VIP Engineering &Marketing Limited

Windhoek House,

Tel:

Mwai Kibaki Road,

Msasani Area,

Fax: +255 22 277 503 0

P. O. Box 70457,

E-Mail: info@vipem.co.tz
vipemltd2@gmail.com

Dar es Salaam, Tanzania

TIN:NO:100-103-478

+255 22 277 519 3

Mob: +255 784 760 884

Dar es Salaam, 9 June 2015

PRESS RELEASE

Standard Chartered Bank Hong Kong to use the English Court in an

attempt to outflank the Tanzanian Courts
in VIP-Standard Chartered Dispute

The High Court of England and Wales will hear claims by Standard Chartered Bank Hong
Kong Limited (SCBHK) even though its parent company, Standard Chartered Bank (SCB)
previously agreed in the US to the jurisdiction of Tanzania. The dispute is already being
heard by the High Court of Tanzania.
The lawsuit in England was served on VIP by SCBHK in April 2014. SCBHK served its English
lawsuit on VIP well after VIP started its litigation in Tanzania. Indeed, this suit in England
was commenced more than a decade after VIP sought to wind up the company at the
centre of the dispute, IPTL, and almost a decade after SCBHK purportedly bought the loan
(and security rights) it relies upon.
The Tanzanian High Court confirmed its jurisdiction on 6 June 2014. A trial in Tanzania is
imminent with a final pre-hearing conference set by the judge in Dar es Salaam for 22
June 2015, by consent of all the parties. VIP expects that the Tanzanian court will hear the
case and issue judgment before the end of 2015. VIP was unable to persuade

the High

Court of England and Wales, that the matter should be left to be exclusively determined by
the Tanzanian courts.
1

VIP management states that it regards as wholly inappropriate any attempt by SCB or
SCBHK

to circumvent the judicial proceedings in Tanzania by asking the English courts

to interfere with the proceedings and decisions of the Tanzanian courts. VIP's spokesman,
Mr James Rugemalira, explains:

Our dispute with Standard Chartered concerns a Tanzanian company. All facts in
dispute have taken place in Tanzania. The claims arose in Tanzania, and the damages
have been sustained in Tanzania. The Tanzanian courts have therefore the right,
recognised under international law, to exercise their full jurisdiction over the dispute.
The English court has not denied this. Moreover, the U.S. Court of Appeals in New
York has found that Standard Chartered has expressly consented to submit to
Tanzanian jurisdiction. Standard Chartereds suit in England is no more than another
attempt to intimidate the Tanzanian courts that are to investigate the bank's trade in
illegitimate debts. Standard Chartered already sought this before with the help of the
British High Commissioner in Tanzania. Standard Chartered is now attempting the
same through the English courts. VIP deplores this and will inform the Tanzanian
court and government as it considers its next steps.

Ends.
Find attached: Background to the dispute

Background to the Dispute

This dispute involves Independent Power Tanzania Limited (IPTL). VIP is suing because VIPs
partner in IPTL, Mechmar Corporation (Malaysia) Berhad (Mechmar), together with the
contractor who built the Tegeta plant and the banks that financed the construction,
conspired to freeze out VIP, inflate IPTLs debt and pay down their fraudulently inflated
debt ahead of IPTLs bank loan.

IPTL received around US$ 160 million from the state-owned Tanzanian Electric Supply
Company (TANESCO) between 2002 and 2006 to repay IPTL's US$ 84 million bank loan.
When VIP objected to IPTL using those funds to pay unjustified costs and debts Mechmar
had booked in IPTL without VIPs consent, Mechmar and IPTLs lender ignored VIPs
corporate and contractual rights in IPTL and took de facto control over IPTL affairs,
including all IPTL funds.

Mechmar then agreedwithout VIPs knowledge or consentto restructuring IPTLs bank

debt. Effectively, Mechmar and the Dutch constructor of the plant, Wrtsil Netherlands B.V.
(Wartsila), took the money paid by TANESCO that was intended to pay off IPTLs bank
debt. This was done with the consent of the lender who then sold the loan as though it
had not been repaid.

Whilst IPTL was being subject to public court proceedings aimed at investigating this fraud,
SCBHK allegedly purchased the restructured loan in 2005 and started to harass the
Tanzanian government claiming that IPTL had not repaid the loan. SCB and SCBHK's actions
caused irreparable damage and losses to IPTL, to Tanzania and to VIP.

VIP commenced proceedings in June 2013 in New York, demanding damages of about US$
485 million from SCB for its role in looting IPTLs money and converting IPTL and VIP
property through a money laundering scheme. At the bank's own request, the New York
courts referred the lawsuit to the courts of Tanzania in September 2013. VIP then sued SCB
and SCBHK together with Wartsila and Mechmar in Tanzania in November 2013. The
Tanzanian court confirmed its jurisdiction in 2014 and a trial is expected in 2015.

In response to VIP's lawsuit, SCBHK served a lawsuit on IPTL and VIP in 2014 in England.
SCBHK is asking the English court to make a declaration that could have the effect of preempting or conflicting with any Tanzanian judgment in VIP's case. Standard Chartered Bank
is claiming more than US$ 200 million from IPTL and from its alleged guarantors VIP,
TANESCO and the United Republic of Tanzania. The original loan was around US$ 84
million and the bank admits that around US$ 60 million was already received. It is presently
unknown when the English court will hear the case.

VIP will be seeking advice from its team of Local and International Legal Advisors the next
appropriate action, if any, that it should consider taking under the circumstances, but VIP
continues to believe very strongly that the High Court of Justice in London should have at
least stayed the English proceedings pending determination of the Tanzania proceedings
that were commenced ahead of the English Proceedings.