircraft.
Tanzania pinned hopes on revival of the national airline to turn the country into a regional transport hub and boost tourism, its biggest foreign exchange earner.
In 2017, a Canadian construction firm seized one of Tanzania’s Q400 turbo-props in Canada over a $38 million lawsuit related to a compensation ruling by the International Court of Arbitration.
The aircraft was released in March 2018 after Magufuli sent the country’s prime minister and attorney general to Canada to negotiate its release. Aviation sources said government reached a financial settlement.