Post-Arbitration Stages IN TANZANIA

APPRAISAL OF RECOGNITION AND ENFORCEMENT OF ARBITRATION AWARD IN TANZANIA

BY ISAKA KABUJE[1]

Before I deliberate about the Post-Arbitration stages, I find it pertinent to begin my analysis from a conceptual understanding of what Award is, what arbitration is, what registration/recognition, and enforcement of an arbitral award are all about and finally what does the law say on these matters.

Award

Is defined under Section 3 of the Arbitration Act, to mean “a decision of the arbitral tribunal on the substance of the dispute and includes any interim or interlocutory decision.

Generally, an arbitral process is private in nature. It is premised on the agreement between the parties to have their dispute(s) resolved, not by way of litigation in a Court of law, but by reference to an arbitral tribunal of their choice or preference. The outcome of the process is an award which has a binding effect on the parties.

It is, however, worth noting as well, that, an award may be termed “partial”, meaning that, although the parties may still have issues to be determined, the partial award issued by the tribunal has conclusively determined a particular issue and, hence, has some form of finality and binding effects on the parties in respect of that issue . But if it is a merely “provisional award” it may lack such conclusiveness and binding efects , hence, cannot be “recognised”.

Arbitration,

In the book titled Alternative Dispute Resolution (ADR) in Tanzania Law And Practice,[2] stated at page 74, that, Arbitration may be defined as; a mechanism for resolution of civil disputes which takes place, usually in private, pursuant to an agreement between the parties to the dispute, under which the parties agree to be bound by the decision to be given by the arbitrator according to law, after a fair hearing, such decision being enforceable at law. Under the common law, there is an older version of the denition of arbitration that was made in 1850’s by Ramilly, M.R., in Collins v Collins,[3] to the? fact that: ‘‘An arbitration is a reference to the decision of one or more persons, either with or without an umpire, of some matter or matters in difference between the parties.’’

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Recognition/Registration,

In the book titled Redfern and Hunter on International Arbitration,[4] stated, at page 611, that, ‘ recognition of award’ entails a process where a party to an award asks the court to “ recognize an award as valid and binding upon the parties in respect of the issues with which it dealt”. This entails a process of registering the award in the Court of law, so that it can be termed as decree of the court hence enforceable through execution.

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Enforcement,

Enforcement of an a ward, entails a process during which the court ensures that the award “which it had recognised” “is carried out, by using legal sanctions as are available”. Enforcement of awards , therefore, involves the act of converting the award into concrete relief for the claimant up which she/he can ably rely upon to commence execution proceedings. This process, therefore , is regarded as a step further than “ recognition of the award. This as per the case of The Higher Education Students’ Loans Board and Tanzania Building Works Limited,[5]

THE GOVERNING LAWS ARE;

The Arbitration Act,[6] and the Arbitration (Rules of Procedure) Regulations,[7] which are still new and not much has been said in terms of their provisions and their application. Bringing clarity to their provisions will be a helpful exercise for legal theory and practice.

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PROCEDURAL STEPS ON ENFORCEMENT OF AWARDS

According to Dr. Mashamba there are three procedural steps of enforcement of award;

1.??? Filing the Award in Court,

2.??? Registration of the Award, and

3.??? Rendering the award a decree of the court

4.??? Execution of the decree emanated from the award.

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POST-ARBITRATION STAGES

According to the cases of Attorney General vs, Ayoubfarid Michael Saab,[8] and The Higher Education Students’ Loans Board and Tanzania Building Works Limited,[9] the High Court through Nangela J, stated three procedural steps of enforcement of award which are;

1.??? Recognition,

2.??? Enforcement and,

3.??? Execution.

FIRST STAGE: RECOGNITION/REGISTRSTION OF AWARD

Normally, where a party who is required to satisfy the award fails to voluntarily satisfy it, usually the other party will proceed to the court with a view to have it registered/recognised as binding and enforceable as would be a judgment or order of the court. In our jurisdiction, however, all that will be done in a staged process. From a legal point of view, there are , in essence, two main substantive provisions which will apply to that process. These are secti on 73 and section 83 of the Arbitration Act.

Section 83 (1) of the Arbitration Act, provides as follows :

“Upon application in writing to the court, a domestic arbitral award…shall be recognised as binding and enforceable.”

In my view, the gist of section 83 (1) of the Act is that “recognition of an award” as binding and enforceable. In our Arbitration Act, however, the law does not define what amounts to “ recognition of award”. In the book titled Redfern and Hunter on International Arbitration, 6th ed., Oxford University Press, 2015, Blackaby, N., et al, stated, on page 611, that, ‘ recognition of award’ entails a process where a party to an award asks the court to “ recognize an award as valid and binding upon the parties in respect of the issues with which it dealt. ”

Recognition of awards, therefore, is the first pre-requisite of the three final post-arbitration stages in case an award is not voluntarily executed. The other two subsequent stages after recognition are enforcement of the award and execution of the decree emanating from that enforcement process.

