News Brief

Wallace and Grove Obtain International Arbitrator’s Award for Tanzanian Hotel Client

January 28, 2020

Robert Wallace (Senior Counsel-Washington, DC) and Callyson Grove (Associate-Washington, DC) received an arbitrator’s award on behalf of a Tanzanian corporation that owns and operates a hotel in Arusha, Tanzania. The plaintiff was hired by the prior owner of the hotel to do renovations, and was not paid. Plaintiff later contracted with our client for the “wet works” of the hotel renovation project only, including activities such as concrete or masonry work and fitting interiors. Plaintiff filed a claim for more than $6 million against our client that included work done for the prior owner, arguing our client assumed responsibility for the earlier agreements, as well as under the wet works contract. After a four-day hearing under UNCITRAL Rules and Tanzanian law in Dar es Salaam, Tanzania, in March 2019, the arbitrator issued a 145-page award. He found plaintiff’s claims to be without merit and dismissed them with costs. He also found that the plaintiff breached the contract by refusing to leave the site after terminating the contract, which prevented the contractor our client hired to replace plaintiff from getting started. The arbitrator found that by holding the site “hostage,” the plaintiff ultimately delayed completion of the hotel renovations by three months. The award included damages for the costs of delay in construction, with interest, as well as for overpayment for work done and the costs of the counterclaim. The total award, without costs, is approximately $1.2 million.

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