With a view to creating an enabling environment for domestic and international arbitration, Tanzania has repealed the Arbitration Act [Cap 15 R.E 2002] and replaced it with a new Arbitration Act, 2020 and Regulations. The purpose of this communique is to unpack the changes brought about through the new Act, which came into effect on 18 January 2021, and the Regulations, effective from 29 January 2021.

This document is organised in five parts, starting with an outline of the 13 parts of the Arbitration Act and then going into some detail on the new Regulations, namely the Arbitration (Rules of Procedure) Regulations, 2021; the Tanzania Arbitration Centre (Management and Operations) Regulations, 2021; and the Reconciliation, Negotiation, Mediation and Arbitration (Practitioners Accreditation) Regulations, 2021.02.

Part 1: The Arbitration Act, 2020

The Act is geared to promoting alternative dispute resolution mechanisms. One of its strengths is that it eliminates ambiguity by clarifying what amounts to domestic commercial arbitration and international commercial arbitration.  

The scope of the Act is limited to mainland Tanzania (Section 5(1)), save for specific circumstance covered under sections 13 and 68 of the Act which relate to stay of proceedings and enforcement of an award, respectively.

Part 1 provides for the interpretation and application of the Act.

Parts II and III provide the general provisions of the Act, which are guided by the principles of:

• fair resolution of disputes by an impartial tribunal without delay or expense;
• parties’ discretion on how their disputes should be resolved; and
• the court’s role as merely subsidiary (non-interference by the court unless permitted by the law).

Parts IV and V cover commencement of arbitral proceedings and the arbitral tribunal, respectively. An interesting component of the Act is the power conferred on the court to grant a complainant an extension of time to undertake the steps required before commencing arbitration proceedings, even if the timeframe for doing so under an agreement or previous order of the court has elapsed.

Additionally, in line with the spirit and general provisions of the Act, which call for parties to be free to agree on how their disputes should be resolved, it places few limits on the parties’ choice of arbitrator.

However, specific criteria in the arbitration agreement may constrain such choice. It is also worth noting that parties are generally at liberty to agree on the number of arbitrators and the procedure for their appointment as provided in sections 17 and 18 of the Act. However, as far as the number of arbitrators is concerned, in cases of default of agreement between the parties, the tribunal shall only consist of one arbitrator. Moreover, where the parties have agreed to an even number of arbitrators, an additional arbitrator will be appointed as chairman.

Further, a party may apply to the court for the removal of an arbitrator if, among other things, it has justifiable doubts as to the arbitrator’s impartiality or competence.

The Act also gives an arbitrator immunity from any liability associated with his/ her actions unless it can be proven that the said actions were done in bad faith or showed professional negligence.

Parts VI, VII and VIII of the Act deal with jurisdiction of the arbitral tribunal, arbitral proceedings and costs. 

Unless otherwise agreed between the parties, the tribunal is granted the power to rule on its own ‘substantive’ jurisdiction, ranging from whether there is a valid arbitration agreement to whether the tribunal has been properly constituted.

Subject to the agreement in writing  by the  parties  or the permission of  the tribunal, a party can also apply to the court to determine any question as to the substantive jurisdiction of the tribunal (determination of preliminary point of jurisdiction).

Traditional duties relating to the conduct of the tribunal are also imposed. These require the tribunal to act fairly and impartially, whilst ensuring that unnecessary delays or expenses are avoided, to provide a fair means for the resolution of the matters to be determined. It is worth noting that the Act is silent on the duty of the arbitrator to disclose any interest (however, both case law and literature have provided for the test for disclosure).

Further to the above, the onus is placed on the arbitral tribunal to decide on all procedural and evidential matters (subject to the agreement of the parties thereof). As is the case in numerous jurisdictions, the award rendered by the tribunal is treated as final and binding (unless there is an agreement to the contrary by the parties). A tribunal may refuse to deliver an award to the parties where one or more parties fail to make full payment of the fees and expenses of the arbitrators.

Concerning the cost of the arbitration, the tribunal may make an order as to cost (subject to any agreement between the parties). Such cost may be in respect to the following:

• the arbitrator’s fees and expenses;
• fees and expenses of any arbitral institution;
• legal or other costs of the parties; and
• costs of, or incidental to, the proceedings.

