DEVELOPMENT OF ARBITRATION LAW IN TANZANIA

On the 15th January 2021, through Government Notice No. 101 the Government published the commencement date of the Arbitration Act, 2020 to be 18th January 2021. The Arbitration Act repeals and replaces the Arbitration Act, 1931.

With the commencement of the new law

  1. Anything done or concluded under the repealed law is deemed to have been done or concluded under the new law.
  2. Any arbitration arrangement concluded before the commencement of the new law and has not yet materialized has to be renegotiated and brought in line with this new law.
  3. Any arbitration proceedings pending to proceeded under the new law.
  4. Any arbitration award granted is deemed to have been granted under this new law.

Domestic arbitration

An arbitration agreement is deemed to be domestic arbitration if it provides expressly or by implication for arbitration in Mainland Tanzania, and at the time when proceedings are commenced, or the arbitration is entered into:

  1. Where the arbitration is between individuals, the parties are nationals of the United Republic or are resident in the United Republic.
  2. Where the arbitration is between bodies corporate, the parties are incorporated in the United Republic or their central management and control are exercised in the United Republic.
  3. Where the arbitration is between an individual and a body corporate: –
    i. the party who is an individual is a national of the United Republic or is resident in the United Republic.
    ii. the party that is a body corporate is incorporated in Mainland Tanzania or its central management and control is exercised in Mainland Tanzania.
  4. The place where a substantial part of the obligations of the commercial relationship is to be performed, or the place in which the subject matter of the dispute is Mainland Tanzania.

Amendment of the Natural Wealth and Resources (Permanent Sovereignty) Act, Cap. 449

The Natural Wealth and Resources (Permanent Sovereignty) Act is amended in Sections 11(2) and 11(3) by deleting the word “established” appearing in subsections (2) and (3).

By deleting the word “established” in the mentioned Sub-sections of the law, now disputes arising from extraction, exploitation or acquisition and use of natural wealth can be adjudicated by judicial bodies or other organs not necessarily established for the purpose. This paves way for arbitration as may be agreed by
the parties in an arbitration agreement.

However, the exclusion of foreign courts and tribunals on permanent sovereignty over natural wealth and resources is maintained. Disputes arising from extraction, exploitation or acquisition and use of natural wealth and resources can only be adjudicated by judicial bodies or other organs in the United Republic
and in accordance with laws of Tanzania. For this purpose, judicial bodies or other bodies established in the United Republic and application of laws of Tanzania are required to be acknowledged and incorporated in any arrangement or agreement.

Accreditation of Arbitrators

The new law empowers the Minister responsible for legal affairs to establish and maintain a system of accreditation for reconciliators, negotiators, mediators and arbitrators and keep a register of accredited persons who may be involved in facilitation of reconciliations, negotiations, mediations and arbitrations.

Establishing an Arbitration Center
The new law establishes the Tanzania Arbitration Centre

Mandatory provisions

Some parts of the new law are mandatory and have effect notwithstanding any agreement to the contrary. The mandatory provisions are the following:

  1. Section 13 relating to stay of legal proceedings.
  2. Section14 relating to power of court to extend agreed time limits.
  3. Section15 relating to application of the Law of Limitation Acts.
  4. Section26 relating to power of court to remove arbitrator.
  5. Section 28(1) relating to effect of death of arbitrator.
  6. Section 30 relating to liability of parties for fees and expenses of arbitrators.
  7. Section 31 relating to immunity of arbitrator.
  8. Section 32 relating to objection to substantive jurisdiction of the arbitral
    tribunal.
  9. Section 34 relating to determination of preliminary point of jurisdiction.
  10. Section 35 relating to general duty of the arbitral tribunal.
  11. Section 39(2) relating to items to be treated as expenses of arbitrators.
  12. Section 42 relating to general duty of parties.
  13. Section 45 relating to securing the attendance of witnesses.
  14. Section 58 relating to power to withhold award in case of non-payment.
  15. Section 64 relating to effectiveness of agreement for payment of costs in any
    event.
  16. Section 68 relating to enforcement of award.
  17. Sections 69 and 70 relating to challenging the award: substantive
    jurisdiction and serious irregularity.
  18. Sections 72 and 73 relating to supplementary provisions and effect of order
    of court.
  19. Section 74 relating to saving for rights of person who takes no part in
    proceedings.
  20. Section 75 relating to loss of right to object.
  21. Section 76 relating to immunity of arbitral institutions.
  22. Section 77 relating to the establishment and operations of the Centre.

Regulation

Through Government Notice No. 146 of 29th January 2021, the Government published The Arbitration (Rules of Procedure) Regulations, 2021.

On 29th January 2021, through Government Notices Nos. 148 and 149 the Government issued the Code of Conduct and Practice for Reconciliators, Negotiators, Mediators and Arbitrators Regulations, 2021 and the Tanzania Arbitration Centre (Management and Operations) Regulations, 2021 respectively.
The Regulations are an essential tool for the operation of the Arbitration Act.