Procedures for conducting arbitration in Tanzania.

 

INTRODUCTION

Arbitration is an alternative dispute resolution (ADR), that has been embraced by many countries worldwide, including Tanzania. Arbitration is out of court dispute resolution mechanism in which parties to a dispute agree to have an impartial third party, known as an arbitrator, who conducts hearing and make a final and binding decision on the dispute. The use of arbitration in disputes settlement has increased in Tanzania due to its flexibility, speed, and confidentiality. Our Civil Procedure Code (CPC)[1] has made it mandatory for all civil suits to be tried by mediation and arbitration prior being subjected to actual court trial. ADRs are considered useful because they’re speed and less time consuming hence are necessary and reliable for cutting off the problem of case backlogs before our courts. Arbitration proceedings in Tanzania are regulated by two core legislations; the Arbitration Act[2] and the Civil Procedure Code. The Arbitration Act is a major legislation governing generality of procedures of conducting arbitration while Civil Procedure Code governs mandatory arbitrations which are born from civil suits instituted before traditional courts. Arbitration can be used to resolve disputes in a variety of areas, including commercial, construction, labor, consumer disputes and environment. Apart from being fast, flexible and confidential, arbitration is less formal and cheap compare to traditional court proceedings[3].

When parties have an arbitration contract, or have an arbitration clause in their broader business contract, they can institute an arbitration proceeding to settle their dispute because they have a backup provision which governs mode of settling their disputes. An arbitration agreement is a contract or agreement between the parties that sets out the terms and conditions under which disputes will be resolved through arbitration. The agreement may be a stand-alone document or may be included as a clause in a broader business contract. Once a dispute arises, the parties must refer their dispute(s) to arbitration in accordance with the procedures set out in the arbitration agreement. This typically involves providing request of arbitration to the other party and initiating the arbitration process. The parties may choose to appoint a solo neutral third-party arbitrator or a panel of arbitrators, or may agree to have an arbitral institution such as the Tanzania Institute of Arbitrators (TIArb) or National Construction Council (NCC) to administer the proceedings.

REQUEST FOR ARBITRATION

A request for arbitration is a formal document submitted by one party in a dispute to initiate the arbitration process. This document plays a crucial role in commencing the arbitration proceedings and can have a significant impact on the outcome of the dispute. As per rule 5(1) and (2)(a)-(h) of the Arbitration (Rules of Procedure)[4], a request for arbitration must be in writing and include specific information. Firstly, the request must identify the names and addresses of the parties involved in the dispute. This information is crucial for the parties and the arbitrator to know who they are dealing with and to ensure proper communication between the parties and the tribunal. Secondly, the request must contain a reference to the arbitration agreement or a copy of the arbitration agreement itself attached to a request for arbitration which is actually a form no 3 of the fourth schedule of Arbitration Rules of Procedure. This requirement ensures that the tribunal has the necessary information to confirm the existence and validity of the arbitration agreement[5].

Thirdly, the request for arbitration must include a statement of the nature and circumstances of the dispute giving rise to the claim or claims. This requirement ensures that the arbitrator has a clear understanding of the issues in dispute and can properly evaluate the evidence presented. Fourthly, the request must specify the relief or remedy sought by the claimant. This requirement is essential because it outlines the outcome the claimant seeks to achieve through arbitration and helps the arbitrator determine the appropriate relief to grant. Lastly, the request for arbitration must include the appointment of an arbitrator or a request for an arbitral institution to appoint an arbitrator. This requirement ensures that the arbitration process can proceed smoothly, and an arbitrator can be appointed in a timely manner[6].

It is worth noting that the request for arbitration must also be served on the respondent. Service is typically done in accordance with the arbitration agreement or the rules of the arbitral institution, or the standard rules established by the Arbitration Act or its rules of procedures and regulations. Failure to properly serve the respondent may result in delays or other procedural issues which may bar subsequent tribunal procedures.

APPOINTMENT OF ARBITRATORS

Under the Arbitration Act[7], there are several modes for appointing arbitrators as provided under section 18(1) and (2)(a)-(e) of the Act. The choice of mode will depend on the specific circumstances of the dispute and the preferences of the parties. Firstly, the parties may agree on a specific arbitrator or a panel of arbitrators in their arbitration agreement. If the parties have agreed on a specific arbitrator, that person will be appointed as the sole arbitrator in the dispute. If the parties have agreed to appoint two arbitrators, each party will point an arbitrator and form a panel of two arbitrators. If the parties have agreed on a panel of three arbitrators, they will each appoint one arbitrator, and those two arbitrators will then select a third arbitrator who will serve as the presiding arbitrator or chairman. Secondly, if the parties have not agreed on a specific arbitrator or panel of arbitrators, they may appoint an arbitrator(s) through an ad hoc appointment process, in which the parties negotiate and agree on an arbitrator, or through an institutional appointment process, in which an arbitral institution such as TIArb or National Construction Council (NCC) appoints the arbitrator or panel of arbitrators.