With regards to the powers of the court in relation to an award, Part IX of the Act provides that an award can only be enforced, with leave (permission) of the court, and may be enforced in the same manner as a judgement and order of the court. Under the Act, a party has the option of applying to the court to challenge an award on the basis that the tribunal lacked substantive jurisdiction; and/ or on grounds of serious irregularity affecting the tribunal, the proceedings or the award.

An interesting feature of the Act is the creation of the Tanzania Arbitration Centre (centre), under Part X of the Act. This provides for the establishment of the centre with functions that include:

• the conduct and management of arbitration;
• registration and maintenance of a list of accredited arbitrators; and
• enforcement of the code of conduct and practice for arbitrators.

In terms of enforcement of arbitral awards, Part XI of the Act provides that domestic arbitral awards and foreign arbitral awards may be enforced and recognised as binding upon written application to the court by the party and upon the court being satisfied that certain conditions have been met. However, a court may not enforce an award if the party it is rendered against provides evidence that the parties to the agreement:

• lacked capacity to enter into the agreement;
• that it was not properly represented or given notice of the appointment of the arbitrator or arbitral proceeding; or
• that the making of the arbitral award was induced or affected by fraud, bribery, corruption or undue influence.

The Act does not expressly provide a time limit for applying for enforcement of an award. Previously, practice dictated that the application must be within six months of the making of the award. This is based on a High Court decision on the interpretation of the previous Act and it would be interesting to see whether this interpretation is adopted for the reading of the current Act.

Lastly, Parts XII and XIII of the Act deal with miscellaneous provisions of, and consequential amendments arising from, the Act. A key provision under these parts is section 86, which states that in applying and construing the Act, an arbitrator should take into regard positions taken by other arbitrators in similar subject matters, as well as positions taken by courts of law in such matters, and justify his or her decision if he or she decides to differ with the position of other arbitrators or courts.

Additionally, the Act calls for any arbitration arrangement concluded before the coming into effect of the Act which has not yet materialised to be renegotiated and brought in line with the Act. This requirement to align also extends to any arbitration proceedings that are pending when the Act comes to full effect.

Moreover, the Act amends the Criminal Procedure Act (CPA), Civil Procedure Code (CPC), Public-Private Partnership Act (PPPA) and The Natural Wealth and Resources (Permanent Sovereignty) Act.

The CPA is amended to clearly provide the mechanisms available to the court to promote reconciliation and encourage and facilitate settlements in an amicable fashion. The court is also granted the power to compound offences, subject to the consent of the parties.

Core to the amendments of the CPC  is the power for the Minister to establish and maintain a system of accreditation for reconciliators, negotiators, mediators and arbitrators and to keep a register of accredited persons. It is noted that no person shall be authorised to practice for a fee as reconciliator, negotiator, mediator or arbitrator unless such a person is accredited. Any person in breach of this requirement would be liable to a fine of up to TZS 5 million or subject to imprisonment of up to two years or both.

Both the NWR (Permanent Sovereignty) Act and the PPPA have been amended to remove the word ‘established’ found in sections 11(2) and (3) of the NWR Act and section 22(b) of the PPA.  This permits the use of foreign arbitral bodies (such as LCIA) if the venue of the arbitration is in Tanzania and Tanzanian law applies. This is a breakthrough as previously these laws required the use of arbitral bodies ‘established in’ Tanzania (i.e. TiArb or NCC), which some investors viewed as non-independent.

The Act is in large part a cut and paste of the English Arbitration Act, 1996. A significant departure is the creation of the register where reconciliators, negotiators, mediators and arbitrators intending to practice for a fee will be registered.

The Act is a promising move by the legislator, investors and legal practitioners.

