ms ardhi university vs ms kiundo enterprises t limited 2016 tzhccomd 2073 18 march 2016

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION)

AT PAR ES SALAAM MISCELLANEOUS COMMERCIAL CAUSE NO. 272 OH 2015 IN THE MATTER OF THE ARBITRATION ACT [CAP 15 OF THE RE 2002] AND IN THE MATTER OF AN ARBITRATION CONDUCTED BY HON. ARBIRTRATOR SHAIBU SALIMU LIKUMBO, QS

BETWEEN M/S KIUNDO ENTERPRISES (T) LIMITED (CLAIMANT) AND ARDHI UNIVERSITY (RESPONDENT) AND. IN THE; MATTER. OF AN INTENDED PETITION TO CHALLENGE THE AWARD EiY HON. SHAIBU SALIMU LIKUMBO, QS IN FAVOUR OF THE CLAIMANT, BY M/S ARDHI UNIVERSITY .................................................... PETITIONEk AND M/S KIUNDO ENTERPRISES (T) LIM ITED ......................RESPONDENT 25tn November, 2015 & 30th February, 2016

RULING MWAMBEGELE, 3 .: The petition, in the words of Dr. Mkombozi Mhina, learned counsel for the petitioner, uttered on 02.11.2015, was filed "to challenge the award which has been made a decree of this Court". I gather from the petition that the petitioner and respondent had entered into a Supervision Consultancy Agreement wherein, in the course of their services a dispute ensued between them leading to initiation of arbitration proceedings before the Arbitrator; one Shaibu Salim Likumbo, QS. It is notable that the respondent emerged a winner taking a!i that there was in their matter through an award which aggrieved the petitioner. The grounds for challenging the said award are stated in the petition at paragraph 4 (i) and (ii) as well as paragraphs 5 and 6 which are pleaded in the alternative. The respondent has, al the fore of its reply thereto, put to notice, both this court and the petitioner of a preliminary objection against the petition which it intended to raise at the first day of hearing the said petition. This objection is grounded on the point of law that: "The-petition is incompetent as the same violates S. 16 of the Arbitration Act, [Cap.15 R.E 2002]" On 2.5.11.2015, Mr. Salehe Njaa, learned counsel, appearing for the respondent stated, and in my view, rightly so, that .the preliminary objection (henceforth "the PO") had to be determined first and prayed for the

same to be disposed of by way of written submissions. The prayer was not objected by Ms. Eniddy Erasmus, learned counsel for the petitioner and thus the court proceeded to order the submissions schedule which has been complied with by the leaned counsel for both parties save for the rejoinder submissions which were filed on 04.01.2016 instead .of the scheduled 02.01.2016. I will disregard the said rejoinder submissions. The rejoinder submissions are expunged from the record of this case for being filed out of the scheduled time and without leave of this court being sought and obtained. Reverting to the written submissions, the argument by respondent's counsel in support of the PO is to the effect that the grounds stated in the petition for setting aside the award are neither improper procurement of an award nor a misconduct of the arbitrator so as to warrant the setting aside of the award. The learned counsel forcefully submits that the two are the only conditions upon which an award can be set.aside and therefore the Arbitrator's lack of jurisdiction pleaded as a ground by the petitioner does not fall within the ambit of section 16 of the Arbitration Act, Cap. 15 of the Revised Edition, 2002 (henceforth "the Arbitration Act"). To hammer his arguments home, two decisions are cited; namely, Terson Lim ited Vs Stevenance Developm ent Corporation [1963] 3 ALL ER 863 and Tanzania N

ational Electric Supply Com pany L id Vs Dow ans H oldings (Costa Rica) & Another, Miscellaneous Civil Application N o / 8 of 2011 (unreported). On the basis of such submissions, the learned counsel pray that the petition be dismissed with costs. On the other hand, on behalf of the petitioner, it has been strongly argued that the jurisdictional error is one among the misconducts and therefore covered under section 16 of the Arbitration Act and hence, it is submitted, the objection is baseless. This argument has been fronted on the basis of various Indian authorities including S teel A u thority o f India Ltd Vs Budharaja, Governm ent and M ining Contractor [1999] 8 SCC 122 and Associated Engineering Co. Vs Governm ent o f Andhra Pradesh [1991] 4 SCC 93. From another angle, citing M ukisa B iscuits M anufacturing Co. Ltd Vs W est End D istributors Ltd [1969] EA 696, it is further argued that ascertainment of whether there has been a jurisdictional error or misconduct requires a hearing and calling evidence to that effect. The attack does end there. The prayer to have the petition dismissed entirely was also faulted in that the same is based on only paragraphs 4 of the petition while there is also paragraph 6 which allege misconduct on the part of the arbitrator. I have astutely canvassed the respective learned submissions by the counsel for the parties and I commend both learned

counsel for the labour invested in them. As far as the PO is concerned, and in the light of the law as well as authorities and pleadings herein, I am certain this will not detain me much. The issue for consideration is whether an arbitral award can be challenged on ground of want of jurisdiction of the tribunal or arbitrator for that matter and or whether want of jurisdiction.is a ground in the ambit of section 16 of the Arbitration Act. In answering the above question, while warning myself not to tread onto the merits of the petition itself, I will be guided by the principle that when dealing with matters arising or pertaining to an arbitral award, this court is not concerned or'not dealing with the decision or award itself, but, rather, with the process by which it was reached or made, as well as the legality of the said decision. Simply put, the court is not supposed to deal with merits-of the award itself. The reason for this approach is not far to fetch. Arbitration being ingrained in a "party autonomy" principle based on the parties' agreement thereto, court's intervention therein and the outcome thereof is always supposed to be superficial rather than on merits since the court does not sit as an appellate institution - see: R ashid M oledina & Co (M om basa) Ltd and others Vs Hoim a Ginners Ltd [1967] 1 EA 645 and Russell on the law of Arbitration, Anthony Walton QC

