AZANIA BANK LTD ANOTHER VS GRILL HOUSE LTD 4 OTHERS COMM CASE NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL CASE NO. 103 OF 2023 AZANIA BANK LIMITED...................................................................1st PLAINTIFF THE ATTORNEY GENERAL............................................................... 2nd PLAINTIFF VERSUS GRILL HOUSE LIMITED...........................................................................................1stDEFENDAN INTRINSIC SYNERGIES TANZANIA LIMITED..................................................... 2ndDEFENDAN CAPE TOWN FISH MARKET LIMITED................................................................... 3rdDEFENDAN KEVEN STANDER..................................................................................................... 4thDEFENDAN YASMINE HAJI......................................................................................................... 5thDEFENDAN RULING Date of Last Order: 25/06/2024 Date of Ruling: 12/07/2024 GONZI, J. The 1st Plaintiff instituted the present suit against the Defendants seeking recovery of a total sum of USD. 612,143.90 and TZS. 1,079,603,783.86 being the outstanding loan amount as of 17th May 2023 which remains unpaid in respect of the Credit Facility granted to the 1st Defendant by the defunct Bank M Tanzania PLC for the purpose of setting i up a steak house restaurant. In addition, the 1st Plaintiff sought orders for payment of interest computed at the agreed rate of 24% per annum on the outstanding amount and for payment of general damages suffered by the Plaintiffs for loss of business and other resultant losses. On 15th January 2019, through the Bank of Tanzania (BoT) Public Notice, the 1st Plaintiff became the assignee of all assets and liabilities of the defunct Bank M Tanzania PLC. As an assigned of Bank M Tanzania PLC, the 1st Plaintiff embarked on recovering all the outstanding debts owed to Bank M Tanzania PLC. This suit, therefore, was filed in the course of collecting the assets of Bank M Tanzania PLC in the exercise of the mandate granted upon the 1st Plaintiff by the Bank of Tanzania in accordance with the law and as per the above said Public Notice. According to paragraph 2 of the Plaint, the 2nd Plaintiff has been joined as a Co-Plaintiff as a necessary party. The second Plaintiff is suing together with the 1st Plaintiff by virtue of being the Chief Legal Advisor to the Government of the United Republic of Tanzania on all legal matters and the guardian of the properties of the Government together with its institutions. The Plaint shows that on 11th May 2016, the 1st Defendant applied for a term loan of USD 825,000.00 from Bank M Tanzania PLC for a tenor of 3 years and 6 months. On the same day, the 11th day of May 2016, Bank M Tanzania PLC disbursed TZS 1,514,970,600.00 which was deposited into TZS Bank Account of the 1st Defendant maintained at Bank M Tanzania PLC, Kisutu Branch, Dar es Salaam and the amount was converted into USD 2 688,623.00 which was deposited in the USD Account of the 1st Defendant maintained at the same Bank and branch. Five days later, on 16th May 2016, the 1st Defendant and Bank M Tanzania PLC signed an offer letter to signify a contract for the said loan disbursed on 11th May 2016. The Credit Facility letter of 16th May 2016 was secured by first legal mortgage over a Certificate of Title of a piece of land located at Msasani, Dar es Saalam to which the 2nd Defendant has interest in the form of a lease. Another security was a first legal mortgage over a piece of land at Msasani Village, Dar es Salaam over which the 5th Defendant has interest in the form of a lease. The other security was a debenture charge over all fixed and floating assets of the first and second Defendants Companies. The credit facility was also secured by assignment of lease rentals of the 2nd defendant and the personal guarantees of the 3rd and the 4th Defendants as well as corporate guarantee of the 2nd Defendant. The 2nd, 3rd, 4th and 5th Defendants were also sued in respect of their personal guarantees for the credit facility advanced by Bank M Tanzania PLC on 11th May 2016 and on other dates subsequent thereafter up to and inclusive of 28th February 2018. Upon being sued, all the defendants refuted the claims. The case proceeded through the normal stages up to a point when all parties had filed their witness statements and it was due for oral testimonies by cross examination of the parties' witnesses. Before oral testimonies could start, the Court raised an issue suo mottu probing both sides to address the Court on the propriety of the Plaintiffs' move to institute the present suit directly in Court instead of referring the same to arbitration as required by their 3 agreement. This preliminary point of law was raised on the basis of the contractual provisions suggesting that parties to the present dispute were supposed to refer the matter to arbitration rather than Court litigation. Clause 8 of Annexture II to the Banking Facility provides as follows: " Governing Law and Jurisdiction 1) This Agreement shall be governed by and construed in accordance with laws of Tanzania. 2) Any dispute, controversy or claim arising out of this Agreement should be settled by arbitration in accordance with the Arbitration Act (Cap 15 RE 2000). " Clause 13 of Annexture I to the Banking Facility provides that: "Governing Laws This letter of Offer shall be governed by and construed in accordance with the Laws of Tanzania. The borrower irrevocably submits to the jurisdiction of Tanzanian Courts" The other preliminary point of law that the Court raised suo mottu was that the Witness Statements for the Plaintiff had not been served upon the 4th Defendant despite Court's earlier directives to that effect and yet the Plaintiffs had not sought an extension of time to do so. That in-action 4 appeared to have violated the provision of Rule 55 of the Commercial Court Rules which provides that: "55. Where the statement of an intended witness is not served on the other party within the time prescribed by these Rules, the statement shall, unless the Court extends time for such service, be struck out." Striking out of all the Plaintiff's witness statements would result into dismissal of the suit for want of prosecution. The Court therefore invited the Learned Counsel for both sides to address the Court on the two preliminary points of law and their implications to the present case. In this case Ms. Frida Mollel and Ms. Upendo Mbaga, Learned State Attorneys represented the Plaintiffs. Mr. Philemon Rutakyamirwa, Learned Advocate, represented the 1st, 2nd and 3rd Defendants. Mr. Pascal Mshanga, Learned Advocate, represented the 4th Defendant. Mr. Joseph Rugambwa, Learned Advocate, represented the 5th Defendant. The Learned Counsel for the Plaintiffs submitted that referral of the matter to arbitration pursuant to Clause 8 of Annexture II to the Credit Facility, is time barred and cannot be ordered now by the Court because section 14(1) of the Arbitration Act, CAP 15 (R.E 2020) requires a party to refer the matter to arbitration not later than the date of submitting his first statement of claim on the substance of the. dispute. It was submitted that after the Plaintiffs filed the suit in Court, all defendants also filed their Written 5 Statements of Defence without making an application for referral of the matter to arbitration. It was submitted for the Plaintiffs that the matter proceeded to mediation that failed and later on, final Pretrial conference was held to frame the issues of the case followed by parties filing their respective Witness Statements. It was argued, therefore, that if the Defendants wished to apply for the present matter to be referred to arbitration, that application, legally speaking, ought to have been made before the date of filing their Written Statements of Defence. It was submitted that as no such application had been timely made to refer the dispute for arbitration before filing their Written Statements of Defence, then, in effect, all the parties to the suit had thereby waived their right to enforce the arbitration agreement by applying for the matter in this suit to be referred to arbitration. The Learned Counsel for the Plaintiffs submitted that at the stage reached in this suit, section 14(1) of the Arbitration Act does not apply and therefore hearing of the case should proceed. The Learned Counsel for the Plaintiffs referred this Court to the case of Watumishi Housing Company & Others vs K'S Builders Limited (Misc Civil Application No. 2307 of 2024) [2024] TZHC 1739 (30 April 2024). They argued that in that case the Court was faced with a similar situation whereby parties requested that the matter to be referred to arbitration after having filed their written statements of defence. The Court in denying the application held that: "The contagious phrase here is "not later than the date ofsubmitting his first statement of claim on the substance of the dispute". Meaning that the 6 application of this nature is to be brought to the Court's attention on the date of filing the answers to the claim in the main suit. The Defendant's (Applicant) WSD in this case was filed on &h November2023 and this application was filed on 7th February2024, almost three months after filing the defence and therefore out of the time limit prescribed by the law and without extension of time." The Learned Counsel for Plaintiffs submitted that in that case, at the last paragraph of page 5, the phrase "not later than the date of submitting the statement of the claim" was construed to mean the date of filing the Written Statement of Defence in the main suit. Therefore, it was submitted for the Plaintiffs that the position of the High Court is that if a party desires that the matter filed in Court should be referred to arbitration, he should file an application to stay the proceedings in Court latest by the date of filing his Written Statement of Defence. It was argued by the Plaintiffs' Learned Counsel, therefore, that in the case at hand, none of the defendants had made such an application timely, which, in turn, implies that the arbitration clause has been waived by the parties to it. The Learned Counsel for the Plaintiffs submitted that in those circumstances there is no need for the Court to stay this matter and refer it to arbitration as such opportunity has expired. The Learned Counsel for the Plaintiffs submitted that a similar position like the one in the case of Watumishi Housing Company (supra), was also 7 taken in Leo Developers Ltd vs B.H.Ladwa & Another (Civil Case 102 of 2019) [2022] TZHC 12864 (9 August 2022), where at page 4 the Court held that the phrase "not later than the date of submitting the documents under section 14(1) Cap 15 refers to the date of filing the Written Statement of Defence" Hence, it was argued for the Plaintiffs that an application to stay the present suit and refer the matter to arbitration cannot be made by a party after filing his Written Statement of Defence. The Learned Counsel for the Plaintiffs submitted further that, in alternative, clause 13 of the contract if read carefully, is clear that parties had agreed not only to refer the matter to arbitration, but also they had agreed to jurisdiction of the Tanzanian Courts. The Plaintiffs' Counsel argued that even though there is a clause that implies that there was an intention by parties to refer the matter to arbitration, the parties had also agreed that in the event of a dispute, they would submit themselves to the jurisdiction of Tanzanian Courts. It was argued that by not filing an application for stay of proceedings, so as to refer the matter to arbitration timely, the parties should be deemed to have had in mind clause 13 of their contract and that is why they never applied for stay of the suit seeking its referral to arbitration. It was argued for the Plaintiffs that if the application to refer the matter to arbitration is granted at this stage of the proceedings in this case, the Plaintiffs will be prejudiced as their evidence has already been disclosed and submitted in Court through their witness statements. It was argued further that the Defendants will take advantage of the Plaintiff's evidence and that 8 will highly prejudice the interest of the Plaintiffs in the arbitration as the defendants will go the arbitration while taking advantage of the evidence already disclosed by the plaintiffs, hence the arbitration proceedings cannot be fair. The Learned Counsel for the Plaintiffs submitted on the issue of their not having timely served their witness statements upon the 4th Defendant in this suit. It was submitted that on 4th April 2024, the Plaintiffs contacted a Court process server one Mr. Patrick Nkwera to effect service of their witness statements to the 4th Defendant but the service was not duly effected due to the reason that the offices of the Learned Counsel for the 4th Defendant were closed. It was argued that on 8th April 2024 the Court process server returned the witness statements together