International Arbitration 2024 Comparisons

In recent years, Tanzania has made significant strides in promoting alternative dispute resolution (ADR) methods such as arbitration, mediation and negotiation. Many commercial contracts in Tanzania now include dispute resolution clauses that mandate some form of ADR before resorting to court litigation.

The Arbitration Act (CAP 15 RE 2020) (the “Arbitration Act”), which replaced the Arbitration Act of 1931 inherited from British rule, is a testament to these efforts. For a long time, the National Construction Council (NCC) and the Tanzania Institute of Arbitrators (TIArb) have been the principal arbitral bodies in Tanzania. However, in 2021, the establishment of the Tanzania International Arbitration Centre (TIAC) marked a significant development, providing a dedicated forum for facilitating international commercial arbitration.

Additionally, the Arbitration Act mandates the creation of the Tanzania Arbitration Centre (the “Centre”) as the statutory regulatory body for both domestic and international arbitration. It is important to note, however, that the Centre is not yet operational.

In practice, domestic arbitration remains the most common form of arbitration in Tanzania, with international arbitration proceedings seated in Tanzania being relatively rare.

Key industries which have historically seen significant activity in international arbitration in Tanzania include construction, telecommunications, finance and mining. Government/investor contracts have also been the subject of international arbitration. 

Given the lack of published statistics, it is difficult to ascertain arbitral trends and activities in Tanzania.

Tanzania currently has three arbitration institutions, namely, the National Construction Council (NCC), the Tanzania Institute of Arbitrators (TIArb) and the recently established Tanzania International Arbitration Centre (TIAC). 

Additionally, the Arbitration Act provides for the establishment of the Tanzania Arbitration Centre (the “Centre”), which is likely to commence operations soon.

Tanzanian courts are, at present, only vested with supervisory authority over arbitration proceedings and the ability to enforce arbitral awards. 

In Tanzania, arbitration proceedings are governed by the Arbitration Act, and the Arbitration (Rules of Procedure) Regulations, 2021 (the “Rules of Procedure”).

The Arbitration Act is based on the UK Arbitration Act, 1996 and not on the UNCITRAL Model Law.

There were no changes to Tanzanian arbitration laws in 2023/2024. There does not appear to be any pending legislation designed to change laws governing arbitration in Tanzania.

According to the Arbitration Act, for an arbitration agreement to be enforceable, it must be in writing. An agreement is deemed to be in writing where:

• the agreement is in writing, whether or not it is signed by the parties;
• the agreement is made by exchange of communications in writing; or
• the agreement is evidenced in writing.

Under Section 10(4) of the Arbitration Act, it is possible for a contract to incorporate by reference an arbitration agreement that is contained in a separate document.

Arbitration arises from the mutual agreement of the parties as outlined in an arbitration agreement. Under the Arbitration Act, an arbitration agreement is defined as an agreement by the parties to submit to arbitration all or certain disputes that have arisen or may arise between them in respect of a defined legal relationship, whether contractual or not.

Despite this broad definition, which theoretically permits the reference of disputes to arbitration even in the absence of a contractual relationship, in practice, the courts will only enforce an arbitration agreement if it is embedded in a contract between the parties.

In the case of Tanzania Motor Services Ltd & Others v Mehar Singh t/a Thaker Singh (Civil Appeal 115 of 2005) [2006] TZCA 5 (21 July 2006), the Court of Appeal stated the following concerning arbitration clauses:

“I venture to think that not enough attention has been directed to the true nature and function of an arbitration clause in a contract. It is quite distinct from other clauses. The other clauses set out the obligations which the parties undertake towards each other but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement of both parties that if any dispute arises with regard to the obligation which the one party has undertaken to the other, such dispute shall be settled by a tribunal of their own constitution. And there is this very material difference, that whereas in an ordinary contract the obligation of the parties to each other cannot in general be specifically enforced and breach of [the obligation] results only in damages, the arbitration clause can be specifically enforced by the machinery of the Arbitration Acts. The appropriate remedy for breach of the agreement to arbitrate is not damages, but is enforcement.”

