Zanzibar to pay Thai company $69m for rice bought in 1988

A court has ordered the government of Zanzibar to pay a Thai company $69 million (about TSh159 billion) for rice bought in 1988.

If Zanzibar had settled the payment in time, it would have paid $12.9 million (about TSh30 billion) 37 years ago.

The Court of Appeal recently quashed a highly questionable ruling of the Registrar of the High Court of Zanzibar who had reduced the bill in 2017 to $5.7 million (about TSh13.1 billion).

Three justices of appeal, Stella Mugasha, Ignas Kitusi and Sam Rumanyika could not hide their displeasure over the three-decade delay in paying Laemthong Rice Co. Ltd, which supplied rice to the Zanzibar government.

“This matter does not speak very well of timely justice,” said the justices in their recent decision.

The Court of Appeal also rejected the government’s attempts to lower the amount and insisted they go by a December 2000 High Court order for the Zanzibar government to pay the rice supplier $69 million.

Aware of the case

Zanzibar Minister of State in the President’s Office responsible for Finance and Planning, Saada Salum Mkuya, admitted she was aware of the case but could not give the ministry’s position because she has not seen the judgment.

“I know about the issue but I have not seen that judgment, so I cannot say anything,” said the minister.

The transaction of what would later turn to be one of the longest delayed cases was made on July 23, 1985 when the Zanzibar government ordered for 39,900 tonnes of rice at $12.9 million, with a 25 percent annual interest.

According to court records, it took quite a long time for the Zanzibar government to fulfil its contractual obligation as it delayed to make full payment for the rice.

Left with no option, the Bangkok-based company sued the Zanzibar government in efforts to have the authorities settle the debt.

The reason the dispute dragged in courts for many years was because of the Zanzibar government’s refusal to pay the $69 million and wanted it reduced to $45.7 million.

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There were also issues on how the execution should be carried out.