with an affidavit of proof of service sworn by the Court process server, to the offices of the Counsel for the Plaintiffs. It was argued that the 7 days within which the 4th Defendant had to be served with the Plaintiffs' witness statements expired before the Plaintiffs could manage to effect service upon the Plaintiffs. It was submitted for the Plaintiffs that service of the witness statements was not effected timely by the Plaintiffs upon the 4th Defendant because, after missing the 4th Defendant's Counsel, the Plaintiffs ultimately found themselves already out of time. The Learned Counsel for the Plaintiffs, therefore, prayed, under Rule 55 of the Commercial Court Rules, for an extension of time within which to serve the 4th Defendant with the witness statements of the plaintiff. It was submitted that the said Rule allows the Court to extend time for service of witness statements. The Learned Counsel for the Plaintiffs insisted that that 9 all other defendants had been timely served with the plaintiffs' witness statements time except for the 4th defendant whose advocate's offices were closed on the date of service. The Plaintiffs' Counsel prayed that it is in the interest of justice for the Court to extend time for the Plaintiffs to effect service of their Witness Statements upon the 4th Defendant so that hearing of the case can proceed on merit. The Plaintiffs relied on the overriding objective principle under section 3A and 3B of the Civil Procedure Code, CAP 33 of the Laws of Tanzania, to salvage the situation by arguing that procedural technicalities should not defeat the substantive justice of the case. They insisted and urged that the issue of timely service of documents filed in Court is a procedural matter that cannot be upheld at the expense of justice in the case. For the Defendants' side Mr. Joseph Rugambwa and Mr. Pascal Mshanga, Learned Advocates made reply submissions. On his part, Mr. Rugambwa, Learned Advocate, submitted that the Court had raised a valid preliminary point of law on the requirement of referring the matter to arbitration, since there is a valid arbitration clause in the parties' contract and which must be respected. He argued that the requirement to comply with the arbitration clause is a legal point that the plaintiffs were supposed to comply with instead of filing the present suit. Mr.Rugambwa, Learned Advocate, argued that the arguments made by the Learned Counsel for the Plaintiff cannot override the law. He submitted that the two decisions cited by the Learned Counsel for the Plaintiff are both of the High Court and thus io not binding upon the same High Court. He prayed that the Court passes an order referring the dispute to arbitration pursuant to their arbitration clause. Mr. Rugambwa, Learned Counsel, also submitted on the issue of non­ service of witness statements of the Plaintiffs upon to the 4th Defendant. He argued that the Court on 18th March 2024, clearly directed all the parties to file their witness statements and immediately serve them upon the other parties. He submitted that Rule 55 of the Commercial Court Rules is clear that where service of the witness statement has not been done timely, the consequences are that the Court shall strike out the witness statement of the non-complying party. He submitted that failure by the Plaintiffs to effect service of their witness statements upon the 4th Defendant, went contrary to the Court order and the law. He submitted that it is necessary in the administration of justice that Court orders must be respected by all parties and that the Plaintiffs should not seek justice by way of favours by seeking an extension of time after the Court had already raised the issue. Mr. Rugambwa submitted that from the submissions by the Learned Counsel for the Plaintiffs, the attempt to effect service of the Plaintiffs' witness statement upon the 4th Defendant was made only on 4th April 2024 and then from there, even after the lapse of almost two months period, the plaintiff had not bothered again with the issue of service of the Plaintiffs' witness statements upon the 4th Defendant nor to apply for extension of time in Court so as to effect service of the Plaintiffs' witness statements upon the 4th Defendant. He submitted that the prayer for extension of time which was made after the Court had raised the issue suo mottu was an attempt to pre-empt and ii circumvent the preliminary point of objection raised by the Court. On overriding objective, Mr. Rugambwa, Learned advocate, submitted that justice is delivered according to the law. He argued that so long as Rule 55 of the Commercial Court Rules says that failure to serve the Witness Statement on time leads to striking out of the witness statement, then that is the justice according to the applicable law. He submitted that overriding objective rule cannot be resorted to in order to circumvent the mandatory requirements of the laws. Mr. Rugambwa cited a decision of the Court of Appeal in Ahmed Mohamed versus Fatuma Bakari and another, Civil Appeal No.71/2012, which held at pages 1 and 2 that a Court can do justice only in accordance with the law and not otherwise. He argued that the same principle should apply in this case as the plaintiffs' Counsel have conceded that they have not served the Plaintiffs' witness statements upon the 4th Defendant, and therefore, justice should be delivered as per the law. Mr. Rugambwa, Learned Advocate, concluded by praying that in terms of the first issue raised by the Court, the parties and the dispute be referred to arbitration in conformity with the arbitration clause. He added that, in case his first prayer is not answered in affirmative, then the witness statements of the Plaintiffs be Struck out under Rule 55 of the Commercial Court Rules and consequently the entire suit should be dismissed for want of prosecution. Mr. Pascal Msanga, Learned Advocate, submitted on the first issue the Plaintiffs' Counsel have strongly relied on section 14(1) of the Arbitration Act, 2020. He argued that the provision referred to is very clear that it makes reference to the date of filing" the statement of claim" and not "statement 12 of defence". He submitted that a claim is filed by the Plaintiff and not the Defendant. Therefore, he argued, the argument that the Defendants were supposed to bring their prayer to stay the suit and refer the matter to arbitration, before submitting their statement of claim is not applicable to the Defendant. Mr.Mshanga, submitted that the provision puts time limit for the Plaintiffs and not the Defendant and therefore the Defendants are not yet time barred to insist on stay of this suit and seek referral to arbitration under that section. Mr. Mshanga submitted further that even if section 14(1) of the Arbitration Act were meant to apply to the Defendants as well, still it could not apply to the current situation where the issue of referral to arbitration was raised by the Court and not by the Defendants. He argued that the two cases referred by the Plaintiffs' Counsel do not apply to the case at hand as they are distinguishable. He argued that under the two cases cited, referral to arbitration was not an issue raised by the Court suo mottu but by the parties themselves. Mr. Mshanga submitted that the two cases emanated from the normal division of the High Court whose rules of procedure are different from those of the Commercial Division of the High Court. He argued that in the normal High Court registries, evidence is given orally most of the time but in the Commercial Division of the High Court evidence is mandatorily always given by way of witness statements. He reasoned that in a typical commercial case like the present one, both sides to the case bring their testimonies in chief on the same day by filing their witness statements as per the Commercial Court Rules. Therefore, he argued, the contention that the plaintiffs will be prejudiced if the matter is referred to arbitration due to disclosure of their evidence in Court, finds no 13 room as evidence of both sides is already known in advance by both sides to the case. Further, Mr. Mshanga, Learned Counsel, submitted that actually there is no way the Plaintiffs will be prejudiced since the 4th Defendant had not yet been served with the alleged witness statements of the Plaintiffs up to the time of making the submissions in respect of the matters raised by the Court suo mottu. Therefore, he argued that the 4th Defendant does not even know the content of the Plaintiff's evidence as it has not yet been served upon the 4th Defendant. He reasoned that the 4th Defendant could not be said to be likely to take advantage of evidence of the Plaintiff in the arbitration while such evidence, actually, has not even been brought to the knowledge of the 4th Defendant as the Plaintiffs have not served the 4th Defendant with their witness statements. Mr.Mshanga, Learned Advocate, submitted that, to the contrary, it is the Plaintiffs who stand to benefit by having in their possession the Witness Statements of all the Defendants' witnesses as all the defendants have served the Plaintiffs with copies of their Witness Statements filed in Court. On the issue of Clause 13 of the letter of offer conferring jurisdiction to the Courts, Mr. Mshanga, Learned Advocate, submitted that clause 13 of Annexture I to the letter offer is referring to the borrower only, not the lender who is the plaintiff. That is, it provides that the borrower has a right to submit the dispute to Court, not the lender. He submitted that the offer letter and all the annextures thereto were drafted by the 1st Plaintiff Bank, and, therefore, the same 1st Plaintiff Bank cannot say now that the contractual clause on referral to arbitration should be abrogated. He submitted that's if 14 there is an ambiguity in the arbitration clause, such ambiguity, in accordance with the contra preferentum rule, should be resolved by the Court against the maker of the agreement because the maker cannot benefit from his own mistake. Mr. Mshanga, Learned Counsel, concluded his submissions by arguing that since there is a valid and binding arbitration clause in this case, the Court should command parties to refer the matter to arbitration as agreed. On the issue of failure by the Plaintiffs to serve their witness statements upon the 4th Defendant, Mr. Mshanga submitted that as far back as on 27th May 2024, when parties appeared before the Court for hearing, Counsel for the 4th defendant informed the Court that the 4th Defendant had not yet been served with the witness statements of the Plaintiffs. He reasoned that by 27th May 2024 when the case was called in Court, the plaintiffs had already spent 25 days since filing in Court their witness statements without having served the same upon the 4th Defendant and yet even after they were reminded of that anomaly, the Counsel for the Plaintiffs still never bothered to ask for extension of time on 27th May 2024 so as to effect service of their witness statements upon the 4th Defendant. He argued that the Plaintiffs' Counsel did not even inform the Court about the alleged problems encountered by their Court process server in attempting to serve the 4th Defendant with the said witness statements. Mr. Mshanga, Learned advocate, submitted that if at all the Plaintiffs were not able to effect personal service upon the 4th Defendant's Counsel in office happened, the Plaintiffs were supposed to file an affidavit of proof of service in Court. He 15 submitted that the purported affidavit of proof of service relied upon by the Plaintiffs was shows that it was actually never filed in Court because the copy thereof served upon the 4th Defendants Counsel contains no Court stamp or evidence of fees paid. He submitted further that the affidavit of proof suffers a lot of irregularities and defects. It is made by a person identifying himself as Patrick Nkwera as a Court process server but whose name does not appear in the list of registered Court brokers and auctioneers as of 25th June 2024 published in the website of the Ministry of Constitutional and Legal Affairs. Mr. Mshanga argued further that the affidavit of process server shows that he received from the Plaintiffs "summons" and not "witness statements" to serve the 4th Defendant. He submitted that as the issue in Court is not on non-service of summons, the affidavit of the Court process server is misplaced and irrelevant. Mr. Mshanga submitted that his Law Firm's office was open on the alleged date but no Court process server attempted to serve him with any Court document related to this case. He added that the Court process server had other avenues to reach the 4th Defendant's Counsel after finding the office closed as alleged since all pleadings filed by the 4th Defendant bear all the relevant service details and addresses including mobile phones and email details. He submitted that the prayer for extension of time to effect service of the Plaintiffs' witness statement upon the 4th Defendant which was made in the course of submissions