The Arbitration Act explicitly provides that an arbitral award is final and binding upon the parties involved. Consequently, national courts in Tanzania have been reluctant to interfere with the enforcement of an arbitral award, provided it complies with the provisions of the Arbitration Act. Judicial intervention is limited to instances of serious irregularity or questions of substantive jurisdiction, both of which have clearly defined scopes for any challenges.

The courts’ willingness to enforce the arbitration agreement is best seen in winding-up proceedings, where the High Court has exclusive jurisdiction over such proceedings. When a company faces winding-up proceedings for failing to pay a debt under a contract that includes an arbitration clause, the courts have consistently ruled that the dispute must first be arbitrated if the underlying debt is bona fide disputed. Should the creditor prevail in arbitration and the debtor still fails to settle the debt, the creditor may then seek the remedy of winding-up.

Pursuant to Section 12 of the Arbitration Act, an arbitration agreement is treated as a distinct agreement separate from the main agreement. Unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement, regardless of whether it is in writing, will not be regarded as invalid or non-existent because the rest of the agreement is invalid or has become ineffective.

However, where the dispute revolves around the parties’ capacity to contract, the arbitration agreement will be rendered void if the parties lacked the requisite capacity to make the agreement in the first place. 

The Arbitration Act gives the parties broad autonomy to agree on the procedure for appointing arbitrators. The arbitration agreement allows the parties to agree on:

• the procedure to be followed for the constitution of the tribunal;
• the number of arbitrators (including whether there is an umpire or chairperson); and
• any qualifications required by the arbitrators.

Under normal circumstances, it is expected that the parties’ arbitration agreement will provide for the procedure for appointing a tribunal. In the event that it does not, the Arbitration Act sets the following default mechanisms:

• A sole arbitrator – to be jointly appointed no later than 28 days after service of a written request by one of the parties (Section 20(2)(a) of the Arbitration Act). 
• A tribunal composed of two arbitrators – each party to appoint an arbitrator no later than 14 days after service of a written request by one of the parties (Section 20(2)(b) of the Arbitration Act). Unless otherwise stated by the parties, an agreement that the number of arbitrators will be two, or any other even number, will be understood as requiring the appointment of an additional arbitrator as chairperson of the arbitral tribunal (Section 19(2) of the Arbitration Act).
• A tribunal composed of three arbitrators – each party to appoint an arbitrator no later than 14 days after service of a written request by one of the parties. The two arbitrators appointed then appoint a chairperson (Section 20(2)(c) of the Arbitration Act).
• A tribunal composed of two arbitrators and an umpire – the same as above, except that the appointment must be made before any substantive hearing, or where the arbitrators cannot agree on a matter relating to the arbitration (Section 20(2)(d) of the Arbitration Act).

Where the parties have not agreed on the number of arbitrators, the tribunal will consist of a sole arbitrator (Section 19(3) of the Arbitration Act). 

In an instance where the parties have agreed that the matter will be presided over by two arbitrators, and one of the parties has appointed an arbitrator of its choice while the second party has defaulted, the first party may give notice in writing to the other party for the appointed arbitrator to act as a sole arbitrator whose award will be binding on the parties (Section 21(2)(b) of the Arbitration Act). 

The Arbitration Act provides for the intervention of the Centre, and not the courts, in default of appointment. However, considering that the Centre is not yet functional, such powers will be assumed by the court.

Where the parties fail to appoint an arbitrator, either party may, upon notice to the other party, apply to the Centre, which will give directions as to the making of any necessary appointment or will itself make any necessary appointment (Section 22(2) of the Arbitration Act). 

Section 28 of the Arbitration Act governs the challenge and removal of arbitrators. A party may apply to the Centre to remove an arbitrator on any of the following grounds:

• there are circumstances which give rise to justifiable doubts as to the arbitrator’s impartiality;
• the arbitrator does not have the qualifications required by the arbitration agreement;
• the arbitrator is physically or mentally incapable of conducting the proceedings or there are justifiable doubts as to their capacity to do so; or
• the arbitrator has failed or refused to:
1. properly conduct proceedings;
2. use all reasonable dispatch in conducting the proceedings; or
3. make an award, and substantial injustice has been or will be caused to the applicant.

It should be noted that the arbitrator will only be removed after being heard by the Centre. 

