CIVIL APPEAL NO 444 OF 2021 VOLTALIA PROTUGAL S

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM f CORAM: NPIKA. 3.A.. GALEBA, 3.A., And, MG EYE KWA, J.A.1 CIVIL APPEAL NO. 444 OF 2021 VOLTALIA PROTUGAL S.A................................................................ APPELLANT VERSUS NEXTGEN SOLAWAZI LIMITED.................... ....................... RESPONDENT (Appeal from the Ruling and Order of the High Court of Tanzania, Commercial Division at Dar es Salaam) (Philip, 3.) dated the 26th day of May, 2021 in Miscellaneous Commercial Cause No. 7 of 2020 JUDGMENT OF THE COURT 30^ October & 13th November, 2024 NPIKA. J.A.: Voltalia Portugal S.A., the appellant, contests the ruling and order of the High Court of Tanzania, Commercial Division (Philip, 1) dated 26th May, 2021 in Miscellaneous Commercial Cause No. 7 of 2020. The High Court declined to register an arbitral award issued in favour of the appellant against the respondent, Nextgen Solawazi Limited, because of that decision. The appeal arises from the following context: The appellant, a corporation organised and existing under the laws of Portugal, engaged into an agreement with the respondent, a company incorporated under the laws of Tanzania, on 14th December, 2016. In accordance with that agreement, the appellant undertook to provide the respondent with a photovoltaic facility and a transmission line that would connect the facility to a 33 kV transmission line that was to be constructed by the Tanzania National Electric Company. During the implementation of the agreement, a dispute regarding the appellant's entitlement to payment in the amount of USD 5,060,818.34, EUR 220,545.67, plus interest of USD 619,658.10 and EUR 1,256.81 arose. The parties submitted the dispute to the International Court of Arbitration of the International Chamber of Commerce in London, United Kingdom, for arbitration to resolve it. Following the arbitral tribunal's decision in favour of the appellant, the Deputy Counsel of the ICC International Court of Arbitration forwarded the final award to the High Court for registration as a court decree. The High Court declined to register the award, as previously indicated. The court posited that the ICC International Court of Arbitration lacked jurisdiction over the matter because the arbitration clause (Clause 19.4) of the agreement had been revoked by Sehel, J. (as she then was) for being ambiguous in her ruling dated 13th December, 2018 in Nextgen Solawazi Limited v. Voltalia S.A. France, Miscellaneous Commercial Cause No. 1 of 2018. To elucidate the point, we have excerpted the pertinentsection of the ruling as follows: "[T]he effect o f the aforesaid order o f this court was to deprive the ICC International Court o f Arbitration the jurisdiction to determ ine the dispute between the parties as w eii as the powers o f the arbitrator to preside over the case since the order o f this court was made before the determ ination o f the dispute between the parties. [On this basis], the award is in conflict with the order o f the court. In my considered view, the decision o f the soie arbitrator on the jurisdictional issue cannot prevail over the order o f this court, which stands unchallenged." Ultimately, the court determined that the award did not satisfy the mandatory requirements for the enforceability and registration of foreign awards, as outlined in regulation 66 (3) and (4) (c) of the Arbitration (Rules of Procedure) Regulations, 2021, Government Notice No. 146 of 2021 ("the Regulations'7). The appeal is founded on six grounds of complaint. We begin with the first, fifth and sixth grounds, which Mr. Gerald Nangi, learned counsel for theappellant, canvassed conjointly, bearing in mind that the common thread in all of them is the criticism that the High Court decided the matter on points it raised on its own motion without affording the appellant an opportunity to be heard on them. To ensure clarity, we have reproduced the aforementioned grounds as follows: 1. That the tria l Judge erred in iaw and in fact by determ ining and ruiing on com petency o f the arbitrai tribunal and proceedings whose award was subject o f registration in M iscellaneous Commercial Cause No. 7 o f 2020 on its own motion without affording the appellant an opportunity to address it on the point. 5. That the tria l Judge erred in law and in fact by denying the appellant the right to be heard with regards to the competency and substantive jurisdiction o f the arbitrai tribunal, pendency o f C ivil Appeal No. 272 o f 2019 in the Court o f Appeal o f Tanzania between a third-party entity one VoltaiiaS.A. France and the respondent, and determ ination o f proper parties in M iscellaneous Com m ercial Cause No. 1 o f 2018, with the effect o f nullifying the arbitral proceedings on the court's own motion. 