by the Learned Counsel for the plaintiffs was an afterthought and aimed at circumventing the objections already raised by the Court and to defeat the purpose thereof. He called upon the Court to enforce strictly Rule 55 of the Commercial Court Rules because if the Court is lenient on 16 parties who sleep on their rights, on the basis of overriding objective, it will set a bad precedent. On overriding objective rule, Mr. Mshanga, submitted further that the Court of Appeal has repeatedly held that the overriding objective principle should not be relied upon as an excuse for parties not to comply with the mandatory rules of procedure prescribed by the laws. He argued that Rule 55 of the Commercial Court Rules provides that the witness statement not served upon the other side within 7 days shall be struck out. He argued that the rule is mandatorily phrased by virtue of Interpretation of Laws Act as per section 53(2) thereof. He submitted that the word "shall" entails a mandatory requirement. Mr. Pascal Mshanga, Learned Counsel, concluded by praying that the Plaintiffs should be ordered to comply with the mandatory arbitration clause and refer the current dispute to arbitration and that the Plaintiffs' witness statements, not at all served upon the 4th Defendant, should be struck out under Rule 55 of the Commercial Court Rules. As the preliminary issues were raised by the Court, there was no rejoinder submissions. After going through the case file thoroughly, ready for the evidential hearing, I raised the two preliminary points of law with respect to institution and continuation of this case by the Plaintiffs in disregard to the dictates of the arbitration Clause that forms part of the contract between the parties herein; and with respect to the failure by the Plaintiffs to serve upon the 4th Defendant the Plaintiffs' filed Witness Statements even after passage of several months. Failure by a party to timely serve his witness statements 17 upon the other side would result into his witness statements being struck out under Rule 55 of the Commercial Court Rules. In this case, consequently, the Plaintiffs' case would be liable for dismissal for want of prosecution because all witness statements of the Plaintiffs would face the same fate. In view of the earlier raised preliminary point of law on failure to refer the dispute to arbitration, if it stands, this Court would be debarred from taking cognizance of the suit and the dispute would be referred to arbitration. In that regard it would not be necessary to determine the issue of service of witness statement of the Plaintiffs as the whole matter and all issues thereto would be referred to arbitration. In that regard, I will have to start my determination with regard to the preliminary point of law concerning violation of the arbitration Clause by the Plaintiffs who filed this case in Court instead of submitting the dispute for arbitration as it was agreed in their contract with the Defendants. The Contract has a dispute resolution Clause under Clause 8 of the Annexture II to the Banking Facility and a choice of law clause under Clause 13 of Annexture I to the Banking Facility. Clause 8 of the said Annexture II to the Banking Facility contains an arbitration clause providing as follows: "Governing Law and Jurisdiction 1) This Agreement shall be governed by and construed in accordance with laws of Tanzania. 2) Any dispute, controversy or claim arising out of this Agreement should be settled by arbitration in 18 accordance with the Arbitration Act (Cap 15 RE 2000)." Clause 13 of Annexture I to the Banking Facility provides that: "Governing Laws This letter of Offer shall be governed by and construed in accordance with the Laws of Tanzania. The borrower irrevocably submits to the jurisdiction of Tanzanian Courts." It was my view that Clause 13 above was only a choice of law and choice of forum clause where Tanzania law and Courts were chosen by the borrower. I understood Clause 13 above as providing that in the event of the matter at hand proceeding in Courts rather than arbitration, the Courts of Tanzania will have jurisdiction. In short, the Court is already seized of the matter. The issue is whether this matter shouldn't have been referred to arbitration, despite the fact that this Court is vested with the requisite jurisdiction? Clause 8 of Annexture II to the Banking Facility contains a binding agreement to refer "any dispute, controversy or claim" arising out of the loan agreement to be settled by way of arbitration in accordance with the Arbitration Act of Tanzania. Casting a glance at it, it was my view that the principle of party autonomy in contract, among other things, required that parties should be kept to their bargain. The role of the Court is to uphold the parties' agreement by keeping parties to their bargain. That however does not mean that this Court lacks jurisdiction or that parties by their 19 agreement have ousted the jurisdiction of the Court. It only means that whereas the Court as well as the arbitral tribunal chosen by the parties, both have jurisdiction over the subject matter of the dispute, that the parties' own-chosen forum and mode of dispute resolution should be given recognition and prominence under the doctrine of party autonomy. Party autonomy has been a common principle in contract law; thus it has been drafted into most of the international conventions in contract law as well as into domestic laws governing contracts. Party -autonomy entails, amongst others, the parties' freedom of contract to decide the contractual terms and to negotiate the terms of their contract for which they give their consents. I was drawing inspiration from, among others, the decision of the House of Lords (Supreme Court of the UK) in Heyman v. Darwins Ltd. (1942) AC 356 at page 375 which was quoted with approval by the Court of Appeal of Tanzania in Civil Appeal No. 115 Of 2005, between Tanzania Motor Services Ltd & Presidential Parastatal Sector Reform Commission versus Mehar Singh T / A Thaker Singh. It was held in Heyman v. Darwins Ltd (1942) AC 356 at page 375 that: "I venture to think that not enough attention has been directed to the true nature and function of an arbitration clause in a contract. It is quite distinct from other clauses. The other clauses set out the obligations which the parties undertake towards each other but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement of both parties that if any dispute arises with regard to the obligation which the one party has undertaken to the other, such dispute shall be settled by a tribunal of their own constitution. And there is this very material difference, that whereas in an ordinary contract the obligation of the parties to each other cannot in general be specifically enforced and breach of them results only in damages, the arbitration clause can be specifically enforced by the machinery of the Arbitration Acts. The appropriate remedy for breach of the agreement to arbitrate is not damages, but is enforcement." The parties to the Credit Facility and its Annexture II thereof which form the subject of the present case, have a dispute resolution clause embedded into their contract requiring them to refer "any disputes, controversies or claims" arising from the performance or non-performance of the obligations which the one party had undertaken to the other, to be settled by an arbitral tribunal of their own constitution in accordance with the Arbitration Act of Tanzania. However, in total disregard of their arbitration agreement, parties herein are actively litigating before this Court over the present dispute which, primafascie, ought to have been referred to arbitration. Did they consciously waive the requirement to submit themselved to arbitration or was it just an inadvetrence? Thus I raised this 21 question as a preliminary issue so as to ascertain the reality and the position. As it turned out, the Defendants insisted on the need to refer the dispute to arbitration according to their arbitration agreement with the Plaintiff. The Plaintiff, on the other hand, pushed ahead with their standpoint and desire to proceed with litigation in disregard of the arbitration clause in the contract with the Defendants. Much was argued by the Learned Counsel for the Plaintiffs and the Defendants on this issue as it has been shown above. The focus of the submissions by the Learned Counsel was on sections 14 and 15 of the Arbitration Act, CAP 15 of 2020.1 thank the Learned Counsel for their arguments. By pegging their rival submissions exclussively at sections 14 and 15 of the Arbitration Act CAP 15 , (R.E 2020), however, the seemingly small issue was thereby exacerbated hence catapulting the rather simple querry raised by the Court as part and parcel of the normal judicial case management, into a serious and controversial legal limbou that goes to the depths of the salient tension and delicate balance between powers of the Courts of law and of the arbitral tribunals regarding their concurrent jurisdiction over subject matters of disputes which can be resolved by way of arbitration and by way of litigation as well. It is an area of delicate interplay of the jurisdiction of Courts of law (supervisory Courts) and of the arbitral tribunals - a common ground of jurisdiction in respect of which the law prescribes some fine boundaries beyond which each cannot transcend. That is the zone that the arguments made by the Learned Counsel for the Plaintiffs and for the Defendants have pushed the present matter to. It is not a comfortable zone at all and there are many escape routes from it. However, to do justice to the very impressive submissions made by the Learned 22 Counsel for the Plaintiffs and the Defendants alike, I will endeavour to traverse through that route as well in the course of my Ruling. Arbitration being a relatively not so familiar a field to most legal practitioners, perhaps I should premise my Ruling with a foundational tool by setting up the context upon which the content will come to rest. A peculiar feature of arbitration law obtaining in Tanzania under the Arbitration Act, 2020, is the compromise of the inherent and silent tension between Courts of law on one hand and the arbitration tribunals on the other, over their respective jurisdictions with respect to the subject matter in dispute over which both the arbitral tribunals and the Courts of law may lawfully exercise their jurisdiction. In one end the object of arbitration law is to, as much as possible, to give full effect to the arbitration agreement and eliminate interferences by the Courts in the arbitral process. On the other hand, the law recognizes and upholds the principle that the Courts of law shall be the final authority in the administration of justice including dispute resolution. The provision of sections 14 and 15 of the Arbitration Act, CAP 15, (RE 2020) are reflective of that inherent tension and the attempt to bring a compromise thereon. In performing the paradoxical role of depicting the conflict and at the same time attempting to reconcile the same, sections 14 and 15 of the Arbitration Act, display a feature of seemingly striking contrast like they would fight each other at any time and yet co-exist in the same room. Intrinsically and practically the effectiveness of the arbitration process inevitably needs the "helping hand" of the Courts like effectiveness of the Courts also needs the helping hand of the arbitral tribunals and other ADR 23 fora to offload some of the spilling disputes from the Court registries. Whereas, on one hand, a great caution is taken by the Courts to prevent arbitral process being abused to stall the judicial process, on the other hand, a great caution is also taken to prevent the judicial process from stalling the arbitral process. It is like the old story of an Arab traveler who at night in the cold desert, invited his powerful camel inside the tent for warmth of its head only; but the camel, ultimately step by step, got its entire body into the tent and thereby threw out the traveler into the cold desert. The camel thereby took over the whole tent to itself! To me that appears to be the caution that the drafters of the Arbitration Act had in mind in drafting the law. They intended Courts and arbitral tribunals to facilitate each other without one entirely ending up taking over the jurisdiction of the other. The law under sections 14 and 15 of the Arbitration Act, imposes a duty upon both the arbitral tribunals and the Courts to see to it that the delicate balance in respect of their jurisdictions is maintained. Therefore, the provisions of sections 14 and 15 of the Arbitration Act, CAP 15 (R.E 2020) are carefully interwoven around this legal paradox. Unfortunately, and understandably, the first preliminary point of law raised by the Court, took the dimension of sections 14 and 15 of the Arbitration Act, CAP 15 (RE 2020) although, the same issue could as well have been more conveniently argued and determined on the basis of general principles pertaining to