In the case of Arab Contractors (Osman Ahmed Osman & Co) & Another v Bharya Engineering & Constructing Company Limited (Becco) & Another (Misc. Commercial Case 28 of 2022) [2022] TZHCComD 344 (4 November 2022), the court applied Section 28 to remove an arbitrator on the basis that the arbitrator conducted the proceedings in breach of natural justice. 

An arbitrator appointed to preside over an arbitration proceeding is required, under Regulation 14 of the Rules of Procedure, to have the following qualifications: 

• to be an arbitrator who is accredited or registered in terms of the Reconciliation, Negotiation, Mediation and Arbitration (Practitioners’ Accreditation) Regulations, 2021 (the “Practitioners’ Accreditation Regulations”);
• to have no family relationship based on descent and/or marriage down to the third generation, with any of the parties involved in the dispute;
• to have no financial interest or any other interest whatsoever in the result of the arbitration;
• to be named in the arbitration agreement by the parties; and
• to be a person of high moral character and recognised competence in the field of law, commerce, industry or finance, who may be relied upon to exercise independent judgement.

As per the Arbitration Act and its Regulations, an arbitrator is obliged to disclose all facts and circumstances which may raise concerns as to their impartiality and independence. 

See 3.2 Arbitrability and 3.3 National Courts’ Approach.

There is insufficient guidance on matters excluded from arbitration. However, it is evident that where the law vests the courts/quasi-judicial body with exclusive jurisdiction to determine a matter, such matter cannot be arbitrated, for example, winding-up proceedings, criminal matters, or unfair prejudice as a minority shareholder. 

Section 34 of the Arbitration Act provides that, unless agreed otherwise, the tribunal may rule on its own substantive jurisdiction, as to:

• whether there is a valid arbitration agreement;
• whether the tribunal has been properly constituted; and
• what matters have been submitted to arbitration in accordance with the arbitration agreement.

The Arbitration Act provides for three circumstances where it can address the issues of the jurisdiction of an arbitral tribunal.

Section 36 of the Arbitration Act

Section 36 of the Arbitration Act provides that a party subject to arbitration proceedings may apply to the court to rule on any question as to the substantive jurisdiction of the arbitral tribunal. Such an application to the court will not be considered unless the following requirements are met: 

• the application is made with the agreement in writing of all the other parties to the proceedings; or
• the application is made with the permission of the arbitral tribunal and the court is satisfied that:
1. the determination of the question is likely to produce substantial savings in costs;
2. the application was made without delay; and
3. there is good reason why the matter should be decided by the court.

Unless the parties agree otherwise, the tribunal may proceed with conducting the proceedings and make an award pending determination of an application.

Section 74 of the Arbitration Act

Under Section 74 of the Arbitration Act, a party to the proceedings has the power to challenge any award made by the tribunal ruling on its substantive jurisdiction, provided that the party challenging said award provides notice to the other parties and to the arbitral tribunal.

Section 79 of the Arbitration Act

Finally, under Section 79 of the Arbitration Act, a party that does not take part in the proceedings can apply to the court for a declaration or injunction to restrain arbitration proceedings by challenging:

• the validity of an arbitration agreement;
• whether the arbitral tribunal has been properly constituted; or
• what matters have been referred to arbitration in accordance with the arbitration agreement.

A party that partakes in the arbitration proceedings, without raising an objection on the jurisdiction of the tribunal, loses its right to raise such objection (Section 80 of the Arbitration Act). 

Pursuant to Section 35 of the Arbitration Act, a party may raise an objection on the ground that the arbitral tribunal lacks substantive jurisdiction, no later than the point at which the party takes the first step in the proceedings to contest the merits of any matter in relation to which the party is challenging the arbitral tribunal’s jurisdiction. 

Under Section 36 of the Arbitration Act, a party may make an application to the court, as soon as possible, to determine any questions as to the substantive jurisdiction of the arbitral tribunal. 

A party may challenge an award of the tribunal ruling on its substantive jurisdiction within 28 days of the award being made (Section 77(3) of the Arbitration Act). 

