infinity communications limited vs mic tanzania limited 2016 tzhccomd 2069 18 february 2016

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION)

AT PAR ES SALAAM MISCELLANEOUS COMMERCIAL CAUSE NO. 233 OF 2015 IN THE MATTER OF SECTION 8 (2) OF THE ARBITRATION ACT (CAP. 15 R. E.

2002)

BETWEEN INFINITY COMMUNICATIONS LIMITED............................ PETITIONER AND MIC TANZANIA LIMITED ................... .............................. RESPONDENT 25^ November, 2015 & 15th February, 2016 •

RULING MWAMBEGELE, 3.: The parties to this matter are also parties to a Service Agreement for Supply of Services Related to Subscribers Registration in which clause 29 thereof i relates to Dispute Settlement. Under the clause, the parties agree to refer i their disputes to an arbitrator. 1 On 25.05.2015 the petitioner wrote the respondent a letter informing'her that she wished to invoke ciause 29,1 of the Agreement. The letter met no response from the respondent. In yet another letter; dated 24.08.2015, the petitioner proposed to the respondent that one Charles Rwechungura be appointed as an arbitrator. Again, the petitioner received no response from the respondent. Having received no response to both letters, the first one being on the petitioner's intention to invoke clause 29.1 of the agreement and the other one on the proposal of the name of an arbitrator, the petitioner decided to invoke the provisions of section 8 (2) of the Arbitration Act, Cap. 15 of the Revised Edition, 2.002 respecting Power of the court in certain cases to appoint an arbitrator, umpire or third arbitrator. This provision reads: "If the appointment is not made within seven clear days after the service of the notice, the court may, on application by the party who- gave the notice and after giving the other party an opportunity of being heard, appoint an arbitrator, umpire or third arbitrator who shall

have the like powers to act in the reference and to make an award as if he had been appointed by consent of all parties." The petitioner has thus filed this petition seeking the indulgence of this court .to appoint one Charies Rwechungura as an arbitrator in a dispute between them. In an answer to the petition, the respondent objects the appointment of Mr. .Charles Rwechungura as an arbitrator to the dispute between the parties and that she has already communicated the objection to the petitioner. The respondent main reason for objection is ascribed to the fact that the principal officer of the petitioner is believed to hail from the same area as Mr. Charles Rwechungura and this premise, the impartiality of Mr. Rwewchungura as an arbitrator in the dispute between them, is doubted. The respondent proposes that instead of sourcing an arbitrator from unknown sources and whose impartiality is doubted, a resort should be made to the rules of arbitration available in Tanzania such as Tanzania Institute of Arbitrators (TIArbs) and National Construction Council (NCC). The respondent has also fiied a two-paragraph cross petition along with the answer to the petition in which she states in the main that the arbitrator in the dispute should- be appointed, in*accordance with the Tanzania Institute of Arbitrators (TIArbs) Arbitration Rules or the National Construction Council (NCC)

Arbitration Rules. In the answer to the cross petition, the petitioner insists that Mr. Rwechungura be appointed as arbitrator "otherwise the respondent should have proposed their choice arid leave the Honourable Court to decide". The petition and cross petition were argued before me on 25.11.2015 before me during which the petitioner was represented by Ms. Regina Mduma, learned counsel while the respondent had the services of Mr. Rosan Mbwambo, learned counsel. Before the hearing, Ms. Mduma had earlier filed skeleton written argument as required by* rule 64 of the High Court (Commercial Division) Procedure Rules, 2012 - GN No. 250 of 2012 (henceforth "the Ruies") in support of the petition and against the cross petition. Mr. Mbwambo did not file any and apologized at the oral hearing for *■> not doing so. Nevertheless, hearing the petition and cross petition proceeded because, in terms of rule the proviso to rule 64 of the Rules, such failure to file skeleton written arguments cannot hinder any hearing. At the oral hearing, Ms.'Mdurna reiterated what was stated in the petition, answer to cross petition as well as the skeleton written arguments which she opted to adopt from the'outset. She amplified that the reasons which have been fronted by the respondent for objecting Mr. Charles Rwewchungura's proposal for appointment are against the principles of natural justice.

