Strength

1.0 ESTABLISHMENT OF TAC Before the promulgation of the new arbitration law, Tanzania
had two renowned arbitral institutions, namely, the Tanzania Institute of Arbitrators (TIArb)
and the National Construction Council (NCC). The former was a registered entity under the
Societies Act,53 whereas the NCC is a statutory institution established under the NCC
Act.54 Under the new law, a new institution is established and is designated as the TAC.55
The Centre’s funds consist of fees and charges from users of the services of the Centre,
contributions from regional and international stakeholders, allocation from government and
any other lawful source of funding. Based on its statutory mandates, the Centre will have an
influential role in the arbitration landscape in Tanzania. The main functions of the Centre are
to conduct and manage arbitration proceedings; registration and maintenance of the list of .
Such improvements stand in sharp contrast with the current practice whereby it was possible
for the disputants to pick any arbitrator of their choice, in some cases some-one whose
professional credentials were yet to be certified, which has resulted in mounting complaints
regarding the quality of the arbitral process and of the awards.

2.0 Meaning of the Arbitration Agreement The legal profession is a field

extremelyobsessedwith semantic clarity and precision of meanings. No wonder, therefore,
that the Act has sought to define the phrase ‘arbitration agreement’,whichsomemay
findtobeanoncontentious issue. However, for clarity purposes, it was deemed crucial to
define what is meant by the term ‘arbitration agreement’ in the context of arbitral
proceedings in Tanzania. Thus, inthenewarbitration legislation, the term ‘arbitration
agreement’ is defined as ‘an agreement by the parties to submit [to arbitration] all or certain
disputes which have arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not’.62 The agreement must be in writing, whether or
not it is signed by the parties.63 The meaning of the term ‘writing’ is wide and inclusive; it
includes agreements made by way of exchange of communications in writing, or an
agreement evidenced in writing in any retrievable format. Also, a mere reference to
arbitration in a clause of a contract constitutes an arbitration agreement if the reference is
drafted in such a way that theclause forms part of thearbitration agreement.64 Furthermore,
the new arbitration law has recognized the principle of separability and distinctiveness of
the arbitration agreement fromthemain agreement of the parties. This means that the
arbitration agreement will remain valid even where the main agreement is invalid or
ineffective or has not come into existence.

3.0 Powers of the Court

In the end, for effective enforcement of arbitral orders and awards, it is inevitable that the
parties would need the assistance of the court. Therefore, it was important to define what is
meant by the term ‘court’ and set out its statutory powers for the purposes of arbitral
proceedings. Under the new law, the term ‘court’ is now flexibly defined in two categories:
(1) in relation to domestic arbitration: to include the District Court, Resident Magistrate’s
Court, High Court of Tanzania exercising its original or appellate jurisdiction and the Court
of Appeal, where jurisdiction is determined as per the Magistrates Court Act and any other
written law; (2) in relation to international arbitration, ‘court’ means the High Court of
Tanzania in the exercise of its ordinary original civil jurisdiction.69 In terms of the powers
in support of arbitration, the courts have the authority: to refer parties to an arbitration
agreement to arbitration70; to stay suit in court pending reference of the dispute to
arbitration71; to assist in the appointment of arbitrators, if so required, and to remove or
revoke the appointment of the arbitrator72; and to issue preservatory orders or injunctions
pending finalization of arbitration.73 The court is also empowered to enforce interim
orders/provisional awards of arbitral tribunal74; to issue summons to witnesses and call
parties75; to extend time limits set out by the parties in the arbitration agreement for
commencing an arbitration76; to hear appeals on jurisdiction and other related matters

Weakness
1. STAY OF SUIT PROCEEDINGS IN COURTS Where a suit has been filed in court in
contravention of an arbitration clause, the aggrieved party has a right to move the court
for an order of stay pending exhaustion of the arbitral remedy.113 However, subsection
15(3) of the Arbitration Act, 2020 raises a controversy by introducing a condition (which
seemingly defeats legal common sense) by requiring the applicant to have filed a written
statement of defence or have taken a step in the proceedings before applying for a stay
of proceedings. The new subsection provides that a person shall not make an application
for stay of suit under this section unless he has taken appropriate procedural steps to
acknowledge the legal proceedings against him or he has taken steps in those
proceedings to answer the substantive claim.114 This means parties can now be
entrenched deep into legal proceedings in a court of law only for either of party at a later
stage to change its mind and request a stay of proceedings. In contrast (and what is
therefore seen as a departure from the previous practice), under the repealed law the
position was that a person could not apply for a stay of suit if he had already filed a
defence or had taken a step in the proceedings– he was deemed to have waived his right
to opt for arbitration. The law is also conspicuously silent as to the consequences of an
order for stay of proceedings. For instance, it is not clear who has an obligation to
commence the arbitral proceedings after issuance of the stay order. Even more
precarious, it is not clear what will happen to the stayed proceedings if such proceedings
are not commenced by the offended party or either party. Are the proceedings
permanently stayed? This has been a source of serious contention under the old
arbitration regime, as demonstrated in DB Shapriya Ltd v. Yara Tanzania Ltd,115 where
the court ruled that: So to conclude and clarify on the issue of who between the Plaintiff
and the Defendant had an obligation of initiating arbitration process before and even
after the court order the court finds as explained above, the answer is both parties are
under joint obligation to initiate and pursue arbitration process. None of the parties may
 shift the obligation stated in the arbitration clause to the other. Bearing in mind that the
court offered 30 days to both parties and each party has explained to the court that he did
not take any initiative to initiate arbitration process, because [he] was thinking that it is
the responsibility of the other, and then it is obvious the initiative was not taken.116 The
court concluded that parties were not interested in going to arbitration as per their
contract clause, and held that it had no reason to stay the hearing of the application for
an order of temporary injunction and commencement of the main suit. It is difficult to
imagine the respondent suing himself (in order to commence an arbitration) without
necessarily have claims against the plaintiff (who has claims but infringed the arbitration
clause by filing a court case). In view of the silence in the new arbitration law on who is
responsible for initiating arbitration after an order of stay of the suit, the paradox is
likely to continue to persist unless these provisions are reconciled.
2. INDEPENDENCE OF ARBITRATORS One crucial aspect of the arbitration framework
requires that it should be free from any form of interference and threat from the organs
of government. This is much more pertinent based on the reality that, in most
arbitrations, one of the parties is the Government. Dismayingly, under the new
Arbitration Act, arbitrators are subjected not only to a strenuous accreditation process
but also periodic renewal of their certificates of accreditation presided over by the
Committee established by the Government. This, in our view, presents a potential threat
to arbitrators that their accreditation may not be renewed if they have a record of ruling
against the Government. This threat becomes more apparent when one looks at the
composition of the accreditation panel, which has a heavy presence of government
officials.123 Since the Government is a significant consumer of arbitration services, and,
in all cases, it appears through the Attorney General and the Solicitor General, and since
the latter are also aggrieved or likely to be aggrieved by many awards, there is a
justifiable fear that some arbitrators may be refused accreditation o