COMPARATIVE ANALYSIS

ARBITRATION ACT Cap 15 R.E 2002 (Previous Act)	ARBITRATION ACT, 2020 (Act)	COMMENTS
Section	Section
N/A – Definition of international and domestic arbitration	3. Definition of international arbitration   3A. Definition of domestic arbitration	The Act provides for the interpretation of international arbitration as arbitration relating to disputes  arising out of legal relationships considered as commercial under the law and where at least one of the parties is; · A foreign national or habitually resident outside of Tanzania · Foreign body corporate · Association or a body of individuals whose central management and control is exercised out of Tanzania · Foreign Government    Domestic arbitration refers to an arbitration agreement if it provides for arbitration in Mainland Tanzania and between parties who are nationals, residents or bodies incorporated in the United Republic of Tanzania.
1. The Interpretation Section   32. Meaning of Final Award	3. The Interpretation Section	The Act provides many more definitions in comparison to the Previous Act, which only has definitions for two terminologies – ‘the court’ and ‘submission’. However, the Act has not defined a final award. The Previous Act expressly provided for the meaning of a final award. An award would not be deemed as final if there were any proceedings contesting the validity of the award. On the other hand, the Act defines a foreign award to mean an award where the juridical seat of arbitration is in a territory or state other than the United Republic of Tanzania.
N/A – Meaning of court	4A. Meaning of court	The Act specifies the term ‘court’ in relation to both domestic arbitration and international arbitration. For domestic arbitration, reference is made to: district court, resident magistrate’s court, the High Court and Court of Appeal. For international arbitration, ‘court’ refers to the High Court.
3. Scope of application of provisions	5. Scope of application of provisions	The provisions of the Act shall apply where the seat of the Arbitration is Mainland Tanzania. However, other sections of the Act, specifically sections 10, 11, 13, 46 and 68 shall apply even where the seat of arbitration is outside Mainland Tanzania.
N/A – Meaning of ‘Seat of arbitration’	6. Meaning of ‘seat of arbitration’	The Previous Act did not provide  a definition  of seat of arbitration, neither did it refer to the seat. The Act has included a definition as to the seat of Arbitration; where the ‘seat of arbitration’ means the juridical seat of arbitration designated: (a)  in accordance with the law applicable on matters that are subject of the arbitration; (b)  by the parties to the arbitration agreement; or (c)  by any arbitral tribunal or other institution or person vested by the parties with powers in that regard;
N/A – Agreements to be in writing	8. Agreements to be in writing	Whilst the  Previous Act  did not have a provision expressly requiring that arbitration agreements should be in writing, section 8 of the Act provides that the provisions of the Act shall only apply where the arbitration agreement is in writing, and any other agreement between the parties as to any matter is effective for  purposes the Act  only if it is in writing. The subsection to the section provides for certain circumstances where it will be deemed that there was an agreement in writing.
1. Power to stay proceedings where there is a submission   27. Staying of court proceedings in respect of matters to be referred to arbitration under agreements relating to submission to arbitration	13. Stay of legal proceedings	Section 6 of the previous Act dictated that a party may apply to the court for a stay of legal proceedings at any time after appearance and before filing a written statement or taking any other steps in the legal proceeding. On the contrary, the Act requires a party wishing to stay legal proceedings to notify the other party before applying to the court to stay the proceedings. Furthermore, the party is now required to take appropriate procedural steps to acknowledge the legal proceeds against him or take any steps in those proceedings to answer the substantive claims before it can apply for the stay.
1. Power of the court in certain cases to appoint an arbitrator, umpire or third arbitrator   10. Power as to appointment of arbitrators where submission provides for three arbitrators	18. Procedure for appointment of arbitrators	The Previous Act provided that if the tribunal is to consist of a sole arbitrator and parties fail to agree on the appointment of an arbitrator any party may serve the other party notice to agree on appointing an arbitrator. Further, if an appointment is not made within seven clear days after the service of the notice the court may, on application by the party who gave the notice, and after giving the other party an opportunity to be heard, appoint an arbitrator. The Act now requires parties to jointly appoint the sole arbitrator within 28 days of service of written request by either party. The Act also goes a step further by providing the procedure to be followed when the tribunal is to consist of two arbitrators. The Act requires both parties to each appoint an arbitrator within 14 days of written request by either party. This is a change from the previous Act which demanded that both parties each appoint an arbitrator within seven clear days.  Similarly, in the case of where the tribunal is to consist of three arbitrators, each party is required to appoint an arbitrator within 14 days. The two appointed arbitrators will then appoint the third arbitrator. The position in the previous Act was that each party had seven clear days to appoint an arbitrator.
N/A – Arbitrator’s qualifications	21. Arbitrator’s qualifications	The Act requires the court, in deciding whether and how to exercise any of its powers under section 18 or 20, to take into account any agreement of the parties as to the qualifications required of the arbitrators.
11. Power of arbitrator or umpire	40. General power of tribunal	The Act specifies that parties to an arbitration proceeding have the mandate to agree on the powers to be exercised by the arbitral tribunal. It further modifies the Previous Act by adding that arbitrators have the power to: order claimants to provide security for arbitration costs, give guidance in relation to property that is the subject of arbitration, and direct parties to preserve evidence.
29. Effect of foreign awards 30. Conditions for enforcement of foreign awards	78. Recognition and enforcement of arbitral awards	The Act has specifically addressed the enforcement of both foreign and domestic arbitral awards. The Previous Act only mentioned enforcement of foreign awards.
N/A – No provision for the establishment of an Arbitration Centre	77. Establishment and Operation of Centre	The Act has established a new Tanzania Arbitration Centre and laid out its functions.

