The Federal Court of Australia has confirmed Swala’s obligation to pay Otto Energy (Tanzania) Pty Ltd the sum of $800,000 agreed under the Pangani Settlement Agreement in May 2017
Under the settlement of the claims and counter-claims concerning the Pangani Licence Swala agreed to pay to Otto a net sum of US$800,000 on or before the 31st August 2017 in return of discontinuation of the proceeding, including that against current and former directors of both Swala and Swala Energy Limited.
“The settlement has been reached on commercial grounds and does not represent an admission of liability by either party,” Swala said in a statement in May 2017.
Following the confirmation by the court Swala says Otto must now register the debt in Tanzania before a further hearing is scheduled to address the matter in the Tanzanian courts. The Dar listed company adds it expects that it shall by that stage have secured all necessary approvals authorizing the transaction, including those of the Tanzania Revenue Authority in respect of the three agreements entered into by Swala and Otto as advised to the market on the 29th May 2017.
During the first half of the year the company lost the Pangani license after expiry of the license after the end of the first extension without all commitments fulfilled.
In respect of the various disputes between OET and Swala in relation to the Kilosa-Kilombero Licence, the parties in May agreed upon Otto’s withdrawal from the JOA and that Otto shall pay third-party creditors a total sum of US$249,016. Swala has since assumed the rights and obligations in respect of OET’s 50% participating interest.
It remains unclear as to whether Swala is in a financial position to pay the settlement given its inability to raise funds in the past amid commitments amounting to $8.6 million for its Tanzanian licenses.