CIVIL APPEAL NO 47 OF 2024 ORYX OIL COMPANY LIMITED OTHERS VS OILCOM TANZANIA LIMITED

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM f CORAM: WAMBALI. 3.A.. MASH AKA, J.A. And MASOUD, J.A.^ CIVIL APPEAL NO. 47 OF 2024 ORYX OIL COMPANY LIMITED . I st APPELLANT ORYX ENERGIES S A .............. 2nd APPELLANT VERSUS OILCOM TANZANIA LIMITED RESPONDENT (Appeal from the Ruling and Order of the High Court of Tanzania, District Registry at Dar es salaam) (Ismail. J.^ Dated the 18th day of October, 2022 in Miscellaneous Civil Cause No. 138 of 2022 RULING OF THE COURT &hJune & 12* September, 2024 WAMBALI. J.A.: The parties in this appeal, Oryx Oil Company Limited and Oryx Energies SA, the appellants and Oilcom Tanzania Limited, the respondent, on 18th November, 2016 entered into a Framework Agreement which led to other Performance Agreements. However, the execution of the Framework Agreement was not smooth as differences arose between the parties. The respondent claimed that the appellants breached the agreed upon commercial terms and conditions. The allegation culminated into a commercial dispute. As a result, pursuant to clause 21 of the Framework Agreement, the respondent referred the dispute to the arbitral tribunal. Three arbitrators were appointed to arbitrate the dispute. Nonetheless, before the arbitral proceedings commenced, the appellants, who were the respondents challenged the appointment of one of the arbitrators, Prof. Mussa Juma Assad and asked him to recuse from presiding over the proceedings on account of allegation of bias. As it turned out, the arbitrator declined the request. Particularly, he stated thus: 7 have therefore failed to find any realistic reasons o f fear o f bias upon which a seriously minded person would point a finger at I am aware as an arbitrator, I should not recuse myself in conduct o f any proceedings for flimsy reasons. This is because there is nothing to evidence that I have any interest in the outcome o f the arbitration process, which at any rate, will involve three arbitrators. I wish to state that if I accept the above application for recusal, in such a ground, I will be abdicating my arbitral responsibilities" The stance taken by the arbitrator as demonstrated in his response to the request regarding recusal prompted the appellants to approach the High Court through a petition which was registered as Miscellaneous Civil Cause No. 138 of 2022 in which they sought his removal from presiding over the 2 arbitration proceedings in terms of section 27 (4) (b) of the Arbitration Act, Cap. 15 (the Arbitration Act). After the High Court heard the parties' submissions for and against the removal of one out of three of the arbitrators, it concluded that the alleged feeling of bias by the appellants was more of a perception than a reality. Specifically, the presiding judge stated: "The feelings have not graduated to a higher level of reasonable apprehension or suspicion that would make a fair minded and informed member o f the public to hold that the arbitrator has any traces of bias. They are flimsy pretexts o f bias which do not pass an objective test; and are not anywhere enough to justify drawing of the inference o f bias". Ultimately, the High Court dismissed the appellants' petition with costs. Dissatisfied, the appellants lodged the instant appeal to this Court through a memorandum of appeal comprised of eight grounds of appeal. Essentially, the appellants urge the Court to allow the appeal, set aside the ruling and order of the High Court in Miscellaneous Civil Cause No. 138 of 2022 and substitute thereof with an order removing Professor Mussa Juma Assad from presiding over the arbitral proceedings as an arbitrator between the parties. 3 It is noteworthy that for the reason to be apparent shortly, we do not deem it appropriate to expose the detailed facts of the parties' arguments at the High Court concerning the removal of the arbitrator or reproduce the respective grounds of appeal herein. Before the appeal was scheduled and called on for hearing, the respondent had on 11th March, 2024 lodged in the Court a notice of preliminary objection comprising the following four points of law challenging its competence: "(i) The appeal is incompetent and bad in iaw as it intends to impugn a decision o f the Arbitrator and Arbitrators who are not parties to the appeai. (ii) The appeai is incompetent and bad in law as it is based on an interlocutory decision o f the High Court contrary to the requirements o f the iaw. (iii) The appeai is incompetent and bad in law for being preferred in disguise o f a petition for challenging the final award. (iv) That the appeal is incompetent for being sub- judice and overtaken by events following the final award being rendered by the arbitral 4 tribunal\ and the appellant taking steps to challenge the same before the High Court." The ruling of the Court is therefore in respect of the parties' submissions for and against the points of preliminary objection. At the hearing, the appellants