the inherent powers of the Court in judicial case management. Like I prefaced it in my Ruling, to do justice to the arguments advanced by the Learned Counsel for both sides to this case, I will have to address, 24 though not necessarily decide the matter before me on the basis thereof, the implications of sections 14 and 15 of the Arbitration Act, CAP 15 (R.E 2020). Hence, in the course of the Ruling a word or two must be said on the applicability of sections 14 and 15 of the Arbitration Act, CAP 15, (R.E 2020) since the Counsel for both sides argued thereon. I have called it "unfortunate" that the submissions by the Learned Counsel on the first preliminary point of law took the road of sections 14 and 15 of the Arbitration Act, CAP 15, (R.E 2020) due to their inherent controversial drafting that tends to result into more confusion than perfection, whenever one attempts to harmoniously interpret them in line with the wisdom in the age-long principle of the Court not interpreting provisions of law dealing with the same subject in isolation. It happens that the only way to reduce the inherent controversy and confusion is at first to go against this very principle and interpret the two provisions in isolation before the harmony in them can ultimately fall in picture! Ordinarily, as sections 14 and 15 of the Arbitration Act regulating the referral of the matter to arbitration and stay of proceedings, which are contemporaneous stages, therefore Courts from the very beginning of interpretation, tend to give them a communal reading to ascertain the real intention of the drafter. When that approach is taken, inevitably things begin to fall apart due to the inherent lack of total or full compatibility! This Court in Leo Developers Ltd vs B.H.Ladwa & Another (Civil Case 102 of 2019) [2022] TZHC 12864 (9 August 2022), justifiably and correctly remarked that: 25 "In this case, therefore, the defendant waived the right to refer the dispute to arbitration upon filing of the written statement of defence. For the foregoing, it is my view that, section 14(1) and 15(3) of the Act are somewhat in conflict. The phrases "unless he has taken appropriate procedural step to acknowledge the legal proceedings against him or he has taken any step in those proceedings to answer the substantive claim" in section 15 (3) presupposes that the stay order is subject to the filing of the written statement ofdefence. It is upon the Hon. the Attorney Genera! to ensure the provisions of section 14 and 15 of the Act are in sync." The above observation and call are not an isolated lone call in the wilderness. It was also echoed as far away as Western Africa, in Nigeria. Prior to 2023, similar provisions to sections 14 and 15 of the Arbitration Act of Tanzania, CAP 15 (R.E 2020) were entrenched as Sections 4 and 5, respectively, in the Arbitration and Conciliation Act ,1988 of Nigeria before it was later on repealed and replaced by the Nigeria's Arbitration and Mediation Act, 2023 popularly known as "AMA". The AMA, among others, unified, harmonized and re-enacted as a hybrid, sections 4 and 5 of the former Arbitration and Conciliation Act 1988, which were similar to sections 14 and 15 of the Arbitration Act, CAP 15 (RE 2020) of the Laws of Tanzania, into the new section 5 of the Nigeria's Arbitration and Mediation Act, 2023. 26 Prior to the repeal and re-enactment of sections 4 and 5 of the Arbitration and Conciliation Act ,1988 of Nigeria through the Nigeria's Arbitration and Mediation Act, 2023, it had been remarked in "Stay of Proceedings Pending Arbitration: Protecting the Interests of Third- Parties to Arbitration in Nigeria/' a Journal Article by Taofeeq N. Alatise, published in AFE BABALOLA UNIVERSITY: J. OF SUST. DEV. LAW & POLICY VOL. 9: 2: 2018, at page 232 that: "The presence of section 5 is "duplicitous and inexplicable", wondering why the drafters would create confusion in the Act." Again, in another article entitled: "Reconciling the Seeming Conflict in Sections 4 & 5 of the Nigerian Arbitration and Conciliation Act", appearing in the "Nigerian Juridical Review, Vol. 10, 2011-2012, by John Funsho Olorunfemi, it was also remarked that: "Sections 4 and 5 of the Arbitration Act provide for indirect enforcement of the arbitration agreement. It is strange why these two sections dealing with the same issue should be drafted into the Act by the Legislature. The presence of these two similar but different-in-effect sections in the Act has generated a lot of legal comments. The provisions of sections 4(2) and 5(1) of the Act pose some important legal questions. In the same piece of legislative 27 enactment, we have two conflicting sections, that is sections 4 and 5 on the same subject matter. Any party applying for a stay would of course prefer to come under section 4 than section 5 where the Court is allowed to exercise some initiative in granting or refusing a stay. As between the two sections, section 5 is a better provision for the arbitral system. A situation in which every application for a stay must be granted may have an overwhelming effect on the arbitralprocess. It is very dear that the two sections are contradictory and not in any way complimentary. Their concurrent presence in the Act without their respective scopes of operation being specified is a sad commentary to the federal legal drafting infrastructure. It is one of the embarrassing manifestations of the lack of consultation and avoidable hurry that sometimes attend legislative drafting in Nigeria, both of which are, in turn, part of the tragedy, that military rule has on the legal system. So long as the two sections are there, the Courts have foisted upon them, the unenviable task of interpreting them in a way that will give life and validity to each section." 28 Suffice it to say that in 2023, through the Arbitration and Mediation Act, 2023 (AMA) sections 4 and 5 of the Arbitration and Conciliation Act, 1988 were repealed and replaced by the new hybrid section 5 that provides: "Power to stay Court proceedings on the same substantive claim. 5. (1) Notwithstanding the provisions of any other law, a Court before which an action is brought in a matter, which is the subject of an arbitration agreement shall, if any of the parties request, not later than when submitting their first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is void, inoperative or incapable of being performed. (2) Where an action referred to in subsection (1) has been brought before a Court, arbitral proceedings may be commenced or continued and an award may be made by the arbitral tribunal while the matter is pending before the Court. (3)Where a Court makes an order for stay of proceedings under subsection (1), the Court may, for the purpose ofpreserving the rights ofparties, make an interim or supplementary order as may be necessary." 29 The foregoing expression of controversy and amendment relates to Nigeria. In Tanzania, the Arbitration Act, CAP 15 (R.E 2020) still contains the two seemingly incompatible provisions of section 14 and section 15. So long as the two sections are there, and so long as the Learned Counsel have taken their submissions along the path of sections 14 and 15 of the Arbitration Act, inevitably, it is foisted upon this Court now, the unenviable task of interpreting them in a way that will give life and validity to each section. With the context set clear, I will now briefly revert to the matter at hand. Learned Counsel for both sides armed with several authorities spent much of their time and energy in addressing the two provisions, especially section 14, and their implications to the matter at hand. The question is which one as between section 14 and section 15 of the Arbitration Act, CAP 15 would apply to the present case, if at all, and with what consequences. If both are applicable or neither is applicable, why and with what implications? These questions, in turn, once again, call for taking a breather from the immediate facts of the case at hand and resorting to an in-depth analysis of the scope of each of the two provisions and their spheres of operation. Section 14 of the Arbitration Act, CAP 15 (R.E 2020) essentially provides that a party seeking a referral to arbitration in respect of an action filed in Court for a claim which is the subject of an arbitration agreement, must do so before, or latest on the date of filing his pleadings in defence of the claim, not thereafter. Section 14, also, gives wider room for the applicant 30 to move to refer the dispute which is the subject of the Court action to arbitration, and it is mandatory for the Court to grant the application when it is properly made and the agreement to arbitrate is not void. On the other hand, section 15 of the Arbitration Act, CAP 15 (RE 2020) represents a "compromise" between advocates of a freely enforceable regime based on parties' agreement and those who wished to reject the enforceability of arbitration agreements because it "robbed the Court of its jurisdiction and influence". It appears to have been drafted to recognize the fact that although an arbitration agreement exists, the parties to it may still choose to litigate over the same matter covered by the arbitration agreement. Section 14 of the Arbitration Act is a replica of Article 8 of the UNCITRAL Model Law on International Commercial Arbitration 1985 (as amended in 2006) as well as Article II (3) of the New York Convention, 1958. It is a progressive legal provision that is fully pro-arbitration and advocates for fully-fledged enforcement and respect of the arbitration agreement, except only where the same is void. On the other hand, section 15 represents the traditional old-school approach to arbitration where the Court's inherent residual power and control over the arbitration process is preserved. Most states in the world have opted for either provision and position, not both. India, for example, has the former version as it can be seen under Section 8 of the Arbitration and Conciliation Act, 1996 of India. The United Kingdom has the later version as it can be seen under section 9 of the UK's Arbitration Act, 1996 as amended. Tanzania has both versions in the same law. Nigeria too, prior to 2023 amendment, used to have both versions of provisions. 31 However, as from 2023, it has adopted a harmonized and hence a hybrid of both versions. I will start with section 14 of the Arbitration Act, CAP 15 of the Laws of Tanzania, (R.E 2020). It provides: "14.~(1) A Court, before which an action is brought in a matter which is the subject of an arbitration agreement shall, where a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement of claim on the substance of the dispute, and notwithstanding any judgment, decree or order of the superior Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists. (2) The application referred to in subsection (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duty certified copy thereof: Provided that, where the original arbitration agreement or a certified copy is not available to the party applying for reference to arbitration under subsection (1), and the agreement or certified copy is retained by the otherparty to that agreement, then, the party so applying shall, in the 32 manner set out under a written law, apply to Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court. (3) Notwithstanding any application made in terms of subsection (1) and any issue pending thereto, an arbitration may be commenced or continued and an arbitral award made, (underlining supplied for emphasis)" The above provision is reflective of Article II (3) of the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards, 1958, and more a replica of Article 8 of the UNCITRAL Model Law on International Commercial Arbitration, 1985 as amended in 2006. Article II (3) of the 1958 New York Convention reads as follows: " The Court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed." (underlining supplied) 33 Article 8 of the UNCITRAL Model Law on International Commercial Arbitration, 1985, on the other hand, provides: "Article 8. Arbitration agreement and substantive claim before Court (1) A Court before which an action is brought in a matter which is the subject of an arbitration agreement shall, ifa party so requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed. (2) Where an action referred to in paragraph (1) of this article has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the Court." In the UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration, the United Nations Commission on International Trade Law (UNCITRAL), whose main task is harmonization of global laws regulating international trade, explains the meaning and implications of the above provision of Article 8 from pages 30 to 51 of the digest that: 34 "Similar in purpose and content to article II (3) of the 1958 New York Convention, article 8(1) relates to the so-called "negative" effect of the arbitration agreement, which prevents the parties from commencing Court actions in relation to matters falling within the scope of the agreement. Article 8 (1! compels Courts to refer an action to arbitration under certain conditions. A first condition, which is substantive in nature, requires that the subject­ matter of the dispute falls within an arbitration agreement which is neither null and void, inoperative nor incapable of being performed. A second condition, which is procedural, requires that the referral to arbitration be sought no later than when the party requesting it submits its first statement on the substance of the dispute. Some cases further suggest that article 8 also requires that there exist a dispute between the parties. The referral of an action to arbitration entails that it cannot be further continued before domestic Courts. Article 8 (2) allows arbitration proceedings to be commenced or continued even where an application to refer a case to arbitration ("referral application") is pending. The practical effect of this provision is to delegate to the arbitral tribunal rather than the 35 Court, the decision as to whether the arbitration should proceed while a referral application is pending..... Courts have held that, to comply with article 8, a referral application had to be made prior to the filing of any pleading on the substance of the dispute... where the conditions set out therein are met, Courts have no other option than to refer the action to arbitration. Several decisions rendered in other Model Law jurisdictions also stand for the proposition that article 8 is mandatory. (Underlining supplied for emphasis and focus) " In Alstom T&D India Ltd Vs. M/s Texcel International Pvt., Ltd., C.M.A.No.3683 of 2019 and C.M.P.No.21091 of 2019, the Court was interpreting Section 8 of the Arbitration and Conciliation Act, 1996 of India which provides that: "8. Power to refer parties to arbitration where there is an arbitration agreement.