CANOPIES VS TARURA MISC

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM MISC. COMMERCIAL APPLICATION NO. 23410 OF 2024 IN THE MATTER OF AN APPLICATION TO RECOGNISE THE DOMESTIC ARBITRAL AWARD BY ENG. JULIUS MAMIRO DATED 21ST JUNE, 2024 AS BINDING AND ENFORCEABLE AND IN THE MATTER OF AN APPLICATION FOR LEAVE TO ENFORCE THE SAID AWARD AS JUDGMENT OF THE COURT AND BE REGISTERED AS DECREE OF THE COURT BETWEEN CANOPIES INTERNATIONAL (T) LTD……...………………PETITIONER VERSUS TANZANIA RURAL AND URBAN ROADS AGENCY (TARURA)……………………………………………...RESPONDENT RULING 1 Date of last order: 14/11/2024 Date of Ruling: 14/11/2024 GONZI, J. Under Section 78 (1) and 79 of the Arbitration Act, Act No. 2 of 2020 and Rule 63 (1) of the Arbitration (Rules of Procedure) Regulations, 2021 the Petitioner filed the present petition praying for the following reliefs: 1.That the Arbitral Award dated 21st June 2024 by Eng. Julius Mamiro in the Arbitration between the parties be recognised as binding and enforceable. 2. That the Arbitral Award in (1) above be registered as the decree of this honourable court. 3. That the applicant be granted leave to enforce the said Arbitral Award upon be registered as a court decree. 4. Costs of the petition be granted. 5. Any other order (s) /relief this honourable Court may deem just and proper to grant in the interest of justice. 2 The Petition was accompanied by an Affidavit Verifying the Petition sworn by Honest John Mushobozi, Principal Officer of the Petitioner Company. The Petition was no opposed by the Respondent’s side. On 14th November, 2024 when the matter was called before me, Mr. Edrward Chuwa and Ms. Anna Lugendo, Learned Advocates appeared for the Petitioner. For the Respondent Mr. Shabani Mdagano, Principal State Attorney, Mr. Bakari Bakari, Principal State Attorney, Mr. Baraka Nyambita, Senior State Attorney, and Ms. Nkamba Mshuda, State Attorney, appeared. The proceedings of 14th November 2024 before me were brief as follows: “MR. CHUWA: My Lord we brought this application for registration of the Award. The other side are not objecting. We pray that the Award be registered as a decree of the Court with no costs. MR. NYAMBITA; My Lord we do not object the recognition and enforcement of this Award. COURT: Since recognition and enforcement of this Award is not resisted by the Respondent and there is no statutory bar to it, I do hereby make an order for its recognition for enforcement as a Decree of this 3 Court. Ruling and Drawn Order to that effect will issue accordingly.” The present Ruling, therefore, is written on the basis of the above proceedings. The present arbitral award is domestic arbitral award. The grounds to be used by the court in deciding whether or not to grant an application for recognition and enforcement of a domestic or foreign arbitral Award as an Order or a Decree of the Court, are stipulated under section 83(2) of the Arbitration Act, Cap 15 of the Laws of Tanzania. Section 83(2) provides that: (2) Notwithstanding subsection (1), a domestic arbitral award or foreign arbitral award shall be refused if (a) at the request of the party against whom it is invoked, that party furnishes to court proof that- (i) parties to the arbitration agreement, pursuant to the law applicable- (aa) lacked capacity to enter into the agreement; or (bb) were not properly represented; 4 (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, under the law of the state where the arbitral award was made; (iii) the party against whom the arbitral award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration, or it contains decisions on matters beyond the scope of the reference to arbitration, provided that, if the decisions on matters referred to arbitration can be separated from those not so referred, that part of the arbitral award which contains decisions on matters referred to arbitration may be recognised and enforced; (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing any agreement by the parties, was not in 5 accordance with the law of the state where the arbitration took place; or (vi) the arbitral award has not yet become binding on the parties or has been set aside or suspended by a court of the state in which, or under the law of which, that arbitral award was made; (a) the making of the arbitral award was induced or affected by fraud, bribery, corruption or undue influence; or (b) if the Court finds that- (i) the subject matter of the dispute is not capable of settlement by arbitration under any written laws; or (ii) the recognition or enforcement of the arbitral award would be contrary to any written laws or norms. It is noteworthy that the 6 grounds stipulated under section 83(2)(a) are substantive grounds which can only be considered by the Court if the person against whom the award is sought to be enforced, invokes them as the grounds for his resisting the recognition and enforcement of the domestic or foreign arbitral award. On the other hand, the 2 grounds stipulated under 6 section 83(2)(b) are ex officio