were represented by Mr. Gasper Nyika and Ms. Faiza Salah, learned advocates whereas the respondent had the services of Mr. Thobias Laizer and Mr. Anthony Mark, also learned advocates. In determining the objections on the competence of the appeal, we propose to start our deliberation with the second point of law on whether the decision of the High Court is interlocutory. Basically, both in the written and oral submissions, the respondent's counsel strongly contended that the decision of the High Court in Miscellaneous Civil Cause No. 138 of 2022 is interlocutory and therefore no appeal lies to the Court. Mr. Laizer expounded that the said decision did not finally and conclusively determine the dispute between the parties in the arbitration proceedings that were still pending at the arbitral tribunal and therefore, the instant appeal is not properly before the Court in terms of section 5(2) (d) of the Appellate Jurisdiction Act, Cap. 141 (the AJA). To support his submission, he referred the Court to the decisions in Vodacom Tanzania Limited Public Company Limited v. Planetel 5 Communications Limited (Civil Appeal No. 43 of 2018) [2019] T2CA 239 (17 June 2019, TANZLII), Seif Sharif Hamad v. SMZ [1992] T.LR. 43, Murtaza Ally Mangungu v. The Returning Officer for Kilwa and Two Others, Civil Application No. 80 of 2016 (unreported) and Jitesh Jayantilal Ladwa and Another v. Dhiraljal Walji Ladwa and Others (Civil Appeal No. 435 of 2020) [2022] TZCA 526 (31 August 2022, TANZLII). The learned advocate emphasized that the decision of the High Court, the subject of the instant appeal, did not finally and conclusively resolve the substantive issues of the parties' dispute in the arbitral proceedings on merit apart from addressing the propriety of the composition of the arbitral tribunal members. He further argued that the law prohibits appeal to this Court on such interlocutory matters involving preliminary and procedural issues before commencement of arbitration proceedings because the efficiency and effectiveness of the arbitration process as an alternative dispute resolution mechanism may be significantly compromised and disputes would not come to an end expeditiously. He thus prayed that the objection on this point be sustained leading to the appeal being struck out with costs. Responding, both in written and oral submissions, Mr. Nyika argued that the instant appeal is not barred by section 5(2) (d) of the AJA because 6 the appellants' petition at the High Court was premised under sections 27 and 28 of the Arbitration Act in which the major issue was whether there were grounds to warrant removal of the arbitrator or not. He argued further that after the High Court dismissed the petition, there was no pending matter with regard to the removal or otherwise of the arbitrator before it to attract the application of the provisions of section 5 (2) (d) of the AJA regarding the propriety of the appeal before the Court. He insisted that the provisions of section 5(2) (d) of the AJA bars appeal against the proceedings before the High Court and not from the pending arbitral proceedings before the arbitral tribunal. Relying on the decision in Murtaza Mangungu (supra), Mr. Nyika argued that the Court has always applied the nature of the order test to decide whether the decision or order of the High Court, the subject of the appeal before it, is final with regard to the determination of the rights of the parties. Mr. Nyika emphasized that in Murtaza Mangungu, the Court stated further that the decision or order under consideration must be such that it could not bring back the matter to the same court, in this case, the High Court, He contended that since the arbitration proceedings were not before the High Court, the appellants are entitled to challenge the said 7 decision before the Court as section 5(2) (d) of the AJA is not applicable in the circumstances. The learned advocate maintained that the decision of the High Court in Miscellaneous Civil Cause No. 138 of 2022 is not a subject of other proceedings which were and are still pending at the High Court because those proceedings are challenging the final award and not the decision under consideration. He added that the decision of the High Court closed the door in pursuit of justice as regards the impartiality of the arbitrator and thus the appellants cannot raise again the same matter once the award is issued. In his submission, raising the same issue after the final award, would compel the High Court to seat against its own decision contrary to the requirement of the law. He argued that in the instant appeal, the arbitral proceedings are not the cause complained of before the Court. Rather it is the decision of the High Court concerning the impartiality of arbitrator which determined the matter finally as the petition was dismissed. Mr. Nyika contended that if the AJA had intended to prohibit appeals to the Court against the decisions or orders of the High Court emanating from arbitral proceedings pending before the