Part II: The Arbitration (Rules of Procedure) Regulations 2021

These Regulations replace the Arbitration Rules, G.N. No. 427 of 1957). They provide for the following:

• general conditions, notices and submissions;
• rules concerning commencement of arbitration;
• the composition and establishment of arbitral tribunals; and
• the conduct of arbitration and rules on awards and other decisions.

Part I provides for the interpretation of the Act. Parts II to VI provide for the general rules of procedure for arbitration.

Part II of the Regulations outlines the general conditions, notices and submissions regarding arbitration, stating that the Regulations form part of any arbitration agreement and that any dispute arising from the agreement must be settled in accordance with the Regulations; however, the parties are at liberty to agree otherwise.

The Regulations require the parties to a dispute who choose to be represented to submit  information concerning the prospective representatives to the Tanzania Arbitration Centre. Another interesting component is that a foreign expert or advocate in an arbitration is required to be accompanied by a local expert or advocate.

Part III of the Act provides for the rules on commencement of arbitration, which must be done through a request for arbitration submitted to the Centre in prescribed a form. The Secretary-General of the Centre  is mandated to determine whether the request is adequate and further has the discretion to elect to register it and assign a tribunal to determine the dispute. The arbitration is deemed to have commenced when the complete request for arbitration has been received.  

In line with Part IV of the Act, which provides for the composition and establishment of the arbitral tribunal, the Regulations impose the requirement that only arbitrators who are accredited or provisionally registered can be chosen by the parties. However, their selection is subject to the approval by the Tanzania Arbitration Centre. An exception is provided under Regulation 13(5), where the nature of the dispute requires an expert arbitrator who is not listed. Even in such circumstances, the arbitrator is required to be accredited or registered in accordance with the Reconciliation, Negotiation, Mediation and Arbitration (Practitioners Accreditation) Regulations, 2021.

Part V provides for the conduct of arbitration. Proceedings begin when the tribunal is constituted, and the Secretary-General of the Centre notifies the parties that all the arbitrators have accepted their appointment. An exception to this is provided under Regulation 38, which provides for emergency relief proceedings where a party may submit a request for interim relief before the tribunal has been established. The tribunal is at liberty to conduct the arbitration in any manner it considers appropriate, but guided by the principles of equality and the right to a fair hearing, and must make sure that the procedure is done with due expedition.

The place of arbitration is decided by the Centre; however, the tribunal is at liberty to conduct the hearings at any place it deems appropriate.

The proceedings commence with the first preparatory/first conference done within 15 days after the establishment of the tribunal. The purpose of the first conference, similarly to the first pre-trial settlement and scheduling conference in civil proceedings, is to organise and schedule the subsequent proceedings in a time and cost-efficient manner. It is crucial to highlight that a contention that the tribunal does not have jurisdiction can be raised not later than in the reply to the request, statement of defence or, with respect to a counterclaim or set-off arising in connection with the dispute, in the response to the counterclaim or set-off.

The claimant is given the power to revoke the arbitration where the tribunal has not issued an award. Where the respondent has submitted a statement of defence, the claimant would require his consent to revoke the claim. 

The final part of the Regulation provides for awards and other decisions. Under the Regulations, the tribunal is empowered to make four types of awards, passed based on legal stipulations, justice, and propriety.

These are:

• the final award;
• an interim award;
• an interlocutory award; and
• a partial award.

