TANZANIA HAS ENACTED THE NEW ARBITRATION ACT, 2020

The article highlights key issues addressed in the Arbitration Act, 2020.
-The Act has expressly defined “domestic commercial arbitration” and “International Commercial Arbitration.
– The Act has addressed the Enforcement of arbitral awards (foreign and domestic)
– The Act provides for Mandatory provisions which must be adhered by the Parties irrespective as to whether they are provided for in the Arbitration Agreement or not
– The Establishment of the new Tanzania Arbitration Center

The ongoing efforts of legal reforms in Tanzania to embrace arbitration have led to the government to replace the existing Arbitration Act, Cap 15 R.E. 2002.
The Act contains consequential amendments which include the amendments to the Criminal Procedure Act Cap. 20, the Civil Procedure Code Cap. 33, the Natural Wealth and Resources (Permanent Sovereignty) Act, Cap. 449 and the Public-Private Partnership Act, Cap. 103. Also owing to the September 2018 amendments of the PPP Act, the bill has accommodated the amendment that the law, institutions, and sitting in dispute resolution catering for arbitration be from Tanzania.

The New Tanzania Arbitration law seeks to incorporate international arbitration and enforcement of foreign arbitral awards, this is reflected in the long citation of the Act which has been cited as ’’Act to provide for conduct relating to domestic commercial arbitration, international commercial arbitration and enforcement of foreign arbitral awards, repeal of the Arbitration Act and to provide for matters relating to or incidental thereto.’’However the Act does not just end here, it goes the extra mile to define both domestic and international commercial arbitration thus leaving no room for ambiguity.

Further, the Arbitration Act clearly articulates enforcement of both domestic and international arbitral awards and provides for the prerequisites of enforcement of the Arbitral Award. It is also noteworthy that the law clearly provides what may lead an arbitral award to not be recognized in Tanzania. These factors range from the composition of the arbitral tribunal or the arbitral procedure not aligning with the parties’ agreement or the agreement not being in accordance with the law of the jurisdiction that arbitration took place. Other factors in relation to foreign arbitral awards include, the arbitral award has not yet become binding on the parties or has been set aside or suspended by a court of the state in which, or under the law of which, that arbitral award was made, the making of the arbitral award was induced or affected by fraud, bribery, corruption or undue influence; and that the enforcement of the award would be contrary to the public policy of Mainland Tanzania.

The most notable and interesting feature is that the Act introduced and created the Tanzania Arbitration Centre which will foster the conduction and management of arbitrations as well as accreditation of arbitrators in Tanzania.

Furthermore, under the first schedule, the act has itemized mandatory Equally provisions that must be adhered to by the parties notwithstanding any agreement to the contrary

In a nutshell, the Acts seeks to propel and foster the use of arbitration and make it central to the dispute resolution mechanism in Tanzania. This move by the government is very commendable and has come at the right time when Tanzania is transforming to a middle-income economy with industrialization as its driving force.