In private international law, parties are at liberty to choose the law governing their underlying contracts and at the same time choose the forum for dispute resolution. This principle is also recognized under the laws of Tanzania.
Tanzanian law permits parties to agree to resolve any dispute arising out of a contract by arbitration. The parties are able to agree on which law will govern the contract and which rules of arbitration to use.
It should be noted there is a distinction between enforcement of foreign arbitral awards and enforcement of foreign judgements. The latter is addressed in a similar write-up.
An arbitral award refers to the decision of an arbitral tribunal, whether in a domestic or international (foreign) arbitration. In Tanzania, enforcement and execution of arbitral awards are governed both by the Arbitration Act, Chapter 15 of 2019 of the laws of Tanzania (the “Arbitration Act”) and the Civil Procedure Code, Chapter 33 of the laws of Tanzania, Revised Edition 2019.
Resolving disputes by way of international arbitration is one way of addressing disagreements between parties who are Tanzania residents and their foreign counterparts. In financing transactions, lenders normally prefer foreign arbitration clauses reflected in financing documentation (especially where a lender’s home jurisdiction is not covered in the list of countries whose court’s judgements are enforceable in Tanzania under the Reciprocal Enforcement of Foreign Judgements Act, Chapter 8, Revised Edition 2019 of the laws of Tanzania), and as a result, it becomes an important element to look at when enforcing an arbitral award arising out of an arbitral process.
It is worth noting that a foreign arbitral award cannot directly be enforced in Tanzania, as it can only be enforced through the High Court of Tanzania, being the court of original jurisdiction to decide the question forming the subject matter of the arbitration, if the same were a subject matter of a suit. In that regard, processing a foreign award is only the first step, the second step is filing the award with the High Court of Tanzania, and once registered, it is treated as binding for all purposes on the parties between whom it was made.
The primary framework regarding enforcement of arbitral awards in Tanzania is the Geneva Protocol on Arbitration Clauses, 1924, which is a Schedule to the Arbitration Act and the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention 1958 (the “Convention”). The Convention facilitates the enforcement of arbitral awards in all the contracting states, that is, countries that have ratified the Convention, one among which is Tanzania.
In order for a foreign arbitral award to be enforceable in Tanzania, it should (a) have been made in pursuance of an agreement for arbitration which was valid under the law by which it was governed; (b) have been made by the tribunal provided for in the agreement or constituted in manner agreed upon by the parties; (c) have been made in conformity with the law governing the arbitration procedure; (d) have become final in the country in which it was made; and (e) have been in respect of a matter which may lawfully be referred to arbitration under the law of Tanzania, and its enforcement must not be contrary to the public policy or the law of Tanzania.
A foreign arbitration award cannot be enforceable in Tanzania if (a) the award has been annulled in the country in which it was made; or (b) the party against whom it is sought to enforce the award was not given notice of the arbitration proceedings in sufficient time to enable him to present his case or was under some legal incapacity and was not properly represented; or (c) the award does not deal with all the questions referred or contains decisions on matters beyond the scope of the agreement for arbitration: Provided that, if the award does not deal with all the questions referred the court may, if it thinks fit, either postpone the enforcement of the award or order its enforcement subject to the giving of such security by the person seeking to enforce it as the court may think fit.
Enforcement of an international award is initiated by the filing of the original award, or a certified copy in the High Court by the arbitrator, or a person appointed by the arbitrator. Up until 1997, the practice in Tanzania in matters of arbitration awards was that the court was moved by an application to file an award. However, the Court of Appeal in the case of Tanzania Cotton Marketing Board Versus Cogcot Cotton Company SA [Civil Appeal No.2 of 1997 at pg 165-172 of Tanzania Law Reports 1997], took the view that the receipt of the award by the Registrar of the High Court constituted the filing of the award and that, thereafter, the court was required to notify the parties who may wish to challenge or to enforce the award in terms of the law.
An award can be challenged and set aside only by way of an application and on the basis of the circumstances listed above.
Note: This is not a legal opinion and the contents hereof are not meant to be relied upon by any recipient unless our written consent is sought and explicitly obtained in writing.
