The High Court of Tanzania is scheduled to determine the fate of the East African Development Bank in the next two months, hopefully bringing to an end the prolonged legal battle between the lender and Blueline Enterprises Ltd.

Judge Augustine Shangwa of the High Court at Dar es Salaam will deliver his ruling in February on whether or not to stay his order for attaching the bank’s building over a $137.9 million award slapped on the Bank last month.

The dispute has deepened the diplomatic and legal crisis that East African Community states are facing over the Tanzanian High Court’s decision allowing auctioneers to seize the assets of EADB last month. (READ: EADB will have to quit Tanzania once $137m award is enforced)

The core legal issue for member states is the decision by Tanzania’s Court of Appeal to disregard a key component of the EAC Treaty that protects the assets of EADB from attachment. Tanzania finds itself in an awkward diplomatic situation as technocrats struggle to unravel the crisis.

Two weeks ago, leaders of the EAC partner states — who are the major shareholders of the bank — meeting in Bunjumbura had advised EADB to appeal against the court order. Judge Shangwa had on November 8, issued the order.

The court brokers served the order on the EADB’s Resident manager, Jackson Andulile Mwakalyeye, who further sought legal services of two counsels, Dilip Kesaria and Mabere Marando.

The counsels presented their submissions before the said judge for him to set aside his order due to the Bank not having been given an opportunity to defend itself prior to issuing the order for execution.

They further told the judge that the Bank had an appeal still pending before the Court of Appeal of Tanzania.

The legal wrangle between the parties started when Blueline defaulted on an outstanding loan and interest amounting to $1,527,358.38.

This led the bank to appoint a receiver manager to take over Blueline’s business without referring the matter to court. It was the bank’s action of appointing a receiver manager that led Blueline’s managing director John Dullips Lamba to file a petition in the High Court to get an exparte order issued by Judge Simon Kaji on December 4, 1995, restraining the bank and its agents from taking over and running the business until determination of the matter interparties.

In pursuit of the matter interparties, the counsels presented their submissions before Judge Eustace Katiti. It was before him that the issue of the Bank’s immunity arose for the first time.

Judge Katiti had accordingly stated that on March 7, 1990, BEL to have secured from the EADB money in various currencies, to the tune of Special Drawing Rights (SDRs) 1,924,006.00. The company further obtained SDRs 206,523.35 by March 22, 1992.

The judge further stated that the EADB was established under the 1980 Treaty duly signed by the governments of Tanzania, Kenya and Uganda, to the extent that in Tanzania, it was given legal force and legal life under the East African Development Bank Act No. 7 of 1984 with effect from June 18, 1984.

Similarly, Judge Katiti observed that it was equally an uncontrovertibly fact, that under Section 13 of the Diplomatic and Counselor Immunities and, Privileges Act NO. 5 OF 1986, AND Fourth Schedule thereto, as well as G.N. No. 25 of 1988, that the EADB would be enjoying immunities.

He however noted that the controversy, to all intents and purposes, had been ranging around Acts No. 7 of 1984 and No. 5 of 1986, also the latter statute, wherein the bank has been seeking shelter, and sheath, whilst the BEL did indeed not want to countenance.

“And I am invited to play Judicial acrobatics, or surgery to see where justice reigns,” narrated Judge Katiti at arriving to a verdict of waiving the immunity to the bank in 1996.