- (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. 36 (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made." The Court in the above said case when interpreting this section which is in pari materia to section 14 of the Arbitration Act of Tanzania, held that: "Section 8 clearly stipulates that whenever a suit is filed in a civil Court the cause ofthe action ofthe said suit emanates from a contract in which parties have voluntarily and willingly agreed to settle the dispute by arbitration, if such conditions are met, then it is bounden duty of the Court to refer the parties to arbitration. It is mandatory that the essentials of Section 8 of Arbitration and conciliation Act are fulfilled the procedure contemplated therein has to be followedas.w/c/l "(underlining supplied for emphasis) In yet another Indian case, in the Judgment of The Branch Manager, Magma Leasing and Finance Limited and Anr. V. Potluri 37 Madhavilata and Anr. (Manu/SC/1672 of 2009), the Supreme Court of India at Paragraph No.22 of the Judgment, deliberated on the implications of section 8 of the Indian Arbitration and Conciliation Act a 1996 and held that: "An analysis of Section 8 would show that for its applicability, the following conditions must be satisfied: (a) that there exists an arbitration agreement; (b) that action has been brought to the Court by one party to the arbitration agreement against the other party; (c) that the subject matter of the suit is same as the subject matter of the arbitration agreement; (d) that the other party before he submits his first statement ofthe substance ofthe dispute, moves the Court for referring the parties to arbitration: and (e) that along with the application the other party tenders the original arbitration agreement or duly certified copy £^ereof"(Underlining supplied for emphasis) I think it is not a misplacement if I were to add at this juncture what is meant by the phrase "submits his first statement of claim on the substance 38 of the dispute" which is also a bit controversial. It refers to filing the defence to the substantive claim in the case and not pleadings or defences related to incidental applications. In Booz Allen and Hamilton Inc., V. SBI Home Finance Ltd., and Ors, (Manu/SC/0533/2011), the Supreme Court of India in Paragraph Nos. 17 and 18 of the Judgment held that: "Filing of reply to an application for temporary injunction, attachment before judgment, appointment of receiver cannot be construed as statement of disputes as it is done to avoid an interim order made against him...filing a detailed objection to an interim application for internal relief cannot be concerned to be a statement on the substance of dispute resulting in submitting oneself to jurisdiction of the Court." In short, section 14 of the Arbitration Act, CAP 15 R.E 2020, is in parimateria with Section 8 of the Indian Arbitration and Conciliation Act, 1996; Article II (3) of the New York Convention, 1958; and Article 8 of the UNCITRAL Model Law on International Commercial Arbitration, 1985. The following can discerned about it: (a) Section 14 of the Arbitration Act upholds sanctity of the arbitration agreement and the jurisdiction of the arbitral tribunal. Inevitably, the Court is simply being relied upon under that section, to give full effect to the principle of party autonomy by upholding sanctity of the arbitration 39 agreement which, in turn, operates to debar the Court from exercising jurisdiction over substance of the dispute. The section grants powers to exercise that jurisdiction over the arbitral tribunal. The justification of having section 14 of the Arbitration Act, CAP 15 (R.E 2020) lies under general principles of arbitration law, that by entering into an arbitration agreement, the parties commit to submit certain matters to the arbitrators' decision rather than have them resolved by law Courts. Thus, the parties: (a) waive their right to have those matters resolved by a Court; and (b) grant jurisdictional powers to private individuals (the arbitrators). These two main effects of the arbitration agreement are called "negative" and "positive", respectively. This theoretical foundation underlies the provision of section 14 of the Arbitration Act, CAP 15, (R.E.2020). Thus it forcefully provides that where the arbitration agreement is valid, it is not the Courts which should take cognizance of the matter, but rather the arbitral tribunals. Hence, where a valid arbitration agreement exists and a party to it has timely and properly made an application for referral of the dispute to arbitration, a referral order must be issued by the Court, referring the parties to arbitration under section 14 of the Arbitration Act, notwithstanding any judgment, decree or order of the superior Court. It also emphasizes that notwithstanding the pendency of any application made in terms of section 14(1) and any issue pending thereto, an arbitration may be commenced or continued before the arbitral tribunal and an arbitral award made. Interestingly, and understandably, it is the Courts which are entrusted and 40 enjoined to ensure that section 14 of the Arbitration Act which is the cornerstone of sanctity of the arbitral process, is enforced. (b) Section 14 of the Arbitration Act is all about referral to arbitration bv the Court of the subject matter in a dispute filed in Court which is also the subject matter of an arbitration agreement. (c) There are two types of applications for referral to arbitration under section 14(1) of the Arbitration Act, based on the timing of presenting the application for referral to arbitration. For the sake of specificity, I will label them as the immediate application and the delayed application. The immediate application for referral to arbitration is the one that may be made prior to the date of the applicant submitting his first statement of defence on the substance of the dispute. The delayed application for referral to arbitration is the one that may be made on the date of the applicant submitting his first statement of defence on the substance of the dispute. (d) There is no reference to "stay of proceedings" under the entire section 14 of the Arbitration Act, CAP 15 (R.E.2020). Actually, the immediate application for referral to arbitration under section 14 (1) of the Arbitration Act, by its very nature excludes the possibility of there being brought an application for stay of proceedings under section 15 of the Arbitration Act, in relation to it. Thus the immediate application for referral to arbitration under section 14 of the Arbitration Act has no connection at all to an application for stay of proceedings under section 41 15 of the Arbitration Act. It is only the delayed application for referral to arbitration under the same section 14 of the Arbitration Act, which has connection to an application for stay of proceedings under section 15 of the Arbitration Act. (e) Both the immediate and delayed applications for referral of the matter to arbitration under section 14 of the Arbitration Act cannot be brought AFTER the date of submitting the statement of defence on the substance of the dispute. This means that after a party to the arbitration agreement, the subject matter in respect of which has been filed in Court in disregard to the arbitration agreement, files in Court his defence pleadings in response to the substance of the suit, he thereby completely forfeits the right to apply for referral of the matter to arbitration. This is because by presenting his statement of defence on the substance of the dispute without prior or simultaneously having brought an application resisting the suit and seeking referral of the dispute to arbitration, he will thereby be taken to have waived his right to invoke the arbitration agreement and will be taken to have submitted himself to the jurisdiction of the Court in the same way like the other party who had filed the matter in Court. (f) What is referred to arbitration by order of the Court under section 14 of the Arbitration Act? It is the action that is brought in a matter which is the subject of an arbitration agreement and the parties to it that are referred to arbitration in terms of section 14 of the Arbitration Act. 42 (g) What is the effect of the order of referral to arbitration under section 14 of the Arbitration Act? According to the UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (supra), "the referral of an action to arbitration entails that it cannot be further continued before domestic Courts". In Kerala State Electricity Board and Anr. V. Kurien E.Kalathil and Anr., (C.A. Nos. 3164 and 3165 of 2019), the Supreme Court of India in Paragraph No.39 of the Judgment held that: "Referring the parties to Arbitration has serious civil consequences. Once the parties are referred to arbitration, the proceedings will be in accordance with provisions of Arbitration [Act], and the matter will go outside the stream of the civil Court. The arbitral tribunal shall not be bound by the Code of Civil Procedure and the Evidence Act. Once the award is passed, the award shall be set aside only under the limited grounds. Hence referring the parties to arbitration, has serious civil consequences procedurally and substantively...." Therefore, I take it that section 14 of the Arbitration Act deals exclusively with referral to arbitration and not with stay of proceedings pending the referral to arbitration. I take it that referral order by the Court referring the action and the parties to arbitration under section 14 of the Arbitration Act, CAP 15, (R.E 2020) marks the total exodus of the matter 43 from the cognizance of the Court wherein the action was filed. The Court will not be able to take cognizance of the matter anymore presently or subsequently as a trial Court and, therefore, the proceedings in the action brought in a matter which is the subject of an arbitration agreement, shall come to an end so far as the Court is concerned, by the referral order. I am of the view that, legally speaking, an order referring the matter to arbitration under section 14 of the Arbitration Act, CAP 15 (RE 2020) effectively ends proceedings in relation to the action before the Court. The proceedings related to the action/suit cannot be stayed after the referral order to take the action and the parties for arbitration. The substance of the case in dispute that was before the Court is referred or transferred to arbitration. There is no subsequent Court process to take place in the form of trial of the matter which has been referred to arbitration, pending which a stay order can be issued under the Arbitration Act. If parties fail to attend the arbitration as ordered or fail to appoint the arbitrator or that arbitral proceedings cannot, for some reasons, take place after the referral order is issued, the solution is not thereby to automatically reactivate in Court the matter that has already been transferred from the cognizance of the Court. The solution is for the parties or the arbitrator to invoke the provisions of the Arbitration Act and resort to the facilitative supervisory powers of the Court, from time to time, to ensure that the arbitration process takes place and continues to its finality. In