arbitral tribunal or proceedings 8 from other forums, a pronouncement to that effect would have been vividly provided under section 5 (2) of the AJA. He concluded by submitting that all the decisions of the Court referred and relied upon by the respondent on the substance and context of the provisions of section 5 (2) (d) of the AJA are distinguishable with the facts in the instant appeal, and therefore not applicable. Ultimately, he beseeched the Court to overrule the objection on this point of law with costs. It is acknowledged that section 5(2) (d) of the AJA prohibits appeals to the Court on interlocutory decision or order of the High Court. The section provides thus: "5 (2) (d) no appeal or application for revision shall He against or be made in respect o f any preliminary or interlocutory decision o f the High Court unless such decision or order has the effect o f finally determining the su it" Admittedly, the reproduced provision aims to ensure that proceedings before subordinate courts are efficiently, timely, justly and effectively disposed of without being obstructed by unwarranted appeals emanating from interlocutory decisions or orders which do not finally resolve the substantive dispute between the parties. At this juncture, we also wish to 9 reiterate what was stated by the Court in Mahandrakumar Govindji Momani t/a Anchor Enterprises v. Tata Holdings (TANZANIA) Limited and Another, Civil Application No. 50 of 2002 (unreported) and rested in several decisions including Vodacom Tanzania Public Limited Company (supra) regarding the context of section 5(2) of the AJA: "One o f the pertinent reasons for paragraph (d) o f section 5 (2) o f the Appellate Jurisdiction Act, 1979 Is to stop the Irresponsible practice by which a party could stall the progress o f a case by engaging in endless appeals against interlocutory decisions or orders" Apparently, in resolving the issue whether the decision or order sought to be challenged is interlocutory or not, the Court has mostly relied on the nature of the order test which has been expressed in several decisions including those cited by the parties above. In Tanzania Motors Services Ltd and Another v. Mehar Singh t/a Thaker Singh, Civil Appeal No. 115 of 2005 (unreported), the Court sought guidance from the case of Bozson v. Artrincham Urban District Council (1903) 1 KB 547 wherein Lord Alverston stated as follows at page 548: "It seems to me that the real test for determining this question ought to be this: Does the judgment or 10 order, as made, finally dispose of the rights o f the parties? I f it does, then I think it might be treated as final order; but if it does not, it is then, in my opinion, an interlocutory order." Moreover, we are alive to the submission by Mr. Nyika that in all decisions of the Court referred and relied upon by the parties, consideration has always been on the decisions or orders made by the High Court on the proceedings pending before it as stipulated under section 5 (2) (d) of the AJA and not the decisions on proceedings pending before the arbitral tribunal or other equivalent forum. Therefore, he strongly and spiritedly contended that the ruling of the High Court, the subject of the instant appeal, finally determined the dispute between the parties with regard to the removal of the arbitrator on account of bias. In this regard, he added, as nothing was left at the High Court regarding the issue of removal of the arbitrator, the proceedings of the arbitral tribunal on the substantive dispute between the parties which had not been determined by then, cannot be taken into account in considering whether the complained of decision of the High Court is interlocutory or otherwise. The crucial question for our determination at this juncture is whether the High Court's decision finally determined the rights of the parties. We are 11 aware that in terms of section 27 (4) (b) of the Arbitration Act, a party may petition a court to remove an arbitrator. It is noteworthy that the word court is defined under section 6 of the Arbitration Act as follows: "6 (1) The term "court"- (a) in relation to domestic arbitration means the district court, resident magistrate's court, the High Court exercising its original or appellate jurisdiction or the Court o f Appeal: or (b) in relation to international arbitration•, means the High Court in the exercise o f its ordinary original civiljurisdiction For the purpose of this ruling, considering the nature of the arbitral proceedings which led to the appellants' petition at the High Court, the term "court" will be in relation to the definition prescribed under section 6 (1) (b) of the Arbitration Act. Reverting to section 27 (4) (b) of the Arbitration Act, it stipulates as follows: "27 (4) Nothing in this section shall affect the power o f the court to- (b) remove an arbitrator on the grounds specified under section 28." On the other hand, section 28 (i) of the Arbitration Act provides: 12 "28 (1) A party to arbitral proceedings may upon notice to the other