BUSINESS LAW

Commercial Disputes
Settlement Mechanism
 Objectives
 Understand what causes disputes
 Identify main methods of resolving
disputes
 Identify and describe main
alternative methods of dispute
settlement
 Describe judicial and non-judicial
bodies for settling commercial disputes
 What is a dispute
 Any conflict or disagreement
 A quarrel or argument or stepping
aside something
 A misunderstanding between two or
more parties
 It can be commercial or non-
commercial
 What Causes Disputes
• A break-down of communication
• Lack of appreciation and respect
• Change of economic and commercial circumstances
• Greedy/selfishness
• Differing legal concepts/change in law
• Technical problems/defective products
• Differing views of underlying facts
• Impact of third parties/force majeure
 Dispute Resolution
• Refers to processes that can be used to
resolve, a conflict, or a claim
• Dispute resolution may also be referred to as
alternative dispute resolution, appropriate
dispute resolution, or ADR for short.
• Dispute resolution processes are alternatives
to having a court decide the dispute in a trial
or other institutions decide the resolution of
the case or contract.
 Dispute resolution(2)
• Dispute resolution refers to processes that can
be used to resolve any type of dispute
including family, neighbourhood,
employment, business, housing, personal
injury, consumer, and environmental disputes.
• Dispute resolutions processes are used to
settle many of commercial disputes,
particularly related to contractual
relationships
 Methods of Dispute Resolution

 Conciliation
 Mediation
 Arbitration
 Litigation (lawsuits)
 Dispute Resolution by Courts
• Courts in Tanzania have a Constitutional and
Statutory duty to resolve disputes.
• This power is vested under article 4, 108, and
117 of the Constitution of the URT.
• Courts in Tanzania resolves disputes by way of
litigation and by way of mediation.
• Court based mediation is included in the Civil
Procedure Code Act.
 Dispute Resolution by Courts
• In Tanzania ADR was introduced in 1994
through Government Notice No. 422, which
amended the First Schedule to the Civil
Procedure Code Act (1966), and it is now an
inherent component of the country's legal
system
• If parties fail to resolve their dispute by ADR
they resort to ordinary court litigation
procedures.
 Judicial Bodies for Resolving Disputes in
Tanzania
• The Court of Appeal
• The High Court
• The Resident Magistrates Court
• The District Court
• The Primary Court
 Litigation
• Litigation is a process for handling disputes in
the court system.
• Litigation is a contested action, where
someone else, such as a judge may make the
final decisions for the parties unless the
parties settle before trial.
• Settlement can happen at any point during
the process
 Litigation
• During the litigation process, there may be a series of
hearings and temporary orders (e.g. temporary
custody and support), culminating in the final
orders.
• Final orders regarding the real issues in the case (e.g.
custody, support, division of assets) are usually
entered only after there has been a trial with
witnesses.
• The outcome of litigation is either judgment or a
ruling.
 Advantages of Litigation
• Public record
It is conducted through the courts and
therefore becomes part of the public record
• Cooperation
It forces parties to cooperate
• Precedent value
Court decision can be used as a precedent
• Appeals
 Litigations
• Litigations are conducted by the courts of law
• Courts of law are a creature of the
Constitution and the Statute.
• The authority of dispensing justice is in the
judiciary (Art.107A of the URT Constitution)
• The High court (HC) of Tanzania is established
under Art.108 )
• The Court of Appeal is est. under art.117
Alternative Dispute Resolutions(ADR)
• Refers to any means of settling disputes outside of
the courtroom.
• ADR typically includes early neutral evaluation,
negotiation, conciliation, mediation, and arbitration.
• ADR is a preferred methods of dispute settlement as
it avoids court queues, costs of litigation, time
delays, and exposure.
• ADRS processes can be managed by the courts or out
of courts.
 ADR
• Traditional dispute resolution is common
feature in almost all Africa societies and it is
the oldest method of dispute resolution
compared to other dispute resolution
methods
• Most African countries still hold onto
customary laws under which the application
of traditional dispute resolution mechanisms
is common.
 ADR
• It has been said that throughout Africa the
traditions have since time immemorial
emphasized harmony/togetherness
• Traditional conflict resolution entails the
mutual satisfaction of needs and does not rely
on the power relationships between the
parties
• However, methods involves coercive measures
to reach the conclusion
 Examples of traditional ADRs
• R v Palamba Fundikira. In this case a trial by ordeal
was conducted to discover who has by witch craft
caused the death of 11 children of the first appellant.