WAYS OF FILING AWARD IN COURT FOR RECOGNITION/REGISTRATION

Filing of the award entail presenting the Award before the court by any means, opening a file and assigning it a registration number as the registry officers would ordinarily do. Filing is done, through a LETTER.

In the case of Attorney General vs, Ayoub Farid Michael Saab,[10] the Court held that, “The manner of bringing such an award to the attention of the court is therefore provided for under Rule 51 (4) and/or 51 (5) of the Regulations and, a mere transmittal letter suffices as an application to the court. In that circumstance, there will be no need for a petition under Regulation 63 (1) and even that regulation does recognise there being possibilities of bringing applications to the court by other means other than by way of a “petition.”

See the wording of Regulation 63(1) “Save as is otherwise provided, all applications made under the provisions of the Act or these Regulation shall:….“

The letter should be annexed with proceedings of the arbitral tribunal, the question is, what constitute ‘proceedings’ in arbitral tribunal? According to Black’s Law Dictionary,[11] the term “proceeding” is defned as: “The regular and orderly progression of a lawsuit, including all acts and events between the time of commenc ement and entry of judgement ... ‘Proceeding’ is a word much used to express the business done in courts…but it may include in its general sense all steps taken or measures adopted in prosecution or defence of an action, including the pleadings and judgement….”

Considering the above quotation in light of what the law provides in our jurisdiction, it is clear that, where a Petitioner seeks that an award be “recognised” by the court and be “enforced” as would be a decree of the court, then, the application must be brought under section 83 (1) and 73 (1) of the Act, read together with the relevant provisions of the Arbitration (Rules of Procedure) Regulations, 2021, and , such relevant provisions of the Regulations will depend on whether the award is a “domestic” or “foreign” award .

For clarity, sections 83(1) and 73(1) of the Act are to be read together with the relevant regulations and such are to appear on the citation of enabling provisions under which the award caused to be filed in Court is based. Such provisions may be Regulation 51(4) or 51(5) (depending on who caused the award to be filed in court) and Regulation 66 (in respect of foreign award).

In case the filing was made by way of a Petition under Regulation 63 (1) of the Arbitration (Rules of Procedure ) Regulations, the relevant sections of the law should as well be cited, i.e., section 83 (1 ) and 73 (1) of the Act.

According to the case of The Higher Education Students’ Loans Board and Tanzania Building Works Limited,[12] the Court held that, “An award is first “recognised” before it is “enforced.” And it is to be recognised by the court where it is filed as having the status of being “final” and “binding” on the parties. This is essentially the case because; in effect, an award may be “provisional” and, hence, not binding on the parties yet.”

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§? Who may cause the award to be filed /registered in Court?

Arbitrator or the Parties,

The ?Arbitrator or any of the parties may cause the award to be filed/registered in court. This position does not differ from the previous position under the Repealed Arbitration Act, Cap.15 R.E 2002 and its Arbitration Rule, 1957.

In fact, Regulation 51 (4) of the Arbitration (Rules of Procedure) Regulations, 2021, is to a large extent identical to what section 11 (2) of the Repealed Arbitration Act, Cap.15 R.E 2002 used to provide.

In that regard, it may be confidently stated , therefore, that, the position stated by the Court o f Appeal in the case of Tanzania Cotton Marketing Board vs. Cogecot Cotton Company SA,[13] regarding who may file the award still holds even under the current arbitration landscape. It may be the tribunal causing it to be filed by someone else as the case was here under Regulation 51 (5), or a party or a person claiming under him.

Moreover, in the case of Voltalia Portugal S.A. v. Nextgen Solawazi Ltd.,[14]. The Court held that, “Under both the repealed and current arbitration laws, there are two alternative ways of filing the award in court for registration:

1)??? The arbitral tribunal, at the request of any party to the award or any person claiming under him is obliged to cause to be filed in court an arbitral award for registration as a court decree [s. 12(2) of the repealed law; and Regulation 51(4) of GN. No. 146/2021]; or

2)??? The arbitral tribunal may in the letter transmitting the award to the parties, allow any party to the proceedings to file a certified copy of the award together with the proceedings thereof with the court for the purposes of registration of the same [Regulation 51(5) of GN. No. 146/2021].”

