in the matter of the arbitration ordinance cap another vs blueline enterprises ltd another 2003 tzhc 94 30 july 2003

IN THE HIGH COURT OF TANZANIA (DARES SALAAM DISTRICT REGISTRY)

AT D A R E S SALAAM MISC. CIVIL CAUSE N0.307 OF 2002 IN THE MATTER OF THE ARBITRATION ORDINANCE CAP.

AND

IN THE MATTER OF ARBITRATION

BETWEEN BLUE LINE ENTERPRISES LTD.... PETITIONER AND .'EAST AFRICAN DEVELOPMENT BANK... RESPONDENT

R U L IN G LUANDA. J : Basically this is an application to set aside an award o f the Sole Arbitrator, the late Hon. F.L. Nyalali, the retired Chief Justice. T his Court is clothed'w ith such powers. The same are provided under Section 15 o f the Arbitration Ordinance, Cap 15. The petitioner BLUE LIN E Enterprises Limited through their advocate Mr. M hango inadvertely referred the matter to fall under Section 14 instead o f S. 15 of the Ordinance. In view o f the arguments advanced by both parties, that is not fatal to the application. The respondent the East African Development Bank through their counsel Dr. Nguluma were much aware of the nature o f the application. So wrong citation is not fatal to the proceedings. Parties to this application were ordered to argue the application by way o f writing. Parties dutifully did that. Parties to the application through their respective advocates made thorough research. The cases cited are very useful. I appreciate very much. N ow back to the merits or otherwise o f the application. Briefly the facts o f the case as can be gathered from the record is to this effect: By a loan agreement dated 7th March, 1990 the Petition agreed with the Respondent to obtain a loan from the Respondent. A dispute in connection with that agreement arose. In terms o f Clause 8.03 of the said agreem ent that dispute was required to be referred to an

arbitration. The Respondent opposed the appointment o f an arbitrator. The m atter was referred to this Court for direction. However, the matter was settled and this court endorsed that settlement in that the late Hon. F.L. Nyalali was appointed as the Sole Arbitrator. But in the unlike event namely failure, neglect or refuses to act then one Mr. A.T.H. Mwakyusa o f NEDCO would take over. So Mr M w akyusa is an alternate Arbitrator. Due to illness, the Sole Arbitrator was unable to dispose o f the dispute speedily. Both parties to the dispute complained. The Sole Arbitrator put a proposal that Hon. Justice Bahati a retired judge to conduct the proceedings in lieu o f the Arbitrator. That proposal was rightly rejected as there is no proviso to that effect. The late Hon. Nyalali drew issues and dispatched to the parties. The documents contained both issues not in dispute and those indispute. It go further show ing or indicating how' the disputed ones are to be resolved. Some were by affidavits and some by way o f adducing evidence viva voce. Finally a Schedule o f filing the subm issions was put in place. That was on 27/6/2002. On 26/7/2002 the Sole Arbitrator was unable to proceed with the matter; the reason being the Respondent were yet to file their Counter Affidavit. The matter was adjourned to 15th August, 2002. But on 12th August, 2000 the petitioner through their advocate

wrote two letters to the Sole Arbitrator applying for adjournment as the main witness one Mr. John Lamba was indisposed and ask for m ore tim e to file a reply to the Counter Affidavit. Despite that request the Arbitrator was all out to hear the evidence from the Petitioner’s side. Indeed on « 29/9/2002 he sum m oned the parties and informed them that he had all the material required to dispose o f the m atter and he saw no need to prolong the matter, and that he would prepare his award and deliver to the parties. The Arbitrator did that. On 30/9/2002 he informed parties that the award w'as ready for collection on paym ent o f fees. The claims were dismissed with costs. It is this award w hich is the subject matter o f this application. I have carefully read the written submissions o f both learned counsel. Mr. M hango argued with force that the Sole Arbitrator was wrong in proceeding the way he did as the petitioner was not given an opportunity to reply to the counter affidavit, no oral evidence was adduced and no final submissions were made. In short he said the Petitioner was not given an opportunity o f being heard and therefore there was a miscarriage of justice. As earlier observed he cited a num ber o f case. To mention ju st a few (See M o ra n v. L lvod s 119831 2 All E R 200; RV T h a m e s M a g is'trate s’C o u r t e x p a rte P o le m i’s 119741 2A11 E R 1219) Dr. N gulum a supported the finding o f the Sole Arbitrator. First he cited S. 14 and s. 15 purporting to come from the Arbitrator Ordinance Cap.

15. On reading between the lines, these sections are from the Civil Procedure Code, 1966 Second Schedule. The Second Schedule to the Civil Procedure Code, 1966 applies when there is a suit pending and the parties agreed that any matter in difference between them shall be referred to arbitration, they m ay do so by m aking « an application in court so that the same be referred to arbitration. In our case there is no such thing. Arbitration started ab initio. The Schedule does not apply. Dr. N gulum a gave a long written submission on these sections. With due respect to Dr. N gulum a he missed the point. The Sole Arbitrator said he had all materials before him. The materials were pleadings, affidavit and counter affidavit. He did not say a word about reply to the counter affidavit which was yet to be filed and which is very crucial to the matter. And as to dispensing with calling witnesses the Sole Arbitrator did not give sound and convincing reason. Not only that he did not tackle the issues fram ed seriatim. And further to that he did not say a word about final subm issions. So there is failure on the party of the Sole Arbitrator to hear the parties and failure to accord opportunity the parlies present their cases. In M o r a n case quoted supra, Sir Donaldson said, J quote: “A failure to give a party reasonable and proper opportunity to tflcxX put forward his case and rebuilt

that o f the opposite party is undoubtedly capable of constituting “m isconduct” o f the proceedings justifyign the court in setting aside the award...” 1 am in agreement with that holding. In sum the application is allowed with costs in that:- i) The order o f 30/9/2002 is hereby quashed and the award set aside; and ii) I order the proceedings to commence afresh before Mr. Mwakyus It is so ordered a [. L u a n d U D G fc 30/ 7/2003 Ruling delivered before Mr. Mhango for Applicant, Dr. N gulum a for the respondent.