Four women were accused as causatives of the death
of the children and to prove their innocence they
were subjected to a traditional test o drinking a
traditional medicine called MWAVI. By itself “mwavi”
is not a poison but when taken with evil mind it turns
to poison. Upon taking two women died and other
two vomited [1947] 4 EACA 96
 Examples of traditional ADRs
• Traditional local leaders including male and
female elders played a pivotal role in conflict
management. Due to their the wide powers,
knowledge, wisdom and the respect they
were accorded in the society they could
resolve family conflicts and conflicts related to
natural resources
 Traditional ADRs
• In the case of Torgindi v Mutsweni, Torgindi
accused Mutseni as a causative of his
marriage breakdown and as a result a dispute
arose and the drumming arose.
• Each part was ordered to compose and sang a
song as loud as he could so that the whole
village could hear. Mutsweni was not a good
song composer but he hired a person to
compose for him
 Traditional ADRs
• The drumming started and went on for more
than 3weeks every day. The village elders then
opine that if the drumming continues it would
end up infighting so the parties were called to
prepare and sing their songs before the elders.
The elders here act as judges and at the end
they would decide who wins a case basing on
the song composed.
 Modern ADR Methods

• Conciliation
• Mediation
• Arbitration
 Conciliation(1)
• Is an alternative dispute resolution mechanism
• A process whereby the parties to a dispute use a
conciliator, who meets with the parties both
separately and together in an attempt to resolve
their differences.
• The Conciliator lowers tensions, improves
communications, interprets issues, encourages
parties to explore potential solutions and assisting
parties in finding a mutually acceptable outcome
 Conciliation (2)
• A conciliator assists each of the parties to
independently develop a list of all of their
objectives (the outcomes which they desire to
obtain from the conciliation).
• The conciliator then has each of the parties
separately prioritize their own list from most
to least important.
• He/She then goes back and forth between the parties and encourages
them to "give" on the objectives one at a time, starting with the least
important and working toward the most important for each party in turn
 Conciliation(3)
• The main difference between conciliation and
mediation proceedings is that, at some point
during the conciliation, the conciliator will be
asked by the parties to provide them with a
non-binding settlement proposal. A mediator,
by contrast, will in most cases and as a matter
of principle, refrain from making such a
proposal.
 Advantages of Conciliation
• Conciliation ensures party autonomy.
The parties can choose the timing, language,
place, structure and content of the
conciliation proceedings.
• Conciliation ensures the expertise of the
decision maker.
The parties are free to select their conciliator. A conciliator does not have
to have a specific professional background. The parties may base their
selection on criteria such as; experience, professional and / or personal
expertise, availability, language and cultural skills. A conciliator should be
impartial and independent.
 Advantages of Conciliation
• Conciliation is time and cost efficient.
Due to the informal and flexible nature of
conciliation proceedings, they can be
conducted in a time and cost-efficient manner.
• Conciliation ensures confidentiality.
The parties usually agree on confidentiality.
Thus, disputes can be settled discretely and
business secrets will remain confidential.
 Mediation
• A private process where a neutral third person
called a mediator helps the parties discuss and
try to resolve the dispute.
• The parties have the opportunity to describe
the issues, discuss their interests,
understandings, and feelings;
• Parties can provide each other with
information and explore ideas for the
resolution of the dispute.
 Mediation (2)
• Mediation process is voluntary
• The mediator does not have the power to
make a decision for the parties, but can help
the parties find a resolution that is mutually
acceptable
• The only people who can resolve the dispute
in mediation are the parties themselves.
• Mediation can be a joint session or private session.
 Mediation (3)
• Parties are free to terminate mediation at any
time after the first meeting.
• No decision can be imposed on the parties
involved, and they may or may not agree upon
a negotiated settlement.
• The confidentiality principle assures that any
options the parties discuss will not have
consequences beyond the mediation process.
 Mediation (4)
• Interest-based procedure means that the
criteria established to reach resolution does
not solely adhere to the law, instead it can
include considerations concerning financial,
business and personal interests as well.
 Advantages of mediation
• One of the main benefits of mediation is that the
parties can agree to take into account a broad range
of aspects, especially concerning commercial and
business interests.
• The process is flexible and can be tailored to the
individual needs of parties.
• However, mediation might not be the right instrument to
resolve a dispute, especially if for example; the parties are in
need of a precedent, or if one party seeks public vindication,
or if one or both parties require a neutral (legal) opinion.
 Arbitration
• A private process where disputing parties
agree that one or several individuals can make
a decision about the dispute after receiving
evidence and hearing arguments.