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§? Time limit for filing an arbitral award

In Kigoma/Ujiji Municipal Council v.?Nyakirang’ani & Construction Ltd.,[15]?Period of limitation for filing an award procured through arbitration without intervention of the Court is six months (see para. 18 of part III of the Law of Limitation Act,[16]

However, a party may apply for extension of time to for registering an arbitral award out of time upon sufficient cause - Claus Bremer Associates Ltd. v. The Office of Chief Court Administrator, Judiciary of Tanzania,[17] Lyamuya Construction Company Ltd. v. Board of Registered Trustees of Young Women’s Christian Association of Tanzania,[18]

NB: Financial constraint is not a sufficient ground for extension of time to file an arbitral award out of time. See the cases of (Wambele Mtimwa Shahame v. Mohamed Hamis, CAT, Civil Ref. No. 8/2016 (Unreported); Yusufu Same & Another v. Hadija Yusufu, Civil Appeal No. 1/2002 (Unreported); and Zabitis Kawuka v. Abdul Karim, (EACA) Civil Appeal No. A8/1937).

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NOTICE TO THE PARTIES AFTER FILING AWARD IN COURT

According to Regulation 51(6) provides that, “Once the award is filed in court under this regulation, the courts shall issue a notice to the parties and the Center on the existence of the award and require the parties to the notice to show cause as to why the award should not be registered and enforced pursuant to the provisions of section 68 of the Act.”

The notice issued to the parties by the Registrar of the court serves two purposes: one is to inform them of the existence of the award filed in court and two, invite them to show cause why it should not (i) be registered/recognised or refused registration and (ii) (if no refusal to register) why the court should proceed to enforce under section 73 of the Act.

HOW TO CHALLENGE RECOGNITION OF AWARD

The recognition of award can be challenged by blocking the same to be recognized, a party wishes to block such ‘recognition’ she/he is at liberty to do so under section 83(2) of the Act (for a domestic award) or section 83 (4) and (5) of the Act (for a foreign award). The law is also clear as to when such a party may do so. She or he may do so at the time when she/he appears to show cause following a summons issued under Regulation 51 (6) of the Regulations.

Thus she/he may make an oral or written application to the court as per Regulation 51(7) of the Regulations. In case of written, that is when application of Regulation 63(1) of the Regulations occurs, it calls for an application in the form of “a petition” to be filed in court.

However, if nothing was raised to block the award from being recognized as “ final, valid, and binding ” on the parties and, hence, enforceable, then the enforcement of the award will proceed under section 73 (1) of the Act provided th at the legal requirements relating to enforcement of the award are taken into account.

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SECOND STAGE: ENFORCEMENT

PROCEDURAL STEPS ON ENFORCEMENT OF AWARDS

According to Dr. Mashamba there are three procedural steps of enforcement of award;

5.??? Filing the Award in Court,

6.??? Registration of the Award, and

7.??? Rendering the award a decree of the court

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Under the Arbitration Act, the section 73 deals with enforcement of an award. The section provides as follows: “(1) An award made by the arbitral tribunal pursuant to an arbitration agreement may, by leave of the court, be enforced in the same manner as a judgment or order of the court.” (2) Where leave of the court is given, judgment may be entered in terms of an award. (3) Save as otherwise provided, leave to enforce an award shall not be given where, or to the extent that, the person against whom it is sought to be enforced shows that the arbitral tribunal lacked substantive jurisdiction to make the award.”

It is worth noting , however, that, the Arbitration Act does not , as well, define what “ enforcement of award ” means. Even so , enforcement of an a ward entails a process during which the court ensures that the award “ which it had recognised ” “ is carried out, by using legal sanctions as are available”. Enforcement of awards , therefore, involves the act of converting the award into concrete relief for the claimant up which she/he can ably rely upon to commence execution proceedings. This process, therefore , is regarded as a step further than “ recognition of the award ” .

Even so, as Blackaby N, et al (supra) stated, it is worth noting that:

“A court that is prepared to grant enforcement of an award will do so because it recognises the award as validly made and binding upon the parties to it, and therefore suitable for enforcement. In this context, the terms ‘recognition’ and ‘enforcement’ do run together: one is a necessary part of the other”.

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§? To enforce the arbitral award is not automatic

The process of ensuring that an award is enforced as would be a judgement or order of the court, “is not automatic”. Section 73 (1) of the Act makes it clear that, the Claimant seeking for its enforcement as would be a judgement or order of the court “must obtain the leave of the Court” when she/he intends to go to that extent.

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HOW LEAVE IS OBTAINED

The leave to enforce an award can be obtained ORALLY or in WRITTEN.

According to Regulation 51(7) of the Arbitration (Rules of Procedure) Regulations, such leave of the court may be obtained from the court, either orally (oral application before the court) or by way of a formal application. If leave is to be sought by way of “a formal application”? it means there must be adherence to Regulation 63(1) which calls for an application in the form of “a petition” to be filed in court .