party, to the arbitrator concerned and to any other arbitrator, apply to the centre to remove an arbitrator on any o f the following grounds: (a) That there are circumstances which give rise or justifiable doubts as to his impartiality; (b) That he does not possess the qualifications required by the arbitration agreement; (c) That he is physically and mentally incapable of conducting the proceedings or there are justifiable doubts as to his capacity to do so; or (d) That he has refused or failed to- (i) properly conduct the proceedings; (ii) use all reasonable dispatch in conducting the proceedings; or (iii) make an award and substantial injustice has been or will be caused to the applicant. (2) N/A (3) The arbitral tribunal many continue the arbitral proceedings and make an award pending an application to the centre under this section, (4) N/A 13 (5)N/A" (Emphasis added) Having considered the provisions of section 27 (4) (b) of the Arbitration Act under which the appellants' petition was premised, we are of the view that the legislature did not intend to clothe a party not satisfied with the decision of the High Court refusing or granting the application for removal of the arbitrator a further right of appeal to the Court. We shall explain. There is no doubt that the appellants' petition at the High Court in Miscellaneous Civil Cause No. 138 of 2022, whose decision is the subject of the current appeal, emanated from the arbitral proceedings before the arbitral tribunal which had the mandate to determine the dispute of the parties with regard to the alleged breach of the Framework Agreement. Considering the decision of the High Court, we are of the view that though nothing was left regarding the issue of removing the arbitrator, it did not close the door to the parties to go back to the arbitral tribunal to participate in the substantive proceedings concerning the determination of their dispute to its finality until the final award was issued. Besides, the High Court's decision did not close the door to the appellants to approach the same court to contest the final award in terms of section 74 (1) (a) and (b) of the Arbitration Act on substantive jurisdiction. In addition, under sections 75 and 14 76 of the Arbitration Act, a dissatisfied party is allowed to challenge the award on serious irregularity and through stating a special case to the High Court on a question of law arising out of the award made in the proceedings respectively. Moreover, an aggrieved party may also challenge or appeal to the court prescribed under section 6 of the Arbitration Act, as the case may be, against an award on supplementary provisions and on the effect of the order of the court as provided under sections 77 and 78 of the Arbitration Act respectively. For clarity, we deem it appropriate to reproduce the respective provisions hereunder: "S. 74 (1) A party to arbitralproceedings may, upon notice to the other parties and to the arbitrai tribunal, apply to the court- (a) challenging any award o f the arbitrai tribunal as to its substantivejurisdiction; or (b) for an order delaying an award made by the arbitral tribunal on the merits to be o f no effect, in whole or in part, on grounds that the arbitrai tribunal did not have substantive jurisdiction. (2) An arbitral tribunal may continue the arbitrai proceedings and make a further 15 award pending an application to the court under this section in relation to an award as to jurisdiction. (3) The court may, on determination o f an appiication under this section, make any o f the following orders- (a) confirm the award; (b) vary the award; or (c) set aside the award in the whole or in part. (4) Leave o f the Court shall be required for any appeal against the decision o f the court made under this section. " "S. 75(1) A party to arbitralproceedings may, upon notice to the other parties and to the arbitral tribunal, apply to the court challenging an award in the proceedings on the ground o fserious irregularity affecting the arbitral tribunal, the proceedings or the award. (2) For the purpose o f this section, Vserious irregularity" means an irregularity o f one or more o f the following kinds which the court considers has caused or is iikeiy to cause substantiai injustice to the applicant: 16 (a) failure by the arbitral tribunal to comply with section 37; (b) the arbitral tribunal has exceeded its powers otherwise than by exceeding its substantive jurisdiction; (c) failure by the arbitral tribunal to conduct the proceedings in accordance with the procedure agreed by the parties; (d) failure by the arbitral tribunal to deal with all the issues that were raised before it; (e) any arbitral institution or other institution or person vested by the parties with powers in relation to the proceedings; or the award exceeding its powers; (f) uncertainty or ambiguity as to the effect of the award; (g) the award being obtained by fraud or procured in a manner that is contrary to public policy; 17 (h) failure to comply with the requirements