seeking the supervisory powers of the Court to ensure the smooth running of the Arbitration process, resort will not be had to the Court file whose subject matter was referred or transferred to arbitration, rather a fresh application will have to be made for that purpose. Therefore, there is 44 no gain in staying in Court the proceedings in respect of the action itself brought in a matter which is the subject of an arbitration agreement. In fact, there is nowhere in the entire section 14 of the Arbitration Act, CAP 15 (R.E 2020) where it is prescribed that the Court has is to stay proceedings of the action brought in a matter which is the subject of an arbitration agreement, pending referral to arbitration. The entire section 14 of the Arbitration Act is all about referral to arbitration as a distinct and separate process which may not necessarily be accompanies with a stay of proceedings; hence may not be connected or related to stay of proceedings under section 15 of the Act. Tracing the historical background and development of the content that constitutes section 14 of the Arbitration Act, from the UNCITRAL Model Law,1985 and the New York Convention, 1958, to the Indian Arbitration and Conciliation Act,1996; it is obvious and persistent that the content of section 14 of the Arbitration Act, CAP 15 (R.E 2020) was intended and is understood to deal with referral of a matter which is subject of the arbitration agreement, to arbitration. Section 14 of the Arbitration Act does not deal with stay of proceedings. That is why the Arbitration Act, CAP 15 (R.E 2020) contains another provision, that is section 15 thereof, which regulates stay of proceedings as a distinct and separate process from that of referral to arbitration under section 14. Section 14 of the Arbitration Act was intended only to refer to arbitration matters filed in Court in respect of which there exists a valid arbitration agreement. The Court can either grant the referral order and thereby end the matter before it or decline to issue the referral order on the ground that the agreement to arbitrate is void and thereafter proceed to entertain the matter itself. I 45 construe section 14 of the Arbitration Act, CAP 15 (RE 2020) in a similar way like transfer of a suit where a suit which was supposed to be filed in a lower Court, is filed in the higher Court. In that case, both the lower Court and the higher Court will have jurisdiction over the matter but the higher Court may transfer the case to the lower Court competent to try it. After passing an order of transferring the case to the lower Court, the higher Court cannot go ahead and stay the same case before it pending determination of the transferred case by the lower Court! After the case is transferred from the higher Court to the lower Court, the action makes an exodus from the higher Court. When the transferred case is determined by the lower Court of competent jurisdiction, there is no room for the same matter to be reinstated or reactivated for purposes of trial in the higher Court. Therefore, upon a transfer order being issued, the case before the higher Court would end with the transfer order thereby marking total and permanent exodus of the case from the higher Court to the lower Court competent to try the case. Equally, an order under section 14 of the Arbitration Act, CAP 15, (R.E 2020) referring to arbitration the matter in the action filed before the Court, does not envisage staying the action before the Court pending the referral to arbitration. Stay of proceedings pending, is the subject of section 15 of the Arbitration Act, CAP 15 (RE 2020). The fact that some of the preconditions for invoking section 14 and those for invoking section 15 of the Arbitration Act are incompatible and at times mutually exclusive, is a clear indication that the two processes were not intended to always be carried out together. In order for a party to the arbitration agreement to invoke section 14 of the Arbitration Act and seek an order of referral to arbitration, he should do so 46 prior to filing his statement of defence on the substance of the claim, that is before filing the pleadings constituting his defence thereto or, alternatively, do so latest at the time of filing the defence pleadings. On the other hand, in order for one to invoke section 15 of the Arbitration Act, CAP 15 (RE 2020) and apply for stay of proceedings, he must have firstly taken some essential step to acknowledge the proceedings against him; that is, he must have firstly filed his defence to the substance of the claim. Where a person applies for referral to arbitration under section 14 prior to presenting his defence, he is thereby disqualified from making an application for stay of a suit under section 15 which makes the filing of the defence a mandatory precondition thereof. Where an applicant for referral to arbitration under sectionl4 does so at the time of presenting his defence to the substance of the claim, he may also be entitled to simultaneously or subsequently apply for stay of proceedings under section 15. Where a person applies for stay of a suit under section 15 of the Arbitration Act subsequent to presenting his defence, he is disqualified from applying for referral to arbitration under section 14 as he will have missed the two avenues of applying for referral order namely prior to or at the time of presenting the defence. Does it mean that where one applies for stay of proceedings under section 15 of the Arbitration Act, after he has filed his defence and thereby misses both and the only two opportunities to apply for referral to arbitration, cannot have the matter referred to arbitration? In my view, his matter may still be referred to arbitration but not under the provisions of section 14 or 15 of the Arbitration Act. There are other voluntary ways and discretional orders that may: result into the Court passing an order to refer the matter to arbitration. 47 To set the perspectives of the law clearer, I will make a brief exposition of section 15 of the Arbitration Act, CAP 15 (R.E 2020) as well. For clarity, I will reproduce section 15 of the Arbitration Act, CAP 15 of the Laws of Tanzania. Section 15.-(1) A party to an arbitration agreement against whom legal proceedings are brought, whether by way of claim or counterclaim in respect of a matter which under the agreement is to be referred to arbitration may, upon notice to the other party to the proceedings, apply to the Court in which the proceedings have been brought to stay the proceedings so far as they concern that matter. (2) An application under subsection (1) maybe made notwithstanding that the matter is to be referred to arbitration after the exhaustion of other dispute resolution procedures. (3) A person shall not make an application under this section unless he has taken appropriate procedural step to acknowledge the legal proceedings against him or he has taken any step in those proceedings to answer the substantive claim. (4) The Court shall, except where it is satisfied that the arbitration agreement is null and void, 48 inoperative or incapable ofbeing performed, grant a stay on any application brought before it. (5) Where the Court refuses to stay the legal proceedings, any provision in the arbitration agreement to the effect that an award is a condition precedent to the bringing of legal proceedings in respect ofany matter shall be of no effect in relation to those proceedings. (Underlining supplied) Section 15 of the Arbitration Act, CAP 15 of the Laws of Tanzania, R.E 2020 is an echo of the former section 6 of the repealed Arbitration Act of Tanzania, which was applicable for stay of suits pending arbitration. It is also a replica of section 9 of the UK Arbitration Act 1996 which provides that: Section 9. "Stay of legal proceedings. (1) A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon notice to the other parties to the proceedings) apply to the Court in which the proceedings have been brought to stay the proceedings so far as they concern that matter. 49 (2)An application may be made notwithstanding that the matter is to be referred to arbitration only after the exhaustion of other dispute resolution procedures. (3) An application may not be made by a person before taking the appropriate procedural step (if any) to acknowledge the legal proceedings against him or after he has taken any step in those proceedings to answer the substantive claim. (4) On an application under this section the Court shallgrant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed. (5) Ifthe Court refuses to stay the legalproceedings, any provision that an award is a condition precedent to the bringing oflegalproceedings in respect ofany matter is of no effect in relation to those proceedings." Reading section 15 of the Arbitration Act of Tanzania, the following become apparent: (a) The only remedy which a party can seek under it is stay of proceedings. Not referral to arbitration. Section 15(1) clearly provides that a party to 50 an arbitration agreement against whom legal proceedings are brought may apply to the Court in which the proceedings have been brought to stay the proceedings so far as they concern that matter. Intended referral to arbitration is mentioned in section 15(1) as the ground for the Court to grant the stay of proceedings. A party cannot invoke section 15(1) to apply for referral to arbitration but to apply for stay of proceedings. (b) The only order which the Court can make under section 15 of the Arbitration Act is stay of the proceedings or a part of the proceedings which concern the matter that is to be referred to arbitration. Section 15(4) expressly provides that the only order that the Court can grant in the event the application under section 15 (1) of the Arbitration Act is successful is that "the Court shall grant a stay". Not that the Court shall refer the matter to arbitration. (c) The proceedings to be stayed under section 15 of the Arbitration Act are those "legal proceedings are brought, whether by way of claim or counterclaim in respect of a matter which under the agreement is to be referred to arbitration". The phrase "[a matter which] is to be referred to arbitration", indicates that at the time when the application for stay order brought the matter will not yet have been referred to arbitration but under the agreement it is required to be referred to arbitration. This means that the stay order is intended to subsist until when the Court makes an order under section 14 of the Arbitration Act either transferring the matter which under the agreement is to be referred to 51 arbitration but the same was brought by way of claim or counterclaim in Court. (d) The stay order under section 15 does not subsist to await finalization of the arbitration process and issuance of the award in respect of the matters under the agreement. This is because once the parties are referred to arbitration, the proceedings will be in accordance with provisions of Arbitration Act, and the matter will go outside the stream of the civil Court. Once a matter goes to arbitration, there is no automatic coming back to the cognizance of the Court for trial. The Court cannot stay proceedings pending a process of arbitration whereas any outcome therefrom will not result into the matter being reactivated in Court for trial. Arbitration ends with a binding decision imposed by the arbitrator, not by mutual agreement of the parties. (d) An order for stay of proceedings under section 15 of the Arbitration Act, pending referral of the matter to arbitration only targets the delayed application for referral to arbitration under section 14 of the Arbitration Act, namely the application which a party may bring to Court latest at the time of filing his defence. An application for stay of proceedings under section 15 of the Arbitration Act cannot be filed in relation to the immediate application for referral to arbitration under section 14 which must be brought prior to the party filing his defence to the substance of the claim. This is because an application for stay of proceedings under section 15 must be made after to the party files his defence. This means that the immediate application for referral to arbitration under section 14 52 and the application for stay of proceedings pending referral to arbitration under section 15 will always miss each other and are mutually exclusive. A party who has a chance to make the immediate application for referral to arbitration under section 14 does thereby lack the locus to apply for stay of proceedings under section 15. Equally a person who gets a locus to apply for stay of proceedings under section 15, will have already missed the boat and therefore lack the locus to make the immediate application for referral to arbitration under section 14 of the Arbitration Act. Thus, an application for stay of proceedings under section 15 can only be done to await determination of the proceedings under section 14 for the delayed application for referral to arbitration. It should be remembered here