grounds which can be raised and considered by the court suo mottu even where the party against whom the award is sought to be recognized and enforced does not raise them or any other ground. It is always the duty of the Court to satisfy itself on whether or not the arbitral award sought to be recognized and enforced as a decree of the Court is in conformity with the two ex-officio grounds under section 83(2)(b of the Arbitration Act even if neither party to the application or petition raises them or any other ground. It is trite that the current application is not opposed by the Respondent. During the hearing, the learned counsel for the Respondent was loud and clear that they are not opposing the recognition and enforcement of the award as a decree of the court. The grounds under section 83(2)(a) of the Arbitration Act, therefore, were not raised by the parties and thus are not going to be considered in this Ruling. It is the duty of the Court in terms of section 83(2)(b) of the Arbitration Act, however, to assess the Arbitral Award and satisfy itself as to its conformity with the two ex-officio grounds prescribed under section 83(2)(b) of the Arbitration Act. I have, therefore, considered whether the subject 7 matter of the dispute is not capable of settlement by arbitration under any written laws in Tanzania or whether the recognition or enforcement of the present arbitral award would be contrary to any written laws or norms of Tanzania. My answer is in the negative. The dispute that the Applicant referred for Arbitration concerned a breach of Contract No. AE/092/2018/2019/MBY/W/21 for the upgrading of Lupeta-Wimba-Izumbe 10.1KM road to Bitumen Standard. The Award made by the Arbitrators is with respect to the relative rights and obligations of the parties herein arising out of and in connection with their above agreement. I know no law in Tanzania that would make that subject matter of that dispute not capable of being settled by way of arbitration. The dispute was therefore arbitrable. The second test under section 83(2) (b) is whether the recognition or enforcement of the domestic Arbitral Award issued by Eng. Julius Mamiro, Sole Arbitrator, dated 21st June 2024 between the parties herein, would be contrary to any written laws or norms of Tanzania. The rule in section 83(2) (b) of the Act is a public policy exception. In CBS and others v. WAK Orient Power & Light Ltd, (Decision of 12 April 2001, No. 99-2996; published in YCA, Vol. 26 (2001), p. 1120.), the implications of the public 8 policy ground for refusing recognition or enforcement of an award was described thus: [T]he public policy exception is very narrow. The courts have held that the exception is only applicable when enforcement would violate the forum state’s most basic notions of morality and justice.” Looking at the Award at hand, I am satisfied that the recognition and enforcement of the Final arbitral award in this matter, would not offend any of the most basic notions of morality and justice in Tanzania. The learned Counsel representing the Respondent, either, did not raise any such concerns. The Court also finds no violation of the laws or norms of Tanzania if the Final arbitral Award issued by Eng. Julius Mamiro, Sole Arbitrator, dated 21st June 2024 between the parties herein is recognized as a decree of this court as it was prayed by the Petitioner. All the orders in the award are valid legal remedies awardable in courts and tribunals of Tanzania. There is no law or norm obtaining in the country that would be incompatible with recognition and enforcement of such kind of an award. I, therefore, find that the unchallenged Final arbitral Award issued by Eng. Julius Mamiro, Sole 9 Arbitrator, dated 21st June 2024, between the parties herein passes the dual ex-officio tests under section 83(2)(b) of the Arbitration Act, Cap 15 of the Laws of Tanzania. Having found that there is no legal obstacle for the recognition and enforcement of the final arbitral Award issued by Eng. Julius Mamiro, Sole Arbitrator, dated 21st June 2024 between the parties in the present Petition, accordingly, I grant the application and I order that the same is hereby recognized for enforcement as a Decree of this Court. Having recognised the Award, it is now the duty of the Court to look for the dispotive orders of the Arbitral Award for the purposes of extracting a discernible decree of the Court therefrom. After going through the Final Arbitral Award by Eng. Julius Mamiro, Sole Arbitrator dated 21st June 2024, I find that the Petitioner herein who was the Claimant in the Arbitration, was claiming and praying for the following reliefs as can be seen at page 19 of the Award: “(a) A declaration that the termination of the contract for the upgrading of Lupeta-Wimba- Izumbe 10.1KM road to Bitumen Standard dated 17th March 2020 by the respondent is unfair, unprocedural, illegal, and it amounts to a breach of contract by the respondent; 10 (b) Payment of Special Damages to the tune of TZS 6,331,000,171.00 as specifically