Rule 14 of the Arbitration (Rules of Procedure)[8] provides for certain qualifications that an arbitrator must meet in order to be appointed. For example, an arbitrator must be registered in terms of reconciliation, mediation and arbitration by responsible accreditation board, impartial and independent with no blood or family relationship to any of the parties in a dispute before him, and must be a person of high moral character and recognized competence in a field of law, commerce, industry or finance. In addition, an arbitrator must disclose any circumstances that may give rise to justifiable doubts as to their impartiality or independence. Generally, the modes of appointing arbitrators under the Arbitration Act of include appointment by agreement of the parties, ad hoc appointment and institutional appointment. Once the arbitrator or arbitral panel is appointed, the parties will present their respective positions and supporting evidence to the arbitrator(s) in accordance with the procedures set out in part V of the rules and part VII of the Act. The arbitrator(s) will then consider the evidence and render a decision, known as an award, which is binding on the parties. The decision of the tribunal is final unless obtained in fraud and without following the recognized procedures of conducting arbitration.

CONDUCT OF PROCEEDINGS

After serving and filing a request for arbitration to the respondent and tribunal, a said request will be recorded followed by presentation of defense by defendant, then parties will appoint arbitrators.  After all the preliminary stages are completed, now a tribunal will arrange hearing. During hearing, parties are allowed to provide all necessary documents and evidence which add wait to their cases together with calling witnesses to testify. The conduct of proceedings or hearing in arbitration is governed by part V of the rules[9] and part VII of the Act[10]. As per section 35(1) and (2) of the Act, the tribunal is required to act with fairness and impartiality towards all parties, ensuring that each is provided with a reasonable opportunity to present their case and respond to their opponent's arguments. Additionally, the tribunal must tailor its procedures to suit the specific circumstances of each case, ensuring that the arbitral process is conducted efficiently and cost-effectively, while still providing a fair and just outcome for all involved. These general duties apply throughout the arbitral process, from the initial proceedings to the making of decisions on matters of procedure and evidence, as well as all other powers conferred upon the tribunal. Adhering to these obligations can help to ensure that the arbitral process is conducted in a manner that is fair and just for all parties involved. The arbitrator has the power to determine the admissibility, relevance, and weight of the evidence presented by the parties.

Tribunal proceedings are always required to be carried in camera to maintain confidentiality of parties’ details. Confidentiality is a key principle in arbitration, which means that the parties and the arbitral tribunal must maintain the confidentiality of all information and documents related to the arbitration. This principle is often referred to as "private justice" and is a fundamental feature of arbitration as it allows parties to resolve their disputes in a private and confidential manner. Unlike traditional court proceedings, where hearings are often carried in open courts and court documents are generally available to the public, arbitration proceedings are conducted in private and the award is typically confidential. This confidentiality is essential to maintain the integrity of the arbitration process and to encourage parties to participate in it. It allows the parties to speak openly and freely, without fear that what they say will be used against them outside the arbitration. Moreover, the confidentiality of arbitration can also be an advantage in business disputes, as it allows the parties to avoid publicity and negative publicity that could harm their reputation or relationships with customers.

Parties are allowed to appear in person or through their advocates or any other person and when tribunal thinks parties needs expert assistance, it may ensure they’re provided with experts to assist them as provided under rule 34(1), (2) and (3) of the rules. Expert assistants are individuals who possess specialized knowledge or expertise that can assist parties in understanding technical or specialized issues that may arise in an arbitration proceeding. These individuals may be invited to assist parties in the arbitration process, with the consent of all parties, and may include accountants, lawyers, engineers, doctors, surveyors, or any other professionals with specialized knowledge relevant to the dispute at hand. The inclusion of expert assistants in arbitration can be beneficial for parties, as it allows for a more thorough and comprehensive consideration of the issues at hand. By providing technical or specialized knowledge, expert assistants can help parties to better understand complex issues and make more informed decisions.