• Arbitration is different from mediation
because the neutral arbitrator has the
authority to make a decision about the
dispute
 Arbitration (2)
• The arbitration process is similar to a trial in
that the parties make opening statements and
present evidence to the arbitrator.
• Compared to traditional trials, arbitration can
usually be completed more quickly and is less
formal.
• After the hearing, the arbitrator issues an
award
 Arbitration (3)
• Some awards simply announce the decision (a
"bare bones" award), and others give reasons
(a "reasoned" award).
• The arbitration process may be either binding
or non-binding.
• When arbitration is binding, the decision is
final, can be enforced by a court, and can only
be appealed on very narrow grounds.
 Arbitration (4)
• When arbitration is non-binding, the
arbitrator's award is advisory and can be final
only if accepted by the parties.
• The arbitrator/umpire can forward the award
to the Registrar of the High Court
• In Tanzania arbitration is recognise by
Arbitration Act, Cap.15
 Powers of the Arbitrator
• The arbitrators or umpire acting under a submission
shall, unless a different intention is expressed
therein, have power–
• (a) to administer oaths to the parties and witnesses
appearing;
• (b) to state a special case for the opinion of the court
on any question of law involved; and (c) to correct in
an award any clerical mistake or error arising from
any accidental slip or omission. [s. 10]
 Advantages of arbitration
• Arbitration is private.
Arbitral proceedings including oral hearings,
these are not open to the public. Parties and
arbitrators are often bound by strict rules of
confidentiality. Thus, business secrets and
sensitive information can be protected from
the public, media and / or competitors.
 Advantages of arbitration
• Arbitrators are experts.
Parties may freely choose their arbitrators as
long as they are of an impartial and
independent nature. Arbitrators can be
selected from different nationalities and
professional fields. This guarantees the
professional and personal expertise of those
who decide the dispute.
 Advantages of arbitration
• Arbitral awards are enforceable.
Arbitral awards can be enforced in Tanzania
and abroad. In many countries arbitral awards
can be enforced more easily than state court
decisions. This is due to the 1958 New York
Convention on the Recognition and
Enforcement of Foreign Arbitral Awards.
 Advantages of arbitration
• Arbitration may save time and costs.
Tailor-made procedures and the absence of
appellate and / or review proceedings provide
the opportunity for arbitration proceedings to
be completed within a relatively short time.
Further costs can be saved by choosing a
suitable language and / or venue which in turn
avoids unnecessary translation and / or travel
costs.
 Advantages of litigation
• Evidence
In the courts, the rules of what constitutes evidence are much
stricter. If you have a strong case, this is a clear advantage, as
it leaves no room for you to be tripped up by speculation and
conjecture
• Costs
Litigation can be a more cost-effective option, especially if it is a small
dispute that could be resolved in court quickly

• Results-however long it takes ultimately there results

 ADR by Quasi-Judicial Bodies
• Out of court ADRs can be conducted by quasi-
judicial bodies.
• These bodies are such as-
(a) Insurance Ombudsman
(b) Fair Competition Tribunal (FCT)
(c) Tax Revenue Appeals Board (TRAB)
(d) Tax Revenue Appeals Tribunal (TRAT)
(e) Commission for Mediation and Arbitration(CMA)
 Insurance Ombudsman
• It was established in 2013 by Insurance
Ombudsman Regulations, 2013.
• It deals with disputes arising between
insurance consumers and insurance
registrants’ business in Tanzania.
• Insurance registrants means a person carrying
on insurance business other than a broker or
agent and an association of underwriters.
 Insurance Ombudsman
• Principles of Ombudsman
(a) It acts independently and objectively in resolving
complaints received and takes no instructions from
any person regarding the exercise of its powers
(b) It follows informal, fair and cost effective
procedures
(c) It keeps in balance the scale between complaints
and insurance registrants
(d) It accords due weight to considerations of equity.
 Insurance Ombudsman
• It maintains confidentiality in respect of every
complaint received
• Insurance registrants act with fairness and
with due regard to both the letter and the
spirit of the contract between the parties and
render an efficient service to those with
whom they contract
 Insurance Ombudsman
• Ombudsman is the head of the Ombudsman
service
• The functions of the ombudsman is to conduct
investigations for determining viability of
complaints and to conduct mediation,
reconciliation, and arbitration.
• The ombudsman can advise the parties, or
determine the complaint and make principle
or ex-gratia award to the complainant.