pleaded above; (c) Payment of General Damages to the tune of TZS 1,000,000,000.00/-; (d) Payment of interest at the court's rate of 12% from the date of the Award to the date of payment in full; (e) Costs of this Arbitration; (f) Any Other rellef (s) as this Honorable Tribunal may deem fit and just to grant.” On the other hand the Respondent herein who was the Respondent in the Arbitration proceedings prayed for the following reliefs as it can be seen at page 38 of the Final Award by Eng. Julius Mamiro, Sole Arbitrator, dated 21st June 2024: “(a) A declaration that the Respondent is not in breach of the contract; (b) A declaration that the Contract No. AE/092/2018/2019/MBY/W/21 for Upgrading of Lupeta-Wimba-Izumbe 10.1KM road to 11 Bitumen Standard was legally terminated by the Respondent for fundamental breach of the Contract by the Claimant; (c) Dismissal of the Claimant’s claims and prayers stated in her Referral with costs for want of merit; (d) Order that the Claimant to bear all costs of legal representabon and all other costs incurred by the Respondent in relation to these arbitration proceedings; and (e) Order such other reliefs as the Tribunal deems just and appropriate to grant in favour of the Respondent. At page 63 of the Award, the Arbitrator after having reasoned his Award, made the following dispotive orders consituting the Final Arbitral Award: “After considering the pleadings and evidence presented, accordingly, I make and publish the Final Award as follows: A. I DECLARE that the Termination was Lawful; 12 B. That any consequences of the termination for the Claimant are the responsibility of the Claimant; C.That the parties should implement the requirecments of Clause 68.1 of the contract in order to wind up the matter: i.The Respondent to Issue a Clause 68.1 Certificate within 28 days of the date of the Award. ii. The Respondent to hand over Contractor’s Equipment listed in Exhibit C18 within 28 days of the date of the Award. D. The Parties are jolntly and sevemlly liable to pay the costs of the Arbitration TZS 20,250,000. Each Party to pay TZS 10,125,000. E. That each Party shall bear its own costs. F. That any and all rellef not specifically addressecl herein is denled.” As said earlier, the Petition is not resisted by the Respondent which means that all the reliefs granted by the Arbitrator stand as they are. In that 13 regard the court has extracted from the Final Award the following Orders which shall now constitute the Decree of this Court: (a) The Court does hereby make an order that the Final Arbitral Award dated 21st June 2024 by Eng. Julius Mamiro, Sole Arbitrator, in the Arbitration relating to and emanating from the Contract No. AE/092/2018/2019/MBY/W/21 for Upgrading of Lupeta-Wimba - Izumbe 10.1KM road to Bitumen Standard between the parties herein is hereby recognised as a decree of this Court. (b) The Court does hereby declare that the termination by the Respondent herein of Contract No. AE/092/2018/2019/MBY/W/21 for Upgrading of Lupeta-Wimba- Izumbe 10.1KM road to Bitumen Standard was Lawful; (c) The Court does hereby declare that the Petitioner is not entitled from the Respondent to any claims or reliefs relating to the termination by the Respondent of the Contract No. AE/092/2018/2019/MBY/W/21 for Upgrading of Lupeta-Wimba- Izumbe 10.1KM road to Bitumen Standard. 14 (d) The Court does hereby order the Respondent to issue to the Petitioner a Clause 68.1 Certificate within 28 days of the date of the Award, that is, from 21st June 2024. (e) The Court does hereby order the Respondent to immediately and unconditionally hand over to the Petitioner, the Petitioner’s Plants and Equipment listed in Exhibit C18 to the Arbitral Award dated 21st June 2024 by Eng. Julius Mamiro, Sole Arbitrator, within 28 days of the date of the Award, that is, from 21st June 2024. (f) The Court does hereby order that the costs of the Arbitration leading to the issuance of the Arbitral Award dated 21st June 2024 by Eng. Julius Mamiro, Sole Arbitrator, at the tune of TZS. 20,250,000/= shall be borne equally by both parties jointly and severally, that is, each party shall pay TZS. 10,125,000/= to the Arbitral Institution-the National Construction Council (NCC); but the amount is wholly recoverable from, and reimbusrable by, either party. (g) The Court does hereby order that each Party shall bear its own costs of the Arbitration leading to the Final Arbitral Award dated 21st June 2024 by Eng. Julius Mamiro, Sole Arbitrator. 15 (h) Since the Petition is not opposed by the other side, I make no order as to costs of this Petition. It is so ordered. A.H. GONZI JUDGE 14/11/2024 Ruling is delivered in Court this 14th day of November 2024 in the presence of Mr.Edward Chuwa and Ms. Anna Lugendo, Advocates for the Petitioner and Mr. Shabani Mdagano Principal State Attorney, Mr. Bakari Bakari, Principal State Attorney, Mr. Baraka Nyambita, Senior State Attorney, and Ms. Nkamba Mshuda, State Attorney, for the Respondent. A.H. GONZI JUDGE 14/11/2024 16 17