The parties are at liberty to choose the governing law of the dispute if the commercial agreement does not consist of it. This liberty is withdrawn if the parties cannot come to an agreement and the choice of governing law is then left to the tribunal. The final award, based upon the decision of the majority, is issued within 30 days of the conclusion of the hearings, but this time limit may be extended by the tribunal.

The Regulations give the Centre, the Board of the Centre, the Secretariat of the Centre, the Representatives of the Centre or the arbitrators immunity from liability to any person, arising from negligence, act or omission in connection with any arbitration. In the same spirit, the Regulations have provided for a bar of any action by any party or any arbitrator for defamation, libel, slander or any related complaint arising from the proceedings of the arbitration. The Regulations also exempt the Chairman, Vice-Chairman of the Centre, officers, employees or an arbitrator from acting as witnesses or expert in any arbitration.

The Regulations empower the Board to give a binding opinion in relation to questions arising from a contract, in the absence of a dispute. In the presence of a dispute, any decision that the Board gives relating to arbitration is final and binding upon the parties.

A foreign award shall, subject to the provisions of the Act, be enforceable in the High Court either by action or under the provisions of the Act. For a foreign award to be enforceable under the Act and the Regulations, it must comply with the conditions stipulated under Regulation 66(3)(a)-(f).

Another interesting feature is the Second Schedule to the Regulations, which provides for the ‘Arbitration Declaration Form’ that each arbitrator in a dispute is required to sign before or at the first session of the tribunal. According to regulation 29(3), not signing the declaration by the end of the first session of the tribunal is deemed at as an automatic resignation by the respective arbitrator.

COMPARATIVE ANALYSIS

It must be noted that the Previous Rules had a limited scope of application, limited to awards filed under the Arbitration Act Cap 15 R.E 2002. Therefore, this comparative analysis only compares the Previous Rules and the Regulations to the extent of the limited scope of the Previous Rules.

ARBITRATION RULES, G.N. NO. 427 OF 1957 (PREVIOUS RULES)	ARBITRATION (RULES OF PROCEDURE) REGULATIONS, 2021 (REGULATIONS)	COMMENTS
Section	Section
N/A – No provision for the definition of award	3. Definition of award	The Regulations provide for the definition of an award to include interim, partial or final award rendered by the Tribunal or the sole arbitrator. Although the scope of the Previous Rules was limited to awards under the Previous Act, it was not defined in it but in the Previous Act.
3. Scope	N/A – scope of application	The Regulations do not provide for a set limit for the scope of application, but the provisions are for the general rules of procedure for any arbitration under the Act and Regulations.
4. Registration of award	43. Final award       50. Implementation of award   51. Registration of award	The Regulations provide for the timeline within which the final award has to be given (30days from the conclusion of the hearing) and prescribes the form that the award should be in. The Regulations go further in providing that the implementation of the award must be without delay and allows for the tribunal to set a time limit for the implementation of the award and to impose penalties for failure, within the award. The award is sent for registration in the Court by the tribunal; however, the Regulations also allow a party to register the award, upon seeking leave from the tribunal. The Previous Rules did not give a timeline within which the award is to be given and neither did it expressly allow a party to the arbitration to register it.
1. Mode of application 2. Title of applications 3. Contents of petition and special case 4. Annexures to petition 5. Persons on whom notice to be served to be specified 6. Notice on persons specified and others	63. Mode of application to court	Both the Previous Rules and the Regulations provide that application to Court is to be done by way of petition, and prescribe the contents of the petition, service of notice.
11. Stay of proceedings	N/A – no provision regarding stay of proceedings	The Regulations do not provide for the power of the magistrate or judge presiding over the application to stay the proceedings as the Previous Rules did.
12. Fees	First Schedule   54. Allocation of arbitration Costs   55. Cost of Arbitration   56. Legal Service Fees	The Regulations provide for the costs of arbitration that are at a fixed rate and are allocated by the tribunal. In general, where one party is fully successful, the other party shall bear the costs; and where each party is partially successful the costs will be allocated in accordance with the proportion of success of the claim of each party. Except in extraordinary circumstances, the costs of legal representation of each party shall be borne by the party contracting such legal representation and will not be assessed against the other party.

Part III: The Tanzania Arbitration Centre (Management and Operations) Regulations, 2021

The  Management and Operations Regulations govern the general management and operations of the Tanzania Arbitration Centre, as per section 90(2)(d) of the Act.