The standard of judicial review for questions of admissibility and jurisdiction is not stipulated in Tanzania’s arbitration laws, nor has it been tested in case law. However, borrowing from decisions in the UK, any party challenging an award based on substantial jurisdiction is entitled to a complete rehearing of the jurisdictional matters, rather than just a review of the tribunal’s decision on the issue. 

The courts have emphasised in various decisions that the parties are bound by their agreements. 

Where a party institutes a suit in court, in breach of an arbitration agreement, the other party can apply to have the suit stayed pending arbitration (Section 15(1) of the Arbitration Act). 

Section 15(3) of the Arbitration Act obliges a party seeking to stay the suit pending arbitration, to first take appropriate procedural steps to acknowledge the legal proceedings against them. In Tanzania, this would involve filing a written statement of defence within 21 days of service of the plaint.

Where a party fails to institute an application for stay of suit before the court, after having filed a written statement of defence, they will be deemed to have waived their right to refer their dispute to arbitration. This was held by the High Court of Tanzania in Diamond Motors Limited v STC Construction Limited & Another (Civil Case No 156 of 2023) [2024] TZHC 1520 (19 April 2024). 

The Arbitration Act defines the term “party” to mean a party to an arbitration agreement. The tribunals will only assume jurisdiction over individuals or entities that are party to an arbitration agreement or signatories to the contract containing the arbitration agreement. 

In the case I & M Bank (T) Limited v Bayview Properties Limited & another (Miscellaneous Commercial Application 36 of 2022) [2022] TZHCComD 299 (22 September 2022), the High Court addressed a scenario where a third party, who did not participate in the arbitration proceedings, felt affected by the final award and sought to be joined as a party to the petition challenging the award.

The court reaffirmed the fundamental principle that an arbitration agreement is a contract binding only on the parties to the agreement. However, there are limited circumstances where third parties, not party to the original agreement, may be bound by or benefit from it. These situations include instances where there is an assignment or transfer of contractual rights or cause of action to a third party.

It is important to note that the Arbitration Act, like the English Arbitration Act of 1996, intentionally avoids using the term “interim awards” to prevent ambiguity between provisional and partial awards. This distinction was pointed out in paragraph 233 of The Departmental Advisory Committee on Arbitration on the Arbitration Bill 1996.

Nevertheless, while the substance of the Arbitration Act does not use the term “interim”, it does appear in the definition of an award and in the Rules of Procedure. An arbitral award under the Arbitration Act is defined to include interim awards. Regulation 37 of the Rules of Procedure stipulates that the tribunal must decide on any challenge to its jurisdiction as a preliminary matter in relation to interim awards. However, the tribunal retains the option to proceed with the arbitration and address the jurisdictional challenge in its final award if it deems this approach suitable. This appears to delineate the scope of interim awards under the Arbitration Act.

Section 45 of the Arbitration Act provides for the general powers of the arbitral tribunal, unless otherwise agreed by the parties, which are:

• to order a claimant to provide security for the cost of the arbitration; 
• to give directions relating to property that is the subject matter of the proceedings or about which any question arises in the proceedings;
• to direct a party or witness to be examined; and
• to give directions for the preservation of evidence in the party or witness’s custody and control.

Section 46 of the Arbitration Act enables the tribunal to issue provisional awards, should it be so authorised by the parties. 

Unless otherwise agreed by the parties, Section 51 of the Arbitration Act enables the court to make the following interim orders:

• the taking of the evidence of witnesses;
• the preservation of evidence;
• making orders relating to property which is the subject of the proceedings or as to which any question may arise in the proceedings –
1. for the inspection, photographing, preservation, custody or detention of the property; or
2. ordering that samples be taken from, or any observation be made regarding, or experiment conducted upon, the property; and for that purpose, the court may authorise any person to enter any premises in the possession or control of a party to the arbitration;
• the sale of any goods which are the subject of the proceedings; or
• the granting of an interim injunction or the appointment of a receiver.

Regulation 38 of the Rules of Procedure also makes provision for the appointment of emergency arbitrators in an instance where urgent interim relief is required prior to the formation of the tribunal. The party seeking such interim relief may apply to the Centre, which will subsequently appoint an arbitrator to preside over the hearing seeking relief. Any order by the emergency arbitrator will be binding on the parties. 