that where a person makes the immediate application for referral to arbitration under section 14 of the Arbitration Act. (e) An application for stay of proceedings under section 15 of the Arbitration Act, CAP 15 cannot be brought unless the applicant has already applied for referral of the matters in dispute to arbitration which matters were brought by claim or counter claim, under section 14 of the Act. A person is required to apply for referral of the matter to arbitration latest on the date he files his defence. Therefore where a person has missed the opportunity to make the immediate or the delayed applications for referral to arbitration under section 14 of the Arbitration Act, he cannot be entitled to apply for stay of proceedings under section 15 of the Arbitration Act. In terms of section 15 (1) of the Arbitration Act, an application for stay of proceedings in respect of the matters in the claim 53 or counterclaim, is made so as to await the Court's decision on whether or not to refer to matters in dispute to arbitration pursuant to section 14. Therefore, where one has not applied for referral of the dispute to arbitration in conformity with the dictates of section 14, the Court cannot entertain his application for stay of proceedings because there will be no pending referral to arbitration proceedings in respect of a matter which under the agreement is to be referred to arbitration. (f) The Court may not grant an order for stay of proceedings where it is satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed. This happens in variety of circumstances under which the arbitration agreement invoked by the party may be found to be non-existent, null and void, inoperative or incapable of being performed. These include where there is no consent or no valid consent to the alleged arbitration agreement; the arbitration agreement is not validly transferred to the party making the stay application or to the party responding thereto; where the applicable formal requirements applicable to the agreement were not met; where conditions precedent to the arbitration agreement taking effect were not fulfilled; where a once- existing arbitration agreement has ceased to be binding on grounds of termination, rescission, abandonment, repudiation, waiver and the like; where the dispute is in arbitrable pursuant to mandatory, public policy­ based rules which prohibit enforcement of the arbitration agreement; where it is shown to be so unfair or one-sided as to be non-binding under the rules of contract applicable to the case; where the Arbitration 54 agreement designates an arbitral institution or appointing authority that is either non existing or uncooperative; and where there is failure to commence arbitration within the deadline provided for in the arbitration agreement. In short, the Court has wider factors to consider before making a finding that the arbitration agreement is null and void, inoperative or incapable of being performed and thus decline to issue an order staying the proceedings under section 15 of the Arbitration Act. Section 15 of the Arbitration Act regulates only the stay of proceedings for the purposes of paving way for determination of an application for referral to arbitration being sought under section 14 of the Act and under other avenues. Putting sections 14 and 15 of the Arbitration Act, CAP 15 of the Laws of Tanzania (RE 2020) under scrutiny in order to attempt the unenviable task of interpreting them in a way that will give life and validity to each section, it is clear that the two may work in harmony in some cases and in disharmony in some. The following observations are worth noting: (i) A party to an arbitration agreement may apply for referral to arbitration under section 14 of the Arbitration Act, CAP 15 (RE 2020) without being entitled to apply for stay of proceedings under section 15 of the Arbitration Act, CAP 15, (RE 2020). This happens where one makes an immediate application for referral even before filing his defence to the substantive claim. Here the two provisions are mutually exclusive. 55 (ii) A party to an arbitration agreement may apply for referral to arbitration under section 14 of the Arbitration Act, CAP 15 (RE 2020) and still be entitled to apply for stay of proceedings under section 15 of the Arbitration Act, CAP 15, (RE 2020). This can happen where the applicant for referral to arbitration makes his delayed referral application at the time of filing his defence to the substance of the claim. Here the two provisions complement each other. Like I said, perhaps the foregoing explanation wouldn't have been necessary for the determination of the present matter. However, as the Learned Counsel submitted in length on section 14 (1) of the Arbitration Act, it was justifiable to analyse the law that formed the basis of their arguments before proceeding to determine the matters under consideration in this case. Back to the case at hand, in responding to the first preliminary point raised by the Court, the Learned Counsel for the Plaintiffs submitted that the phrase "not later than the date of submitting the statement of claim to the substance of the claim" under section 14(1) CAP 15 refers to the date of filing the Written Statement of Defence. They argued, therefore, that an application to stay a suit and refer the matter to arbitration cannot be made by a party after filing his Written Statement of Defence. The Learned Counsel for the Plaintiffs, in my settled view, a bit mixed up the application for referral to arbitration under section 14 and an application for stay of proceedings under section 15 of the Arbitration Act. It is the applicant in an application to refer the matter to arbitration under section 14 who is not allowed to bring the referral application after or subsequent to filing his written Statement of 56 Defence. He has an upward limit after which he cannot apply for an order of referral to arbitration under section 14 of the Arbitration Act, anymore. On the other hand, a party making an application for stay of proceedings under section 15 of the Arbitration Act, is allowed to bring his application after having filed his defence. Actually, he can only be allowed to do so after having filed his defence to the substance of the claim. He has a downward limit of ensuring the minimum preconditions are satisfied before he can make his application. Therefore, an application for stay of proceedings can, and should where necessary, be made only after filing of the defence to the substance of the claim. The Learned Counsel for the Plaintiffs argued that the time limit to make an application for referral to arbitration in this case has elapsed as both parties have already filed all their pleadings as well as their witness statements hence having knowledge of the evidence of each other, something which will become prejudicial to the Plaintiff if the matter were to start afresh in arbitration. The Learned Counsel for the Defendants argued that the time limits under section 14(1) of the Arbitration Act do no apply to the Defendants, in the current situation where the issue of referral to arbitration was raised by the Court suo mottu. He used the same argument to distinguish the two authorities cited by the Learned Counsel for the Plaintiffs. I find the arguments by the Learned Counsel for the Plaintiffs on this aspect, sound. As it has been shown herein, a defendant who wishes to apply for an order of referral to arbitration of the action filed in Court under section 14 of the Arbitration Act, CAP 15 (RE 2020), must do so before he 57 files his defence to the substantive claim or not later than when filing his statement of defence, not thereafter. Again, there are some preconditions to be fulfilled before his application for referral can be considered and granted. As it was held in the case of the Branch Manager, Magma Leasing and Finance Limited and Anr. V. Potluri Madhavilata and Anr. (Manu/SC/1672 of 2009), by the Supreme Court of India at Paragraph No.22 of the Judgment, to which I subscribe to, that: "for its applicability, the following conditions must be satisfied: (a) that there exists a valid arbitration agreement; (b) that an action has been brought to Court by one party to the arbitration agreement against the other party; (c) that the subject matter of the suit is same as the subject matter of the arbitration agreement; (d) that the other party before he submits his first statement ofthe substance ofthe dispute, moves the Court for referring the parties to arbitration; and (e) that along with the application the other party tenders the original arbitration agreement or duty certified copy thereof." 58 In the case at hand, whereas conditions (a), (b) and (c) are satisfied, I find that conditions (d) and (e) are not satisfied. The other party to this suit, namely the Defendants, before submitting their first statement of the substance of the dispute, did not move the Court, by way of an application, to refer the parties to arbitration. Also, the Defendants did not at any time tender in Court the original arbitration agreement or a duly certified copy thereof to accompany any application for referral to arbitration. Section 14(1) of the Arbitration Act, CAP 15 (RE 2020) does not apply in the situation at hand where the issue of referral to arbitration was raised by the Court and not by the parties through a formal application preceded by a notice of the application to the other party. Therefore, I asked myself whether a Court can, suo mottu, raise the issue of referral to arbitration under section 14 of the Arbitration Act or the issue of stay of proceedings under section 15 of the Arbitration Act or both referral and stay under both provisions? My answer is in the negative to all the three questions, in so far as sections 14 and 15 of the Arbitration Act, CAP 15 (R.E 2020) are concerned. Looking at section 15 (1) of the Arbitration Act, CAP 15 (RE 2020), it is clear that an application for stay of proceedings under it can be brought by a party to an arbitration agreement against whom legal proceedings are brought. Not by the Court suo mottu. At this juncture also I should hasten to address the allegation of suffering prejudice on the part of the Plaintiffs in the event of an order being granted referring the matter to arbitration, for their having disclosed their evidence to the Defendants. That argument does not hold water. Both sides 59 have filed in Court their pleadings and their witness statements. No party would be more prejudiced. Again, in arbitration proceedings, both parties will normally present their evidence before the arbitrator either written or oral and therefore normally parties will get an opportunity to know the cases against each other well in advance in the same way like in a trial. Discovery and inspection of documents is not uncommon in arbitration proceedings. The argument by the Plaintiffs' Counsel would hold water if the method of ADR to be pursued were an amicable one like mediation and the like wherein parties might withhold some confidential information from the other side but share it only with the neutral third party in strict confidentiality. That is not the case with regard to arbitration whose procedure is akin to trial. I find the argument to be without merit. Whereas the provisions of sections 14 and 15 of the Arbitration Act, CAP 15 (RE 2020) allow the parties to the arbitration agreement to bring applications for referral of the matter to arbitration or stay of proceedings, respectively, that is not the case in the present case. It was the Court itself which raised the preliminary point of law that this dispute was not referred to arbitration by parties contrary to Clause 8 of Annexture II to the Banking Facility of 16th May 2016. Now that I have already found that under section 14 of the Arbitration Act, the referral of the action to arbitration should be applied by a party to the arbitration agreement, can the Court still be mandated, in deserving circumstances, to issue orders of referral to arbitration and or stay of proceedings pending the referral to arbitration? My answer is in the affirmative but I should add that such powers are found 60 outside sections 14 and 15 of the Arbitration Act. Where does the Court derive those powers from? Firstly, there is section 7-(l) of the Civil Procedure Code, CAP 33 of the Laws of Tanzania. It provides that: "Subject to this Act the Courts shall havejurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred." In the case at hand, I find that parties had, by their agreement chosen another forum for determination of all their disputes, controversies and claims arising from the Credit Facility Letter of 16th May 2016, and not this Court. Upon an inquiry, the Defendants expressed their continued desire and commitment for the parties to be held to their bargain. I find the arbitration clause in this case is valid and it is a bar to the Court from taking cognizance of the present suit. I have no reason not to accord parties the opportunity to live to the