The respondent, she charged, has failed to show if the proposed arbitrator has interest in the matter but simply averred that he and the principal officer of the petitioner are believed to hail from the same area which averment does not determine bias. ■ On the allegation that Mr. Charles Rwechungura is not trained and vetted by •recognized bodies, the learned counsel for the petitioner submitted that the learned counsel for the respondent ought to have attached documents to prove that fact. However, the foregoing notwithstanding, Ms. Mduma, saw no problems in arbitrating the matter under the National Construction Council Arbitration Rules as the agreement between them, from which the dispute stems, falls under that area; not under the TIArb Rules. She thus, in concession, prayed the court to appoint the arbitrator under the NCC Rules. On the other hand, Mr. Mbwambo, learned counsel, started by laying a foundation to the effect that the court has powers under the provisions of section 8 (2) of Cap. 15 to appoint an arbitrator essentially where the parties have failed to agree on one. In so doing, he submitted, the court has to 4 consider the reasons advanced for the proposed arbitrator. In the case jat h a n d /th e petitioner has advanced no reasons why Mr. Rwechungura j is suitable to be appointed as an arbitrator. No qualifications have been g M n . He stressed that

arbitration is a process that goes by the agreement of the parties and therefore choice of the arbitrator, impartiality and qualifications I are very crucial for arbitration proceedings. Any doubt, whether real p r apprehensive, on the impartiality or competence of the arbitrator has to be taken seriously. On this premise, the learned counsel proposed that Bn. ti arbitrator should be appointed under the TIArb Rules or NCC Rules. 1 I have considered the rival arguments by the learned counsel for the parties. i From the foregoing facts it is no gainsaying that the respondent does ro t want Mr. Charles Rwechungura to be appointed as an arbitrator in the dispijte between them. The-reasons given why Mr. Rwechungura should not be jso appointed are, to say the least, frivolous and have not been substantiated jat all.The fact that the proposed arbitrator; Mr. Charles Rwechungura, hcjils i from the same area as the principal officer of the petitioner is a m^re- allegation and does not point to the fact that the proposed arbitrator,! if appointed, will be impartial. j | There is also a serious allegation by the respondent's counsel to the effect that the said Charles Rwechungura does not have requisite qualifications to arbitrate the dispute and that he has not been approved by any recognized body. This is.very serious allegation. However, despite its seriousness, like the first

allegation, has not been substantiated at all. On this complaint, I find both parties are to blame for failure to prove or disprove this fact. Both counsel have brought to the court sheer allegations which have not helped the court to decide on the question whether or not Mr. Charles Rwechungura is or is not qualified to arbitrate the matter on account of qualifications. ButT tend to agree with Mr. Mbwambo, learned counsel that the choice of ah arbitrator is very crucial in the smooth arbitration of the dispute between the parties. In the premises, this court will not ignore any fear, whether apprehensive or real, on the lack of qualification or impartiality of ah arbitrator. In the circumstances, as he respondent has apprehensive fear that Mr. Charles Rwechungura may not be impartial in arbitrating the dispute between the parties. And in further view of the fact that the respondent doubts the qualifications of the said Mr. Charles Rwechungura, I find and hold that Mr. Charles Rwechungura, may not be an^ appropriate person to be picked on as an arbitrator of the dispute between the parties. \ # The foregoing said and done, lifckily, the parties are at one that the dispute between them be referred to the NCC for arbitration under the NCC Mr. Mduma, learned counse!7~cbhceded' to this fact because the dispute between them stems from a construction agreement between them.

There therefore seem to be a consensus between the parties that the arbitrator should be appointed from the NCC and the matter be dealt with under the NCC Rules. This is a choice of the parties. I think the arbitration of thjs dispute between the parties will be smoothly conducted going by the choice of the parties. . : This court thus appoints the National Construction Council (NCC) as an arbitrator of the- dispute between Infinity Communications Limited and MIC i anzania Limited. The petitioner is to refer the dispute between them to the said National Construction Council (NCC) for arbitration under the National 6 Construction Councii Arbitration Rules. This application succeeds to that extent. , I i The circumstances of this case are- such that no order as to costs should be made. I therefore order that each party should bear its own costs in this application. Order accordingly, DATED at DAR ES SALAAM this 18th day of February, 2016. J. C. M, MWAMBEGELE

JUDGE 7