The law does not cater for court intervention after an emergency arbitrator has been appointed. Given the strict set of circumstances under which a court may intervene in arbitration proceedings, it is unlikely that a court will be able to intervene once an emergency arbitrator has been appointed. 

As provided under 6.1 Types of Relief, Section 45 of the Arbitration Act enables a tribunal with the power to do so to order security for costs, unless otherwise agreed by the parties.

Section 38 of the Arbitration Act enables the parties to agree their own procedural rules. In the absence of such agreement, the default provisions under the Arbitration Act and the Rules of Procedure Arbitration proceedings are governed by the Arbitration Act and the Rules of Procedure.

The procedure for registration and accreditation of arbitrators is governed by the Practitioners Accreditation Regulations.

The conduct of arbitrators is governed by the Code of Conduct and Practice for Reconciliators, Negotiators, Mediators and Arbitrators Regulations, 2021 (the “Code of Conduct”).

See 7.1 Governing Rules. The parties can agree on the procedural rules to govern their dispute.

Arbitration proceedings in respect of a particular dispute will commence on the date on which the request for the dispute to be referred to arbitration is received by the other party. The procedural rules will be as agreed by the parties or directed by the tribunal.

The tribunal, under Section 37 of the Arbitration Act, has a general duty to:

• act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting their case and dealing with that of their opponent; and
• adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters to be determined.

Section 43 of the Arbitration Act provides that a party may be represented by an advocate or any other person chosen by them. The law does not limit the qualification of the “other person chosen by them”. 

In the case of M/s Jandu Plumbers Limited v M/s Hodi (Hotel Management) Company Limited (Miscellaneous Civil Cause 3 of 2020) [2021] TZHC 5903 (20 August 2021), the court held that the conduct of foreign lawyers representing a party in domestic arbitration proceedings, without obtaining a special licence from the Chief Justice, was illegal. This ruling deviated from the usual practice where foreign lawyers are permitted to represent parties in arbitration without requiring a special licence.

While the decision in question is currently under appeal, it is arguable that the court erred in its interpretation of the law. The Advocates Act (Cap 341 RE 2019) provides provisions for foreign lawyers to apply to the Chief Justice for a practising certificate, explicitly stating that such a certificate may be granted for “one case” or for one appearance in a “specific case”. The cases referred to in Section 39 of the Advocates Act are proceedings before courts of law, over which the Chief Justice holds administrative authority.

The issuance of a practising certificate by the Chief Justice is limited to appearances before the High Court or any court subordinate to it. It does not encompass appearances before an arbitral tribunal, which is a product of an agreement between the parties, rather than a court of law.

The arbitral tribunal has the discretion to decide on all procedural and evidential matters, subject to the agreement of the parties (Section 38 of the Arbitration Act). These include:

• whether and, if so, what form of written statements of claim and defence are to be used, when these should be supplied, and the extent to which such statements can be later amended;
• whether and, if so, which documents or classes of documents will be disclosed and produced by the parties and at what stage;
• whether and, if so, what questions will be put to and answered by the respective parties, and when and in what form this shall be done;
• whether to apply strict rules of evidence or any other rules as to the admissibility, relevance, or weight of any material oral, written, or other evidence sought to be tendered on any matter of fact or opinion, and the time, manner, and form in which such material will be exchanged and presented;
• whether and to what extent the arbitral tribunal will itself take the initiative in ascertaining the facts and the law; and
• whether and to what extent there will be oral or written evidence or submissions.

See 8.1 Collection and Submission of Evidence. 

Pursuant to Section 50 of the Arbitration Act, a witness within Tanzania who is unwilling to attend arbitration proceedings in order to provide oral testimony, or to produce documents or other material evidence, may be compelled to attend the proceedings via an application to the court. A party to the proceedings, with the permission of the arbitral tribunal or by agreement with the other party, may apply to the court for the issuance of a witness summons.

With regard to the production of documents, a witness is not compelled to produce any document or material evidence in arbitration that the witness would not be compelled to produce in proceedings in court (Section 50(3) of the Arbitration Act). This provision is intended to protect the witness’s right not to produce evidence that is privileged and to prevent disclosure of documents by way of a “fishing expedition”.