as to the form o f the award; or (i) any irregularity in the conduct o f the proceedings or in the award which is admitted by the arbitral tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award. The court may, where it determines that there is serious irregularity affecting the arbitral tribunal, the proceedings or the award- (a) remit the award to the arbitral tribunal, in whole or in part for consideration; (b) set aside the award in whole or in part; or (c) declare the award to be o f no effect, in whole or in part: Provide that, the court shall not exercise its power to set aside or to declare award to be o f no effect, in whole or in part, unless it is satisfied that it will be inappropriate to remit the matters in question to the arbitral tribunal for consideration. (4) The leave o f the court shall be required for any appeal against a decision o f the court made under this section." VS.76 (1) Unless otherwise agreed by the parties, a party to arbitral proceedings may, upon notice to the arbitral tribunal, state in a form o f special case to the court on a question o f law arising out o f an award made in the proceedings. (2) N/A (3) N/A (4) N/A (5) The case shall be set down for hearing as a suit instituted in an ordinary manner and where the case has been entertained, the court may, by order- (a) confirm the award; (b) vary the award; (c) remit the award to the arbitral tribunal, in whole or in part; for consideration in the light o f the court's determination; (d) set aside the award in whole or in part; or (e) declare the award to be o f no effect in whole or in part: 19 Provided that, the court shall not exercise its power to set out aside an award, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the arbitral tribunal for consideration. (6) The decision o f the court under this section shall be treated as a judgment of the court for the purpose o f further appeal. "S. 77 (1) The provisions o f this section shall apply to an application or an appeal under sections 74 or 76 respectively'' "S. 78 (1) The following provisions shall have effect where the court makes an order under sections 74, 75 and 76 with regard to the award" (Emphasis added) It is noted that under the provisions of sections 74, 75 and 77 of the Arbitration Act, where the High Court makes any order confirming the award, varying the award, remitting the award to the arbitral tribunal for consideration or declaring the award to be of no effect, an aggrieved party has a right to appeal to the Court in accordance with the law as indicated above. 20 It is in this regard that in terms of regulation 65 of the Arbitration (Rules of Procedure) Regulations, 2021 G.N. No. 146 of 2021, leave to appeal to the Court is required upon delivery of the decision or order of the High Court in terms of section 74 (3) of the Arbitration Act. Regulation 65 provides thus: "65 (1) A leave to appeal in terms o f section 74 (4) o f the Act shaii be by way o f chamber summons supported with an affidavit and shall be filed within fourteen days upon delivery of any orders stated under section 69 (3) (sic). (2) The Respondent shall be entitled to reply on the application for leave by filing counter affidavit within fifteen days upon being served with the application by the Applicant (3) Any appeal to the Court of Appeal shall be governed by the existing laws regulating appeal to the Court of Appeal." Gauging from the reproduced provisions of regulation 65, we are of the view that the reference to section 69 (3) of the Arbitration Act in sub­ regulation (1) of the Regulations instead of section 74 (3) is a clerical error. We say so because before the proclamation of the Revised Edition of the Arbitration Act on 30th December, 2020 which incorporated amendments up 21 to the 30th April, 2020, under the previous edition, the current section 74 was section 69 and thus the reference under regulation 65 (1) was to section 69 (3) which is currently section 74 (3). Be that as it may, our close reading of the reproduced provisions of sections 74, 75, 76, 77 and 78 of the Arbitration Act regarding the right of an aggrieved party to appeal against the award delivered by the arbitral tribunal leads us to the considered view that, there is no indication that an appeal to the Court from the decision of the High Court on a preliminary matter regarding the removal of the arbitrator or otherwise made under section 27 (4) (b) of the Arbitration Act is directly or impliedly contemplated. Apparently, an appeal to the Court may not have been contemplated. We say so because, allowing an appeal on such preliminary issue which has been dealt with twice, both by the arbitral tribunal and the High Court, would have defeated the very purpose of the nature and circumstances of the arbitration process. We are of that view because arbitration process aims to have less complex arbitral proceedings procedures than those of the ordinary court and to ensuring speedy dispensation of the dispute between the parties. In short, arbitration embodies a multifaceted approach aimed at fostering efficiency, fairness and impartiality in the resolution of disputes outside the tradition court system. 