UPDATE 1-S.African Court Impounds Tanzanian Plane in Compensation Case- Lawyer

(Updates with lawyer's comments)

By Fumbuka Ng'wanakilala and Emma Rumney

DAR ES SALAAM/JOHANNESBURG, Aug 24 (Reuters) - South African authorities impounded an Airbus 220-300 aircraft leased by Tanzania's national flag carrier following a court application by a retired farmer who is owed compensation by the Tanzanian government, the farmer's lawyer said.

The plane had been scheduled to fly from the Oliver Tambo International Airport in Johannesburg, South Africa, to Dar es Salaam, Tanzania on Friday, but was seized on an order issued by the Gauteng High Court in Johannesburg, Tanzania's transport ministry said in a statement on Friday.

Roger Wakefield, of Werksmans Attorneys, said his client, an elderly farmer who asked not to be named, was owed $33 million, including interest, in compensation from the Tanzanian government after his land in the country was expropriated several decades ago. The farmer was subsequently awarded the compensation in an arbitration, he said.

Wakefield said the only way Tanzania could secure the release of the plane was if it put up security or paid the debt.

A Tanzanian government spokesperson was not immediately available for comment.

Calls to the High Courts in Gauteng province went unanswered outside of usual business hours.

Speaking by phone to Reuters, Wakefield said the plane was impounded in line with South African and international laws allowing for an asset owned by a foreign entity to be attached to a case related to a foreign arbitration award.

The plane was chosen because there is evidence it is owned directly by the Tanzanian government and its value is commensurate with the amount owed to the farmer, who was born in Namibia, he said.

While the Tanzanian government has acknowledged it owes the farmer money, has previously made some payments and promised to pay the rest, it has not made a payment since around 2014, Wakefield said.

The plane is leased by loss-making state carrier Air Tanzania Company Limited (ATCL).

President John Magufuli has personally taken charge of the revival of the airline, spending hundreds of millions of dollars purchasing eight new planes since 2016.

The airline's existing fleet, which is leased from the state-run Tanzania Government Flight Agency (TGFA), includes one Boeing 787-8 Dreamliner, two Airbus A220-300 jets and three DHC Dash 8-400 aircraft, formerly known as the Bombardier Q400 turboprop.

ACTL managing director Ladislaus Matindi told Reuters earlier on Saturday that the impounded plane was an Airbus 220-300, and arrangements had been made for its passengers to use another plane for their planned flight.

Tanzania has pinned hopes on the revival of the national airline to turn the country into a regional transport hub and boost the tourism sector, its biggest foreign exchange earner.

In 2017, a Canadian construction firm seized one of Tanzania's new Q400 turbo-prop planes in Canada over a $38 million lawsuit related to a compensation ruling by the International Court of Arbitration.

The Q400 was released in March 2018 after Magufuli sent the country's prime minister and attorney general to Canada to negotiate its release. Aviation sources said the government reached a financial settlement to secure the aircraft.

(Reporting by Fumbuka Ng'wanakilala in Dar es Salaam and Emma Rumney in Johannesburg Writing by Hereward Holland and Emma Rumney Editing by Angus MacSwan and Frances Kerry)

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