6. That the tria l Judge erred in iaw and in fact by determ ining the interpretation and the applicability o f the provisions o f the Arbitration Act, 2020 and the Arbitration (Rules o f Procedure) Regulations, 2021 without affording the appellant an opportunity to address the court on the issue. Mr. Nangi's primary argument was that the High Court erroneously determined the application based on the points it raised on its own motion during the composition of the ruling, without hearing the parties. This led to an unjust outcome because of its misunderstanding of the facts. Mr. Nangi elaborated that the court could not query the competency of the arbitral proceedings because the respondent did not submit a formal challenge to the arbitral award. Furthermore, he condemned the court for neglecting to hear the parties regarding the impact of the order of Sehel, J. (as she then was) in Nextgen Solawazi Limited v. Voltalia S.A. France, Miscellaneous Commercial Cause No. 1 of 2018, which revoked the arbitration clause as between the respondent and Volta lia S.A. France, a third-party. He was adamant that the arbitration clause between the parties to this matter was not affected by the order. He urged us to overturn the High Court's decision and the consequential order that denied the appellant's request for the registration of the arbitral award on this basis. The appeal was vigorously contested by Mr. Simon Lyimo, learned counsel for the respondent. He contended that the High Court provided the appellant with an opportunity to address the merits of the application, particularly the question of whether the arbitral tribunal had substantive jurisdiction to take cognisance of the dispute and resolve it. He argued that the appellant's counsel addressed the court on a variety of issues regarding the matter, and that he specifically requested that the court take judicial notice of its decisions in Nextgen Solawazi Limited v. Voltalia S.A. France, Miscellaneous Commercial Cause No. 1 of 2018 and Voltalia Portugal S.A. v. Nextgen Solawazi Limited, Miscellaneous Commercial Cause No. 57 of 2019. He cited pages 277 to 290 of the record of appeal to substantiate his contention. Finally, the learned counsel extoled the High Court's decision and approach to the matter, asserting that the court did not raise or determine any new issues without consulting the parties. We have examined the record of appeal from pages 287 through 290, which reveals the proceedings of 13th April, 2021, before the High Court. During this hearing, the learned trial Judge heard the parties on the merits of the appellant's motion for enforceability and registration of the arbitral award. It is evident from the record that Mr. Jovinson Kagirwa, the respondent's counsel at the time, refuted the enforceability and registrability of the arbitral award under regulation 66(3) of the Regulations on the basis that the arbitral tribunal lacked jurisdiction over the matter after Mr. Jeremiah Tarimo, the appellant's counsel at the time, had addressed the High Court on the substance of the application. Mr. Kagirwa argued that the arbitration clause between the appellant and the respondent was revoked, thereby denying the arbitral tribunal jurisdiction over the dispute, citing the ruling of Sehel, J. (as she then was) in Nextgen Solawazi Limited v. Voltalia S.A. France, Miscellaneous Commercial Cause No. 1 of 2018. It is also documented that Mr. Tarimo responded by asserting that his learned friend had no right to question the competence of the arbitral tribunal, as the respondent had not submitted any petition to contest the award. The learned counsel is recorded as having discounted the ruling of Sehel, J. (as she then was) in Nextgen Solawazi Limited v. Voltalia S.A. France, Miscellaneous Commercial Cause No. 1 of 2018, arguing that it did not have any impact on the arbitration clause between the appellant and the respondent. The complaint that the High Court resolved the matter on the issue of the arbitral tribunal's competence, which it raised suo motu during the composition of the contested ruling, lacks any merit considering the aforementioned factual context. We are content that both parties were given an opportunity to express their opinions on the matter. As a result, the first, fifth, and sixth grounds of appeal fail. We believe that it is both logical and expedient to resort to the third ground of appeal. It impeaches the High Court's decision in the following manner: 3. That the tria l Judge erred in iaw and in fact by avoiding or refusing to examine the proper parties in M iscellaneous Commercial Cause No. 1 o f 2018 as cited by the tria l Judge which revoked the arbitration clause between the respondent and Voitaiia S.A. France (a third-party entity). Submitting on the above