The Regulations provide for the organ0szational structure of the Centre, which is comprised of the Board of Directors, the Secretariat and Standing Committees. The Board consists of the Chairman and six other members, one of whom is the Vice-Chairman as appointed by all the Board members. The responsibilities of the Board include, among other things:

• advising the Minister for Constitutional and Legal Affairs (on matters concerning arbitration;
• appointing members of the arbitration council and advisory council;
• following up on the implementation of the general and specific policy guidelines issued by the Minister of the Centre; and
• taking all necessary steps conducive to attain the objectives of the Centre.

The Secretariat is headed by the Secretary-General whose functions include, among other things:

• being Secretary of the Board;
• keeping records of the Centre;
• representing the Centre in legal matters; and
• performing such other duties as may be assigned to him.

The Standing Committees are appointed from time to time by the Board for better carrying out of their responsibilities.

Part IV: The Code of Conduct for Reconciliators, Negotiators, Mediators and Arbitrators, Regulations, 2021

The Code of Conduct is made under the Civil Procedure Code [CAP. 33 R. E. 2002].

It establishes a code of conduct and practice which applies to reconciliators, negotiators, mediators and arbitrators, and serves as a guidance to practitioners in the performance of their professional responsibilities, duties and acceptable behaviours. The Code of Conduct is intended to assist them in attaining the desired level of conduct with a view to ensuring the integrity of the reconciliation, negotiation, mediation, adjudication or arbitration process and the utility of the process as part of dispute resolution.

Breach of the code constitutes professional misconduct and is punishable by disciplinary action which may include deregistration, a written warning, requirement to compensate the complainant for loss incurred or other appropriate measures.

Complaints over misconduct may be made by a person who is aggrieved by the conduct of a reconciliator, negotiator, mediator or arbitrator. This is done by lodging a complaint with the Registrar (appointed by the Ministry of Constitutional and Legal Affairs in the prescribed form, supported by any other documents or information as proof of the alleged complaint. Disciplinary proceedings may also be commenced by the Registrar and the Accreditation Panel on their own motion.

A person who is aggrieved by the decision of the Accreditation Panel may, within 21 days from the date of receipt of the decision, appeal against the decision to the Minister.

Part V: Reconciliation, Negotiation, Mediation and Arbitration (Practitioners Accreditation) Regulations, 2021

The Accreditation Regulations are made under the Civil Procedure Code

They  provide for the criteria for accreditation and the accreditation process for a reconciliator, negotiator, mediator, or arbitrator.

The Accreditation Panel is composed of seven members, including:

• the Attorney General (as the Chairman);
• the Solicitor General;
• the Chairman of the Board of the Centre;
• the President of the Tanzania Institute of Arbitrators;
• the President of the Tanganyika Law Society; and
• one representative of the National Construction Council and the Public Procurement Regulatory Authority.

The Accreditation Regulations provide for criteria for registration as a reconciliator, negotiator or mediator to include, among other things:

• a minimum of five years’ experience of amicably settling disputes in the community;
• a minimum of five years’ experience as a practising advocate; and
• not been found guilty of an offence involving professional misconduct.

The criteria for accreditation for an arbitrator is different and requires a person to have, among other things:

• qualifications to be appointed as a Judge of the High Court; and
• experience of at least five years in panels and tribunals that settle disputes at national or international level.

The Accreditation Regulations also allow for the accreditation for foreigners.

Pursuant to the Regulations, applications for accreditations are made to the Registrar in the prescribed form and supported by necessary documents. After receiving the applications, the Registrar is empowered to determine whether the same is complete. After scrutinising the applications and reaching a decision that an application is complete. The Registrar is required to forward the applications to the Accreditation Panel for determination.

The determination of the application by the Accreditation Panel is then communicated to the applicant by the Registrar. Under the Regulations, a successful applicant will be issued with a certificate of accreditation which is valid for a period of two years. It is worth highlighting that a breach of the terms and conditions of the certificate of accreditation is a ground for the suspension of the certificate.

Lastly, where an applicant is not satisfied with the decision of the Accreditation Panel or Registrar, the applicant may, within21 days from the date of receipt of the decision, appeal against the decision to the Minister of Constitutional and Legal Affairs.