(19th Edition) at page 430.. Guided accordingly, and without much ado, I find the preliminary objection to L be wanting in merit for the obvious reasons to follows shortly. First, as stated lately by the learned counsel for the petitioner in his final submission but succinctly so, the objection seems to be based on what is stated at paragraph i 4 of petition as shown hereinabove-. As I have stated, there are further I | paragraphs 5 and 6 pleaded in the alternative and without prejudice to the said para 4 which altogether make allegations against the arbitrator of either i stepping and acting outside his jurisdiction and ambit of the arbitration as well as misconducting himself. !- Simply put, since the term "misconduct" in its ordinary meaning connotes some wrongful or improper conduct on the part of the person whose decision is in question, it is certainly fair that acting in excess of one's jurisdiction arid or dealing with matters outside the scope of arbitration also amount to a misconduct - See the observations by Solomon, JA in D ickenson & Brow n Vs Fish e r’s Executors 1915 AD 166 referred to in the case of Cham pion Construction (PTY) Ltd Vs Alien and another, 2006 (2) BLR 56 (HC). Thus, it can be said that jurisdiction of the arbitral tribunal or arbitrator goes to the root of the whole arbitral proceedings and hence lack of the same is what vitiates the element of

legality of the proceedings and such an award thereof, thereby warranting this court's intervention. To vindicate that conclusion is the Chartered Institute of Arbitrators' International Arbitration Practice Guideline on Jurisdictional Challenge (available at ttps://www.ciarb.org/docs/default-source/practice- guidelines-protocols-and-rules/internationakarbitration- yuidelines2015/2015jurisdictionchallenges).- Therein, a commentary on the challenges to-jurisdiction of an. arbitrator is inter alia couched at page 11 thereof thus: "A challenge to jurisdiction may be either comprehensive or partial. A comprehensive challenge to jurisdiction relates to the arbitrators' authority to decide all aspects of. the dispute between all the parties. A partial challenge to jurisdiction is one directed at the arbitrators' authority to . decide a particular claim, counterclaim, or issue, or the arbitrators' authority over a particular party, for example, on the grounds that it falls outside of the scope of the arbitration agreement" Further to the foregoing, jurisdiction being the lifeblood of all judicial proceedings, where a court or tribunal for that matter lacks the same, the whole proceedings will be held a nullity no matter how smartly the said proceedings were conducted. As Lord Denning put it: "You cannot put something on nothing and expect . it to stay there. It will collapse". (see

Benjam in Leonard M acfoy Vs United African Co. [1961] 3 WLR 1405; [1961] 3 Ail E.R 1169) and also available at http://www.niaeria- law.orq/LawReportinq/1961/Beniamin%20Leonard% 20MacFov%20v%20Unit ed%20Africa%20Companv%20Ltd.htm). Apparently, therefore, an answer to the above posed question must be in the affirmative that want of jurisdiction of arbitrator or a tribunal is contemplated and thereby in the ambit of section 16 of the Arbitration Act to warrant institution of proceedings to challenge an award. As I have intimated above,, an investigation as to whether there was indeed misconduct or whether the arbitrator had or had no jurisdiction and or whether there are acts that were indeed done by him to amount to a misconduct thereby leading to improper procurement of the award, is not opportune as the exercise would entail going into the merits of the petition and its proof by evidence thereby disqualifying the point to be a PO in terms of the M ukisa Biscuit case (supra). It is rather for the foregoing reasons, I have found, as I intimated onset that the objection lacks merits. 1 will therefore not hesitate to overrule the same with costs. • That said and done, I have observed that this petition was filed following adoption and registration of the impugned Award as a Decree of this Court on 16.09.2015. As I have shown earlier above, Dr. Mhina learned counsel is aware of

this as he was recorded as saying so on 02.11.2015. The question that lingers immediately into my mind is whether or not this petition is not overtaken by events. Unfortunately, I had no advantage of the learned counsel's opinion when composing this ruiing. I was forced to ponder on it on my own, and finally decided to let it rest until I hear what the legal minds have to say before the hearing of the petition itself takes off. I accordingly direct the learned counsel to appear before this court on the date to be slated to address it on the question above posed and specifically whether this court has power to deal with an arbitral award which has been adopted and declared as its decree with a view of setting it aside. I am alive to the direction of the Court of Appeal in Tanzania Cotton M arketing B oard Vs Cogecot Cotton Com pany SA [1997] TLR 165 in which it stated: "...So far in our country the practice in matters of arbitration awards is that the court is moved by an application for an order for filing which is then followed by proceedings. On the basis of the Indian decisions we are persuaded to take the view that as a matter of law it is not necessary to conduct proceedings before an order for filing is made ... the receipt of the award by the Court Registry constitutes the filing of the award. Thereafter, the court is required to notify the parties who may wish to

challenge or to enforce the award in terms, of the law". On the basis of the direction by the Court of Appeal, I call upon them to leave no stone unturned to unearth an answer to the question posed above a as it will regularize the practitioners' understanding for future practice in the interest of justice. In the upshot, for the reasons stated, the PO is dismissed with costs. Order accordingly. DATED at DAR ES SALAAM this 18th day of February, 2016.

3. C M. MWAMBEGELE

JUDGE