ARBITRAL AWARDS

After hearing all evidence and arguments presented by the parties, now the arbitrator will conduct review of all documents and evidence and issue final arbitral award[11]. The award is a legally binding document that sets out the tribunal's determination on the issues in dispute and the remedies or relief granted to the prevailing party. The award may be in the form of a written document signed by the arbitrators, or an oral statement delivered in the presence of the parties and recorded in the minutes of the proceedings. The effect of an arbitral award is similar to that of a court judgment, as it is final and binding on the parties. An arbitral award can be enforced in Tanzania by making application to High Court for it to be registered by the court, and the High Court to issue orders with the same effects as those issued within arbitral award. An award made in an arbitration proceeding in Tanzania is final and binding on the parties and can be enforced in the same manner as a judgment of the High Court[12]. A decree holder may execute the judgement by applying attachment and sale of properties of a judgment debtor or committing him to prison.

CONCLUSION

Arbitration has become a widely accepted method of resolving disputes in Tanzania. It offers parties flexibility, privacy, and the ability to choose expert arbitrators with relevant experience in the subject matter of their dispute. The Arbitration Act[13] of Tanzania provides a comprehensive framework for conducting arbitrations, appointment of arbitrators, the conduct of arbitral proceedings, and the enforcement of arbitral awards. The Act also recognizes the importance of fairness and impartiality in arbitration proceedings, and emphasizes the need for confidentiality and the finality of arbitral awards. The Act also provides for the recognition and enforcement of foreign arbitral awards, making Tanzania an attractive destination for international commercial arbitrations. Overall, arbitration is a useful alternative to traditional court proceedings in Tanzania, providing parties with an efficient, cost-effective, and specialized method of resolving their disputes.

 

REFERENCE

JOURNALS

Mgaya, A. M., & Mabula, E. S. (2019). The Legality and Validity of Incorporating by Reference Arbitration Agreements: The Tanzanian Experience. African Journal of International and Comparative Law, 27(2), 248-268. https://doi.org/10.3366/ajicl.2019.0254

Mushi, N. M. (2017). The Role of the Judiciary in Enforcing the Arbitral Awards in Tanzania: A Critical Analysis. Tanzania Journal of Law and Policy, 7(1), 82-96. https://doi.org/10.4314/tjlp.v7i1.7

Ntinda, J. (2018). The Request for Arbitration in International Commercial Arbitration: A Comparative Study of English and French Law. Journal of International Arbitration, 35(2), 201-220. doi: 10.1080/02587203.2018.1440574

STATUTES

Arbitration Act, 2020 (Act 2 of 2020)

Arbitration (Rules of Procedure) GN. NO. 146 of 2021

Civil Procedure Code [Cap 33 R.E 2019]

OTHER SOURCE

Lexology (2022). Alternative dispute resolution: What is it and why use it? Retrieved from https://rb.gy/mmjkw Accessed May 8, 2023.

Mahmood, M. (2019). The Anatomy of the Request for Arbitration under International Arbitration Rules. Arbitration International, 35(4), 481-496. doi: 10.1093/arbint/34.4.481

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[1] Civil Procedure Code [Cap 33 R.E 2019]

[2] Arbitration Act, 2020 (Act 2 of 2020)

[3] Lexology (2022). Alternative dispute resolution: What is it and why use it? Retrieved from https://rb.gy/mmjkw Accessed May 8, 2023.

[4] Arbitration (Rules of Procedure) GN. NO. 146 of 2021

[5] Mahmood, M. (2019). The Anatomy of the Request for Arbitration under International Arbitration Rules. Arbitration International, 35(4), 481-496. doi: 10.1093/arbint/34.4.481

[6] Ntinda, J. (2018). The Request for Arbitration in International Commercial Arbitration: A Comparative Study of English and French Law. Journal of International Arbitration, 35(2), 201-220. doi: 10.1080/02587203.2018.1440574

[7] Ibid. section. 18(1) and (2)(a)-(e)

[8] Ibid. Rule 14

[9] ibid

[10] ibid

[11] Mgaya, A. M., & Mabula, E. S. (2019). The Legality and Validity of Incorporating by Reference Arbitration Agreements: The Tanzanian Experience. African Journal of International and Comparative Law, 27(2), 248-268. https://doi.org/10.3366/ajicl.2019.0254

[12] Mushi, N. M. (2017). The Role of the Judiciary in Enforcing the Arbitral Awards in Tanzania: A Critical Analysis. Tanzania Journal of Law and Policy, 7(1), 82-96. https://doi.org/10.4314/tjlp.v7i1.7

[13] ibid