implications of their agreement that was freely entered into by them. In the case of Scova Engineering Spa and another Versus Mtibwa Sugar Estates Limited and 3 Others, Civil Appeal No. 133 of 2007 decided by the Court of Appeal of Tanzania, at page 16 the Court of Appeal held that: "applying the above legal position to the facts of the case, it is ineluctable that by clause 1.9.2 of the agreement the appellants, on one hand and the 61 second, third and fourth respondents on the other, chose in dear, explicit and specific terms that the Courts of Rome, in exclusion of other Courts, would be their forum for litigating any dispute between them in connection with the said agreement. That the agreement bound the parties and it was not open for the appellants to resort to refuse to take cognizance of the suit and rightly bound the parties to their bargain." At page 19 of case the Court of Appeal held further that: "The upshot of the matter is that the appeal is without merit as we uphold the High Court's refusal to assume jurisdiction over the matter. Accordingly, the appeal stands dismissed. However, in view of the circumstances of this matter, we leave the parties to bear their own costs. " Insisting on the need for the Court to allow parties to exhaust their own­ chose mode of dispute resolution, Justice Peter Tochtermann, writes in his work: Agreements to Negotiate in the Transnational Context — Issues of Contract Law and Effective Dispute Resolution, Dispute Resolution Institute at Hamline University, St. Paul, MN (USA): "Parties regularly include dispute resolution clauses into their contracts to make provision for future 62 conflicts. Before being allowed to bring a claim in the respective state Court or file a request for arbitration, the dispute resolution clause may require the parties to resort to structured negotiations or mediation. Only after such an attempt amicably to resolve the dispute has been made may they proceed to a final and binding decision by a Court or an arbitral tribunal." Secondly, actually, the Civil Procedure Code Cap 33 of the Laws of Tanzania, which I am entitled to resort to in terms of Rule 2 of the Commercial Court Rules, puts much emphasis on parties taking recourse to alternative dispute resolution processes including arbitration. Section 10A(2)(d) of the Civil Procedure Code, CAP 33 of the Laws of Tanzania (R.E 2019) obliges parties to take bonafide steps to resolve their disputes outside the Court by considering whether the dispute could be resolved by a process other than a Court action, including reconciliation, negotiation, mediation, arbitration, warning, diversion, as applicable. The provision provides expressly that: "10A.-(l) For the purposes of this Act, a person shall be deemed to have taken bonafide steps to resolve a dispute ifthe steps taken by the person in relation to the dispute constitute a sincere and genuine attempt to resolve the dispute out of Court, having regard to 63 the person's circumstances and the nature and circumstances of the dispute. (2) For purposes of this Act, the following steps may be taken by a person as part of bonafide steps to resolve a dispute with another person- (a) notifying the other person of the issues that are, or may be, in dispute, and offering to discuss them with a view to resolving the dispute; (b) responding appropriately to any notification referred to under paragraph (a); (c) providing relevant information and documents to the other person to enable the other person to understand the issues involved and how the dispute may be resolved; (d) considering whether the dispute could be resolved by a process other than a Court action, including reconciliation, negotiation, mediation, arbitration, warning, diversion, as applicable; (e) if a process referred under paragraph (d) is agreed to- (i) agreeing on a particular person to facilitate the process, where feasible; and 64 (ii)attending the process; (f) if a process agreed under paragraph (e) is conducted but does not result in resolution of the dispute, considering a different process; or (g) attempting to reconcile or negotiate with the other person or otherwise engage in independent evaluation, with a view to resolving some or all the issues in dispute, or authorizing a representative to do so, before escalating the matter to mediation or arbitration. (3) For avoidance of doubt, the provisions of subsection (1) shall not limit the steps that may constitute taking bonafide steps to resolve a dispute. (4) The provisions of this section shall apply to all proceedings intended to be initiated in Court. "(Underlining supplied) In the case at hand, the parties under Clause 8 of Annexture II to their Banking Credit Facility Letter of 16th May 2016, have agreed to submit to arbitration "all disputes, claims or controversies" arising out of or in connection with their agreement. However, upon the occurrence of the present dispute which is among the ones envisaged under their agreement to arbitrate, they rushed straight to Court without regard to the requirement 65 to refer the matter to arbitration. They are obliged to take bonafide steps under section 10 A (2)(d) of the Civil Procedure Code and perform their contractual obligations by taking their dispute through arbitration. Arbitration is their agreed process of dispute resolution. Instead, they have resorted to Court litigation in violation of not only their own agreement, but also section 10A of the Civil Procedure Code. I hold the parties responsible to their bargain and I refer them to arbitration. Thirdly, in accordance with the inherent powers of the Court for judicial case management, the Court is empowered to refer parties to their agreed mode of dispute resolution including arbitration. Susan Lazer, (2021) in her work "the Principle of Orality: An Analysis of the Principles Governing the Prevalence of Direct Oral Testimony in the English Adversarial Trial System and the Impact of Reforms to Reduce its Status, Doctoral thesis, University of Huddersfield, at page 59 and 66 writes that: "Judicial case management is at the fore of the revised system of civil litigation following the introduction of the civil procedure rules. Of all aspects of civil litigation, the control of procedure with the underlying objective of costs reduction has been the greatest shift from the system in existence prior......... It is notjust a judicial power to manage cases but a duty that is now at the heart of the system. No longer is it for the litigants to control the 66 pace of litigation, it is an obligation of the Court to ensure proper management of the system. Judicial case management is woven throughout the procedures within the civiljustice system." (emphasis supplied) The same situation obtains in Tanzania. Countless legal provisions insist on the need for justice to be dispensed timely and at affordable costs. Sections 3A and 3B introduced in our Code of Civil Procedure, the overriding objective principles similar to the ones obtaining in the UK. If the Court will leave it to the convenience of parties to the suit to institute their cases in total violation of what was agreed upon in their own agreement, that will defeat the overriding objective principles. By incorporating dispute resolution clauses in their contract, the parties had chosen self-regulation of their conduct in performance of their contract. It is in the interest of the justice system that such self-regulating schemes for dispute settlement should be encouraged and respected by parties for affordable and expeditious dispute resolution. I reproduce Section 3A and 3B of the Civil Procedure Code CAP 33 of the Laws of Tanzania: 3A.-(1) The overriding objective of this Act shall be to facilitate the just, expeditious, proportionate and affordable resolution of civil disputes governed by this Act. 67 ( 2) The Court shall, in the exercise of its powers under this Act or the interpretation of any of its provisions, seek to give effect to the overriding objective specified in subsection (1). 3B .-(1). For the purpose offurthering the overriding objective specified in section 3A, the Court shall handle all matters presented before it with a view to attaining the foiiowing- (a) just determination of the proceedings; (b) efficient use of the available judicial and administrative resources including the use of suitable technology; and (c) timely disposal of the proceedings at a cost affordable by the respective parties. (2) A party to civil proceedings or an advocate for such a party shall have a duty to assist the Court to further the overriding objective of this Act and, to that effect, to participate in the processes of the Court and to comply with the directions and orders of the Court." Before I finish, I think I should give some judicial touch to the inherent powers of the Court under the judicial case management principles, to refer 68 parties to arbitration and or stay proceedings. I will cite three cases. In Reichhold Norway ASA v Goldman Sachs International [1999] 2 Lloyd's Rep 567\X. was held that: "It has been observed that English Courts have accepted that a Court has "inherentjurisdiction" to stay its own proceedings where the action depends upon the outcome of an arbitration between either the same or different parties." In Gulf Hibiscus Ltd v Rex International Holding Ltd and Another [2017]SGHC210, it was held by the Supreme Court in Singapore that: "The power to order a case management stay is part of the Court's own inherent and immediate powers to controlproceedings before it...the existence ofan arbitration agreement between the parties would give strong grounds for a stay of Court proceedings taken in contravention of that agreement..." Finally, in Omolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2015] SGCA 57, Court of Appeal of Singapore had this to say on inherent powers of judicial case management on arbitration clauses: "We recognize that a plaintiff's right to sue whoever he wants and where he wants is a fundamental one. 69 But that right is not absolute. In appropriate cases, that right may be curtailed or may even be regarded as subsidiary to holding the plaintiff to his obligation to arbitrate where he has agreed to do so. The strength ofthe plaintiff's right oftimely access to the Court will therefore vary depending on the facts of each case... This does not mean that if part of a dispute is sent for arbitration, the Court proceedings relating to the rest of the dispute will be stayed as a matter of course. The Court must in every case aim to strike a balance between three higher-order concerns that may pull in different considerations: first, a plaintiff's right to choose whom he wants to sue and where; second, the Court's desire to prevent a plaintiff from circumventing the operation of an arbitration clause; and third, the Court's inherent power to manage its processes to prevent an abuse of process and ensure the efficient and fair resolution of disputes. The balance that is struck must ultimately serve the ends ofjustice." This Court also has inherent powers to manage the proceedings before it. I find it in the interest of justice in this case that the plaintiff should be prevented from circumventing the operation of an arbitration clause embodied in Annex II to the Credit Facility Letter dated 16th May 2016.1 still 70 have it in my mind the rule that the appropriate remedy for breach of the agreement to arbitrate is not damages, but is enforcement. In the exercise of the Court's inherent powers to manage its processes so as to prevent an abuse of process and to ensure the efficient and .fair resolution of disputes, I do hereby issue an order referring the action subject to this suit to arbitration pursuant to Clause 8 of Annexture II to the Credit Facility Agreement dated 16th May 2016. As the present suit is referred to arbitration and therefore outside cognizance of the Court; and as the referral of an action to arbitration entails that it cannot be further continued before domestic Courts; I find no need to determine the second issue of timely service of the Plaintiffs' Witness Statements upon the 4th Defendant and its implications since this Court is no longer seized of the matter thus referred to arbitration. As the preliminary issues were raised by the Court suo mottu, I make no order as to costs. In fine, I do hereby exercise the inherent judicial powers of case management and refer the parties to arbitration pursuant to their agreement to arbitrate contained under Clause 8 of Annexture II to the Credit Facility Agreement dated 16th May 2016. As the preliminary point of law was raised by the Court suo mottu, I make no order as to costs. It is so ordered. 71 Ruling is delivered in Court this 12th July, 2024 in the presence of Ms. Frida Mollel and Ms. Upendo Mbaga, State Attorneys for the Plaintiffs; Mr. Pascal Mshanga, Advocate for the 4th Defendant also holding brief for Mr. Philemon Rutakyamirwa, Advocate for 1st, 2nd and 3rd Defendants; and Mr. Joseph Rugambwa, Advocate for the 5th Defendant. 72