Arbitration proceedings are usually conducted privately and in camera (Section 39(1) of the Arbitration Act). Both the parties and the arbitral tribunal are under an obligation to keep the entirety of the arbitration proceedings confidential (Section 39(2) of the Arbitration Act). The law permits very limited circumstances where disclosure of confidential information may be permitted, which include attaching the award if the court is being moved to exercise its supervisory powers or if the award is being executed (Section 39(3) of the Arbitration Act).

Confidential information under the Arbitration Act is defined as:

• “in relation to arbitral proceedings, information that relates to the arbitral proceedings or to an award made in those proceedings, includes:
1. the statement of claim, statement of defence, and all other pleadings, submissions, statements, or other information supplied to the arbitral tribunal by a party;
2. any evidence, whether documentary or otherwise, supplied to the arbitral tribunal;
3. any notes made by the arbitral tribunal of evidence or submissions given before the arbitral tribunal;
4. any transcript of oral evidence or submissions given before the arbitral tribunal;
5. any rulings of the arbitral tribunal; or
6. any award of the arbitral tribunal;
• in relation to confidential information, [this] includes publishing, communicating, or otherwise supplying the confidential information.”

Section 59 of the Arbitration Act enables the parties to agree on the form of an award. Unless agreed otherwise, the award must:

• be in writing signed by all arbitrators;
• contain the reasons for the award unless it is an agreed award or the parties have agreed to dispense with the reasons; and
• state the seat of arbitration and the date when the award was made.

An arbitral award is required to be made in writing stating the reasons upon which the award is based, unless the parties have agreed that no reasons are to be given. An award granted by an arbitral tribunal will be passed based on the legal stipulations or based on justice and propriety.

Pursuant to Regulation 4(10) of the Rules of Procedure, proceedings under the Rules of Procedure Regulation must be completed within a period of no longer than 180 days from the date of composition of the arbitral tribunal, unless otherwise agreed by the parties. Where the dispute is complex, the tribunal may extend the deadline upon notice to the parties. An award is to be delivered within 30 days of the conclusion of the hearing (Regulation 43 of the Rules of Procedure).

Section 55(1) of the Arbitration Act allows the parties to agree on the powers exercisable by the tribunal in regard to remedies. Barring any agreement otherwise, the tribunal will have the following powers:

• to make a declaration as to any matter to be determined in the proceedings;
• to order the payment of a sum of money, in any currency;
• to require a party to do or refrain from doing something;
• to order specific performance of a contract, other than a contract relating to land; or
• the rectification, setting aside, or cancellation of a deed or other document.

Unless otherwise agreed by the parties, Section 56 of the Arbitration Act entitles the tribunal to issue pre-award and post-award interest. The tribunal is free to choose whether to issue simple or compound interest, from such dates, at such rates and with such rates as it considers to be just.

Costs under the Arbitration Act include the arbitrators’ fees and expenses, the fees and expenses of any arbitration institution concerned, and the legal or other costs of the parties (Section 66 of the Arbitration Act). 

In the absence of an agreement otherwise, the tribunal may make an award allocating the costs of arbitration as between the parties. In addition, the tribunal may award costs on the general principle that costs follow suit, except where it appears to the tribunal that this is not appropriate in relation to the whole or part of the costs (Section 68 of the Arbitration Act).

The only restriction on agreements concerning costs between parties is if the agreement requires one party to bear the entire or partial costs, regardless of the outcome of the dispute. Such agreements are considered void. However, they will be upheld if the parties reached the agreement after the dispute had arisen (Section 67 of the Arbitration Act).

An arbitral award is deemed to be final, and not open to appeal, unless the parties agree otherwise (Section 65 of the Arbitration Act). 

This, however, does not preclude a party from challenging the award on the following grounds: 

• the tribunal lacked substantive jurisdiction to make the award (Section 74 of the Arbitration Act); or
• serious irregularity exists that has or is likely to cause substantive injustice to the application (Section 75 of the Arbitration Act). 