It is worth noting, however, that, once such leave is granted, section 73(2) provides that, judgement may be “entered in terms of the award”. This phrase “entered in terms of the award” does essentially mean that, what will be entered as a judgment or order of the court is not the entire arbitral award but “only the dispositive portion of the award” . See for instance the case of Siemens Industry Software Gmbh & Co Kg (Germany) (formerly known as Innotec Gmbh) v s. Jacob and Toralf Consulting Sdn Bhd (formerly known as Innotec Asia Pacifc Sdn Bhd) (Malaysia) & Ors.)[19] where the Federal Court held as here below :

“… the practice in the other jurisdictions serves as a good guidance and in this regard, suffice if we refer to the English cases of Caucedo Investments Inc and Another v s. Saipem SA [2013] EWHC 3375 (TCC) and LR Aivonics Technologies Limited vs. The Federal Republic of Nigeria & Anor [2016] EWHC 1761. These cases disclosed that the exercise of registering an arbitral award for recognition and enforcement of the same, was aimed only at entering the dispositive portion of the arbitral award. What was recognised and enforced and registered as a judgment of the court was that part of the award ordering the defendant to pay the sums awarded to the plaintif.”

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TO CHALLENGE THE ENFORCEMENT OF AWARD

Enforcement of the award may only be challenged based on either section 74 or section 75 of the Act. As regards the granting of leave, the law does require that, leave should not be granted unless the court is clear that the party against whom the award is sought to be enforced intends to challenge the substantive jurisdiction of the tribunal which made or issued the respective award, see Section 73 (3) of the Arbitration Act, which I cited here above is very clear on that and the challenge will only be in relation to substantive jurisdiction of the tribunal. In such a scenario, it follows, therefore that, the court will have to “ halt ” or rather “ stay the application for leave to enforce” (i.e., leave to have the award be entered as judgement or order of the court ) and proceed to hear and determine the other party’s concern regarding the substantive jurisdiction of the arbitral tribunal.

As the architecture of the law indicates, such a jurisdictional challenge will be brought separately under section 74 (1) (a) or (b) of the Arbitration Act. According to section 74 (1) (a) or (b) of the Act, the law provides that, a challenge based on substantive jurisdiction , is to be brought before the court “by way of an application” . In my view, this will again be an application which will procedurally attract adherence to what Regulation 63 (1) (a) to (e) of the Arbitration (Rules of Procedure) Regulations, provides .

Regulation 63 (1) (a) of the Regulations provides as follows : “63(1) ( Save s is otherwise provided, all applications made under the provisions of the Act, or these Regulation shall: (a) be made by way of petition and be titled “In the matter of Arbitration and in the Matter of Arbitration Act” and reference shall be made in the application to the relevant section of the Act.”

As Regulation 63 (1) (a) provides hereabove the party opposing the granting of leave to enforce must file a petition in the manner provided for under Regulation 63(1) save as it may have been provided otherwise.

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THIRD STAGE:

EXECUTION OF THE DECREE EMANATING FROM THAT ENFORCEMENT PROCESS AWARD

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Execution under this stage applies the same as a normal civil case as per Order XXI the Civil Procedure Code,[20] since the award has already changed to be the judgment of the Court after its recognition or registration.

[1] ADVOCATE CANDIDATE, LST, LL B Hons. MU.

[2] Mashamba.J.C., (2013) Mkuki na Nyota Publishers: Dar es Salaam.

[3] (1858) 26 Beav. 306, 312 reported in English cases at 916–919.

[4] 6th ed., Oxford University Press, 2015, Blackaby, N., et al,

[5] Misc. Commercial Cause.39 of 2022.

[6] Cap.15 R.E 2020

[7] GN.146 of 2021

[8] Miscellaneous Commercial Cause No. 6 of 2023, HCT DSM

[9] Misc. Commercial Cause.39 of 2022.

[10] Miscellaneous Commercial Cause No. 6 of 2023, HCT DSM

[11] 10th ed., page 1398

[12] supra.

[13] [1997] TLR 165

[14] Misc. Commercial Cause No. 7/ 2020: High Court of Tanzania (Commercial Division)

[15] Misc. Commercial Cause No 239/2015: High Court of Tanzania (Commercial Division) at Dar es Salaam (Unreported)

[16] Cap 89 of the Revised Edition, 2019)

[17] Misc. Commercial Application No. 50/2020: High Court of Tanzania (Commercial Court) (Unreported);

[18]Civil Appl. No. 2/2010, (CAT) (Unreported).

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[19] ?[2020] MLJU 363 (unreported

[20] [Cap 33 R. E 2019]