 Insurance Ombudsman
• The Ombudsman can issue declaratory orders against
the insurer
• The ombudsman can also determine complaints
from policy holders and third parties.
• The ombudsman is assisted by Mediators in dispute
resolution.
• The ombudsman can receive complaints in writing ,
electronic or orally
 Complaints Outside the Jurisdiction of the
Ombudsman
• Complaints which are already pending in court
• Complaints which the complainant want to
institute court proceedings
• Complaints previously already determined by
the Ombudsman.
• Complaints which are of three years or more
since the accrual of the cause of action.
 Insurance Ombudsman
• Parties are required to appear personally
except where special circumstance compel a
representation.
• In the special circumstances the
representative shall be given a power of
attorney
• No advocates are permitted to represent
parties during hearing.
 Insurance ombudsman
• After hearing the parties the ombudsman can
make an award which shall be complied with
by the insurance registrant within 30 days
• A party aggrieved by the award of the
Ombudsman can make reference to the High
Court
 Fair Competition Tribunal
• Is a specialized and independent quasi-judicial body
that combines expertise in economics and business
with expertise in law whose function is to hear and
determine cases involving competition and
regulatory issues arising from orders and decisions of
the Fair Competition Commission (FCC) and
regulatory authorities namely Land Transport
Regulatory Authority (LATRA), Tanzania
Communications Regulatory Authority (TCRA),
Energy and Water Utilities Regulatory Authority
(EWURA) and Tanzania Civil Aviation Authority
(TCAA).
 FCT
• The Tribunal is an appellate body that hears
appeals from orders and decisions of the Fair
Competition Commission and regulatory
authorities.
• In other words, the Fair Competition Tribunal
is at the apex of competition and regulatory
framework
• FCT is established under S.83 of the Fair
Competition Act,2003
 Functions of the FCT
• The functions of the FCT is
(a) To hear and determine appeals specified
under part XI of the Act
(b) To issues warrants
(c) To carry functions conferred on it by other
laws
(d) To exercise others powers as conferred by the
Act
 FCT
• The Tribunal is guided by the rules of natural
justice
• The Tribunal may make an order prohibiting the
publication of any report or description of
proceedings or of any part of proceedings before it
(whether heard in public or in camera) but no such
order shall be made prohibiting the publication of
the names and descriptions of the parties to an
appeal or a decision of the Tribunal
 FCT
• A judgment or order of the Tribunal on any
matter before it shall is final.
• Judgments and orders of the Tribunal are
executed and enforced in the same manner as
judgments and orders of the High Court
 TAX REVENUE APPEALS BOARD

• The Tax Revenue Appeals Board is established

under S.4 of the Tax Appeals Revenue Act.
• The Board has sole original jurisdiction in all
proceedings of a civil nature in respect of
disputes arising from revenue laws
administered by the Tanzania Revenue
Authority.
 TRAB
• The Board has jurisdiction to entertain
appeals from any person who is aggrieved
with the refusal by the Commissioner General
to admit the notice of objection to assessment
of tax.
• It may also receive appeal from any person
who is aggrieved by the decision of the
Commissioner General-
 TRAB
(a) the calculation by the Commissioner-General of the
amount due for refund, drawback or repayment of
any tax, duty, levy or charge;
(b) a refusal by the Commissioner-General to make any
refund or repayment; or
(c) a determination by the Commissioner-General
under Section 24 of the Income Tax Act;
(d) the decision by the Commissioner-General to
register, or refusal to register, any trader for the
purpose of the Value Added Tax Act,
 TRAB
• It may also receive from any person who is aggrieved
by the final determination of the assessment of tax
by Commissioner General may appeal to the Board;
• An appeal lie in respect of –
(a) a determination made by the Commissioner General in accordance with
section 13(1)(a);
(b) a determination made by the Commissioner General in accordance with
section 13(5)(a); or
(c) a determination made by the Commissioner General in accordance with section
13(5)(b) to the extent that the determination is made in accordance with the
submission by the objector
 Tax Revenue Appeals Tribunal
• TRAT is established under section 8 of the Tax
Appeals Act.
• TRAT has sole jurisdiction in all appeals arising
from decision of the Board on disputes on
which original jurisdiction is conferred on the
Board
• TRAT has supervisor powers over TRAB in the
exercise of its powers under the Tax Appeals
Act
 Powers of TRAB and TRAT
(a) to take evidence on oath;
(b) to resolve any complaint or appeal by mediation,
conciliation or arbitration;
(c) to issue warrants of arrest for failure to comply with
summons;
(d) to order payment of costs in relation to any matter
referred to the Board or the Tribunal;
(e) to dismiss any matter before it;
(f) to adjourn the hearing of any proceedings before it.