The law provides for an exhaustive list of grounds for alleging serious irregularity. These are:

• failure by the tribunal to comply with its general duty;
• the tribunal has exceeded its powers other than by exceeding its substantive jurisdiction;
• failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties;
• failure by the tribunal to deal with all the issues that were put to it;
• any arbitration institution or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding their powers;
• uncertainty or ambiguity as to the effect of the award;
• the award being obtained by fraud, or the award or the way in which it was procured, being contrary to public policy;
• failure to comply with the requirements as to the form of the award; or
• any irregularity in the conduct of the proceedings or in the award, which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award.

Where the court determines that there is a serious irregularity affecting the tribunal, it may:

• remit the award to the arbitral tribunal, in whole or in part, for reconsideration; 
• set aside the award in whole or in part; or
• declare the award to be of no effect, in whole or in part. 

The parties cannot exclude the scope of a challenge on substantive jurisdiction or serious irregularity; however, it may be excluded from the scope of the parties to approach the court on a question of law (Section 76(1) of the Arbitration Act). 

The merits of a case cannot be reviewed or determined by a court. A party challenging an award based on substantial jurisdiction is entitled to a complete rehearing of the jurisdictional matters, rather than just a review of the tribunal’s decision on the issue. 

Tanzania has signed the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). However, the treaty has not been domesticated into law in Tanzania. 

Tanzania is also a party to the Geneva Convention on the Execution of Foreign Arbitral Awards 1927 (the “Geneva Convention”), the Geneva Protocol on Arbitration Clauses (the “Geneva Protocol”), the ICSID Convention 1965, the Multilateral Investment Treaties Guaranteed Agency Convention 1958 (the “MIGA Convention”) and several bilateral investment treaties with other countries.

Foreign arbitral awards are recognised and can be enforced by the High Court, subject to compliance with the Arbitration Act. According to the provisions of Section 78(1) of the Arbitration Act, upon application in writing to the High Court, a domestic arbitral award or foreign arbitral award will be recognised as binding and enforceable.

Standards

Under Section 83 of the Arbitration Act, in order for an award to be enforceable, it must:

• have been made in pursuance of an agreement for arbitration which was valid under the law by which it was governed;
• have been made by the arbitral tribunal provided for in the agreement or constituted in a manner agreed upon by the parties; 
• have been made in conformity with the law governing the arbitration procedure; 
• have become final in the country in which it was made;
• have been in respect of a matter which may lawfully be referred to arbitration under the laws of Tanzania, and its enforcement may not be contrary to the public policy or the laws of Tanzania; and
• not contradict conditions for the enforcement of foreign awards, as provided under Section 83(2) and (4) of the Arbitration Act.

Procedures

Regulation 63 of the Rules of Procedure provides for the format in which the application for enforcement of the arbitral award must be made to the court, namely, it must:

• be made by way of petition and be titled “In the matter of the arbitration and in the matter of the Act”, and reference must be made in the application to the relevant section of the Arbitration Act;
• contain a brief statement, in summary form, of the material facts; be divided into paragraphs numbered consecutively; and state the nature of the relief sought or the questions of law for the determination of the court, as the case may be;
• have attached to it the submission, the minutes or proceedings of the arbitral tribunal award or the ruling to which the petition relates; or have a copy of the arbitral award, certified by the petitioner or their advocate to be a true copy; and
• specify the persons affected by it and upon whom notice is required to be given as provided in the Regulation, and it must state the address, in detail, of each of them.

No less than seven days before the date for the hearing of a petition, or such lesser time as a magistrate or judge may allow, written notice must be given by the court to all persons specified in the petition and to such other persons as appear likely to be affected by the proceedings, requiring them to show cause, within the time specified in the notice, why the relief sought should not be granted, and if no sufficient cause is shown, a judge may make such order as the circumstances of the case appear to them to require.

Status of an Award That Has Been Set Aside or is Subject to an Ongoing Set-Aside Proceeding

An award that has been set aside by the courts in the seat of arbitration, or that is subject to an ongoing set-aside proceeding in the seat of arbitration, will not be enforceable in Tanzania, as it is not yet final. 

Defence of Sovereign Immunity

Tanzania currently has no law in place regulating state immunity, nor is there a judicial precedent discussing the inclination of the judiciary in Tanzania either towards absolute or restrictive immunity. The defence of sovereign immunity will not be available where the state has consented to arbitration contained in a bilateral investment treaty or where it has been expressly waived in the agreement between the parties. 