22 We are, therefore of the considered view that the absence of indication of the right of appeal for an aggrieved party over a decision of the High Court made under section 27 (4) (b) of the Arbitration Act aimed at avoiding undue delay of arbitration proceedings on preliminary matters which are considered and determined by both the arbitral tribunal and the High Court. Moreover, the move aimed at preventing such aggrieved party from holding back a potential challenge to the award in terms of the provisions stated above once an unfavorable decision has been rendered. Indeed, the move intended to guarantee and preserve the integrity of the arbitration process by not delaying arbitral proceedings during the preliminary stage or impacting the overall outcome of the dispute. We wish to emphasize that in a properly functioning legal system, one of the basic principles in the administration of justice is the duty of a court to ensure that the proceedings before it is conducted in orderly manner and in accordance with the law in order to facilitate finality of disputes and to eliminate confusion. This is the essence of section 5 (2) (d) of the AJA. We are further of the view that if the law would have intended to have an appeal to this Court upon a decision to remove the arbitrator in terms of section 27(4) (b) of the Arbitration Act, it would not have at the time granted 23 the power to the arbitral tribunal to have discretion to continue with the arbitral proceedings and make an award pending an application for such removal to the centre as stated under subsection 28 (3) of the Arbitration Act. The same discretion is given to the arbitral tribunal in terms of section 74 (2) of the Arbitration Act in case of a challenge to an award by a party on substantive jurisdiction. It is thus not surprising that, according to the record of appeal, the documents lodged by parties for and against the notice of preliminary objection and the written and oral submissions, it is a plain fact that after the decision of the High Court on 18th October 2022, the appellants made several unsuccessful attempts to stay arbitration proceedings both before the arbitral tribunal and the High Court. Following the refusal, the appellants returned to the arbitral tribunal and participated fully in the proceedings to the end until the final award was delivered on 30th November 2023. More importantly, as acknowledged by the parties, though the instant appeal was lodged on 23rd January, 2024, the appellants have already taken steps to contest not only the registration and recognition of the final award but also the legality of the award at the High Court as required by law. 24 In the circumstances, we are satisfied that considering the nature of the arbitral proceedings and the petition which the appellants placed before the High Court for the removal of the arbitrator on account of bias in terms of section 27 (4) (b) of the Arbitration Act, the respective decision was interlocutory. All in all, from the foregoing, considering the provisions of the Arbitration Act we have made reference to, the nature of the arbitration process, the arbitral proceedings that were pending before the arbitral tribunal and the circumstances of the application which was placed before the High Court, whose decision is the subject of this appeal, we cannot safely conclude that the said decision finally and conclusively determined the rights of the parties. Indeed, as we have intimated above, the decision of the High Court did not close the doors to the appellant to participate in the arbitral proceedings and go back to the same court to contest the award as they have done. We thus hold that the decision of the High Court falls within the prohibition of section 5(2) (d) of the AJA. In the circumstances, we respectfully disagree with the learned counsel for the appellants that the decision finally determined the dispute between the parties because there was nothing left at the High Court with regard to the application for removal of the arbitrator. 25 In the event, we sustain the second preliminary point of objection. To this end, considering the decision we have reached, we do not find it necessary to deliberate and determine the remaining three points of objection. Ultimately, we find that the appeal is incompetent for offending the provisions of section 5(2) (d) of the AJA. Consequently, we strike out the appeal with costs. DATED at DAR ES SALAAM this 10thday of September, 2024. F. L. K. WAMBALI JUSTICE OF APPEAL L. L. MASHAKA JUSTICE OF APPEAL B. S. MASOUD JUSTICE OF APPEAL The Ruling delivered this 12thday of September, 2024 in the presence of Mr. Gasper Nyika, learned counsel for the Appellants, Ms. Oliver Mark, learned counsel for the respondent with Mr. Usama Sheikh, Principle Officer of the Respondent is hereby certified as a true copy of the original.