 Powers of TRAB and TRAT
• In addition, the Board or the Tribunal shall have the power to
summon and hear any witness and receive evidence in the
manner and to the same extent as if it were a court exercising
civil jurisdiction in a civil case and the provisions of the Civil
Procedure Code, relating to summoning of witnesses, the
taking of testimony on oath, and noncompliance with a
witness summons shall apply in relation to an appeal before
the Board but the Tribunal may not admit any fresh evidence
save in the circumstance in which the High Court may admit
fresh evidence on a first appeal in a civil case
 Proceedings in the Tribunal
• Appeals are conducted in public but
sometimes can be conducted in camera.
• Parties may appear in person at a hearing or
be represented by any other person being an
advocate or any other person registered as tax
consultant, accountant or auditor and the
Commissioner-General may be represented by
any person duly authorized on that behalf.
 Proceedings in the Tribunal
• The Board or the Tribunal are not be bound by
the rules or practice as to evidence and may
seek to be informed in relation to any matter
in such manner as it thinks fit as may result in
the expeditious determination of an appeal.
• The Board or Tribunal, as the case may be,
may deliver its decisions at the end of a
hearing.
 Decisions of the Tribunal
• Any decree or order of the Board or the
Tribunal given in the exercise of its jurisdiction
under this Act shall be enforceable and
executed as if it were a decree or order issued
by a court of law
• Any person who is aggrieved by the decision
of the Tribunal may preferred an appeal to the
Court of Appeal.
 Commission for Mediation and
Arbitration
• Is established by section 12 of the Labour Institutions
Act
• It is independent in its functions
• The functions of the Commission are:
(a) To mediate labour dispute referred to it
(b) To determine any dispute referred to it by
arbitration if
(i) A labour requires the dispute to be determined by
arbitration
 The functions of the CMA
(ii) The parties to the dispute agree to it being
determined by arbitration
(iii) The Labour Court refers the dispute to the
Commission to be determined by arbitration
in terms of section 94(3)(a)(ii) of the
Employment and Labour Relations Act.
(c) Facilitate the establishment of a forum for
workers participation, if requested.
Powers of Mediators& Arbitrators
• Mediators and arbitrators have the following
powers
(a) summon any person for questioning or to
attend a mediation or arbitration hearing;
(b) summon any person who is believed to have
position or control of any book, document or object
relevant to the resolution of the dispute, to appear
before the mediator or arbitrator to be questioned
and to produce the book, document or object;
Powers of Mediators &Arbitrators
(c) administer an oath or accept an
affirmation from any person called to
give evidence; and
(d) question any person about any
matter relevant to the dispute.
 The Public Procurement Appeals
Authority (PPAA)
• It was established in 2004 under the former
Public Procurement Act No.3 of
2001(Repealed and replaced by the Public
Procurement Act No 21 of 2004) (Cap 410).
• Public Procurement Act No 7 of 2011 re
established the PPAA as an independent
Appeals Authority under Section 88.
 The Objectives of the PPAA
• The key objective of establishing the PPAA
are:
(i) to provide an independent avenue through
which aggrieved bidders could submit their
complaints where it was felt that they had
been unfairly treated when participating in
the public procurement process.
 Objectives of PPAA
(ii) to provide for a mechanism which could deal with
procurement complaints and appeals using
alternative dispute resolution mechanisms outside
the court system and allow speed resolution of
disputes so as not to delay the implementation of
government project or programs.
(iii) To allow for corrective action to be instituted where
it is determined that there were breaches committed
in the procurement process.
 Objectives of PPAA
• To provide supplemental oversight over the
use of Public Funds over and above the
tradition oversight mechanisms through
bidders complaints.
• Functions of PPAA
(a) To receive complaints and appeals in respect
of procurement processes or decisions made
by government or its institutions in relation to
public procurement.
 Functions of PPAA
(b) To review decisions made by Accounting
Officers in relation to procurement processes.
(b) To review decisions made by PPRA with
respect to Blacklisting of Tenderers.
(c) To order for a Corrective action where it is
found that there breach of Procurement
Procedures.
 Jurisdiction of PPAA
• An important thing to note is that-Appeals or
Complaints handled by the Appeals Authority
are only those which relate to the
procurement process prior to the award of the
Tender( Pre-award) and those that relate to
the Award of Tender.
• Appeals or Complaints relating to execution of
contracts are outside the mandate of PPAA.