It is important to note that a party will not be able to attach the properties of the Tanzanian government during the enforcement of an award through the Tanzanian courts. This is because the Government Proceeding Act (CAP 5 RE 2019) explicitly prohibits attachment of government assets; instead, the decree-holder may approach the Permanent Secretary of the Treasury, who will then pay the amount lawfully due.

Tanzanian courts generally recognise and enforce arbitral awards. This is reflected in the Arbitration Act, which sets strict parameters on the grounds on which the court can reject enforcement of an arbitral award.

Among the grounds preventing enforcement of an arbitral award is whether the award is contrary to the domestic public policy of Mainland Tanzania. 

In the case of Catic International Engineering (T) Limited v University of Dar es Salaam, Miscellaneous Commercial Cause No 1 of 2020, the High Court of Tanzania (Commercial Division), at Dar es Salaam (unreported), the arbitral tribunal ruled in favour of the petitioner, a public institution, on the grounds of public policy. The court held, however, that the underlying agreement giving rise to the arbitration proceedings did not adhere to the procurement laws of Tanzania. 

The court cited, with approval, the Kenyan case of Tanzania National Roads Agency v Kundan Singh, Miscellaneous Civil Application No 171 of 2012 (unreported), where it was held that an award could be set aside on the grounds of public policy if it was shown that the award was:

• inconsistent with the constitution or other laws of the country;
• inimical to national interests; or
• contrary to justice or morality.

The law does not cater for class action or group arbitration, especially since arbitration is typically a contractual affair binding only upon the parties to the agreement. 

Arbitrators are bound by a code of conduct that delineates fundamental principles to which they must adhere in the course of dispute resolution. These principles encompass the obligations to act impartially, equitably, confidentially, in the interest of justice and fairness, and to assiduously avoid any conflicts of interest.

At present, there is no enacted code of conduct specifically governing counsel representing parties in arbitration proceedings. While each profession is currently guided by its respective ethical code, this situation raises pertinent questions regarding the applicability of these codes in arbitration proceedings and the corresponding disciplinary mechanisms. For instance, it remains unclear whether the Medical Council of Tanganyika would possess the authority to exercise disciplinary action if a medical practitioner, acting as counsel, were to conduct themselves in a manner detrimental to their client’s interests. Furthermore, the question arises as to whether a medical professional can be held liable for actions undertaken outside the scope of medical practice.

It could be posited that the sole profession offering adequate redress for a party is when the counsel representing said party is an advocate. Advocates are governed by the Advocates Act (CAP 341 RE 2019), which mandates that they act with confidentiality, competence, honesty, and in the best interests of their clients. In such cases, disciplinary redress can be sought through the established Advocates Committee.

Given that the law does not restrict parties from selecting counsel of their choice, it may be prudent to enact legislation governing the code of conduct for counsel in arbitration proceedings. This consideration becomes particularly salient in light of the fact that the selected counsel may not necessarily be a member of a regulated profession.

There are no rules or restrictions on third-party funders in Tanzania. 

Arbitration proceedings may be consolidated, or concurrent hearings may be held, only where the parties agree to do so based on terms agreed upon by the parties (Section 42 of the Arbitration Act). 

Unless the parties agree to this, an arbitral tribunal does not have the power to order the consolidation of proceedings or concurrent hearings.

An arbitration agreement generally only binds the parties that signed the agreement. It will not be binding upon a third party. 

The exception to this rule was seen in the case of I & M Bank (T) Limited v Bayview Properties Limited & Another (Miscellaneous Commercial Application 36 of 2022) [2022] TZHCComD 299 (22 September 2022) where the High Court addressed a scenario where a third party, who did not participate in the arbitration proceedings, felt affected by the final award and sought to be joined as a party to the petition challenging the award.

The court reaffirmed the fundamental principle that an arbitration agreement is a contract binding only on the parties to the agreement. However, there are limited circumstances where third parties, who are not party to the original agreement, may be bound by or benefit from it. These situations include instances where there is an assignment or transfer of contractual rights or cause of action to a third party.