issue, Mr. Nangi reiterated his previous argument that the arbitration clause between the parties to this matter was not affected by the ruling and order in Miscellaneous Commercial Cause No. 1 of 2018, as the appellant was not a party to that matter. Consequently, he implored us to overturn the High Court's determination that the arbitral tribunal lacked jurisdiction over the matter. Mr. Lyimo disagreed with his learned friend. He argued that the ruling and order in Miscellaneous Commercial Cause No. 1 of 2018 affected the appellant, as it revoked the arbitration clause in the agreement between it and the respondent, even though the appellant was not a party to the case. He further stated that the appellant should have challenged the revocation through revision. The learned counsel was unwavering in his belief that the ruling and order remained in force and that the trial Judge had the right to rely on them in ruling that the arbitral tribunal lacked the competence to take cognisance of the dispute, despite the fact that the aforementioned ruling and order are subject to Civil Appeal No. 272 of 2019, which is currently pending in this Court. In our opinion, the issue at hand is not particularly challenging. Even though the ruling in Miscellaneous Commercial Cause No. 1 of 2018 supposedly revoked the arbitration clause in the agreement between the appellant and the respondent, it was not binding upon the appellant given that it was not a party to the said proceedings, which the respondent instituted against Voltalia S.A. France, a third-party entity. Voltalia S.A. France is, in fact, a sister corporation to the appellant; however, it is a distinct legal entity with a separate existence. Certainly, the said ruling was a decision in personam , not in rem. For all its worth, that decision supposedly imposed a personal liability or obligation upon Voltalia S.A. France vis-a-vis the respondent. That the respondent and Voltalia S.A. France were no longer bound to submit to arbitration. It is pertinent to recall that, this Court cited the High Court's decision in Mariam Ndunguru v. Kamoga Bukoli & Others [2002] TLR 417 with approval in Masumbuko Kowolesya Mtabazi v. Dotto Salum Chande Mbega [2020] TZCA 1939. In that decision, the High Court described the judgment in question as a judgment in personam, or rather a judgment inter partes, as opposed to a judgment in rem, given that it was only issued against the defendants in that suit. In distinguishing a judgment in personam from a judgment in rem, the Court went on to quote with approval from Mariam Ndunguru {supra) the following: "So in this sense the judgm ent o f the court was a judgm ent in personam, against the defendants oniy, and n o tin rem. [...] The common law, to my understanding, recognizes both judgm ents in rem and judgm ents in personam. It a il depends on the nature o f the proceedings in which the particular type o f judgm ent is sought Thus a judgm ent in an ordinary action o f contract or tort w iii be a judgm ent in personam or, more accurately, a judgm ent inter partes; a judgm ent declaratory o f status would be a judgm ent in rem. A s seen above, the reliefs in the present case indicate that the su it was founded on trespass; which is tort. It was sought in it that the defendants be declared to have been trespassers on the su it land and therefore they should be evicted from there and be made to pay compensation for the trespass. The judgm ent in the suit was a judgm ent in personam, and not a judgm ent in rem ." The High Court's determination that the consequential revocation order denied the ICC International Court of Arbitration the authority to resolve the dispute between the appellant and the respondent is flawed and cannot be sustained, as the ruling in question was not binding on the appellant in relation to the respondent. Consequently, we uphold the third ground of appeal. We are confident that our decision regarding the third ground of complaint is dispositive of the appeal and therefore, there is no necessity to address the second and fourth grounds of appeal. In the upshot, we find merit in the appeal, which we hereby allow with costs. Accordingly, we quash the impugned ruling and set aside the consequential order of dismissal of the application for registration of the arbitral award. We order the original record to be remitted to the High Court for proper resolution of the application in accordance with the law. DATED at DAR ES SALAAM this 12th day of November, 2024. G. A. M. NDIKA JUSTICE OF APPEAL Z. N. GALEBA JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL The Judgment delivered this 13th day of November, 2024 in the presence of Mr. Faris Kabitina, learned counsel for the Respondent and in the absence^ the Appellant, is hereby certified as a true copy of the