Key Highlights:
- The application for recognition and enforcement of the arbitral awards arising from the Arbitration Act must be filed within sixty (60) days from the date of award as per Item 21 of the Law of Limitation Act [Cap 89 R.E. 2023] and not within six (6) months as prescribed under Item 18 thereof which applies only to the arbitral award governed by the CPC.
- Arbitration under the CPC and arbitration under the Arbitration Act are governed by separate legal regimes with distinct procedural rules.
- Foreign arbitral awards cannot simply be filed; they require formal recognition under Section 83 of the Arbitration Act involving a judicial process.
- Recognition and enforcement of the arbitral award under the Arbitration Act demand substantive judicial scrutiny, ensuring compliance with both procedural and substantive standards.
- INTRODUCTION
The enforcement of foreign arbitral awards under the Arbitration Act [Cap 15 R.E 2023] or “the Arbitration Act” has remained legally unsettled, especially when it comes to the applicable limitation of time for recognition and enforcement of arbitral awards. In many cases, parties to arbitral awards have found themselves caught in procedural traps in filing their applications for recognition after what they assumed to be a six-month limitation period, only to suffer dismissal for being time-barred.
On 7 June 2024, the High Court of Tanzania (Commercial Division) at Dar es Salaam or “the High Court” delivered its ruling in the case of Louis Dreyfus Suisse SA v. Kahama Oil Mills Ltd (Misc. Commercial Cause No. 67 of 2023. In this case, the High Court clarified and made distinction between the applications for recognition and enforcement of foreign arbitral awards filed under the Civil Procedure Code [Cap 33 R.E 2023] or “the CPC” and those filed under the Arbitration Act. The ruling decisively makes a clear distinction between the procedures under the Arbitration Act and those under the CPC arbitration framework.
- FACTUAL BACKGROUND
The Applicant, Louis Dreyfus Suisse SA, is a Swiss-based trading company engaged in the production and supply of commodities, including agricultural products. The Respondent is a Tanzanian company engaging in agro-processing activities. The duo executed a contract in which they incorporated an arbitration clause as a dispute resolution mechanism should a dispute arise in the course of discharging the contract. The arbitration clause submitted parties to arbitration under the International Cotton Association (ICA) Limited Tribunal, with the seat of arbitration in the United Kingdom.
The Respondent breached the contract. The dispute was then referred to arbitration in accordance with the arbitration clause contained in the contract. The arbitral tribunal rendered the award in favour of the Applicant. Following the Respondent’s failure to comply with the award, the Applicant commenced proceedings in the High Court (Commercial Division) of Tanzania for the recognition and enforcement of the foreign arbitral award under the Arbitration Act.
- DECISION AND REASON FOR THE DECISION
In analyzing the present case concerning the limitation period for filing or challenging arbitral awards, it becomes necessary to examine the legal framework under which the arbitration was conducted. The issue of time limitation can only be fully understood by considering the distinction between awards governed by the CPC and those governed by the Arbitration Act.
For clarity and precision, this discussion is divided into two parts, following the approach taken by the High Court: the first part focuses on arbitration made under the CPC, highlighting the scope, procedural rules, and the applicability of Item 18 of Part III of the Schedule to the Law of Limitation Act. The second part addresses arbitration under the Arbitration Act, examining its independent procedural framework and the relevant limitation period under Item 21 of the Law of Limitation Act. This segmentation allows for a clear understanding of how the court distinguished between the two regimes in determining the applicable limitation periods thereto.
A. Recognition and Enforcement of Arbitral Awards Made under the CPC
1. Item 18 of the Law of Limitation Act Applies Exclusively to Arbitration Awards Governed by the CPC
The High Court held that Item 18 of Part III of the Schedule to the Law of Limitation Act [Cap 89 R.E 2023] or “the LLA’, which prescribes a six (6)-month time limit, applies only to applications for recognition and enforcement of arbitral awards made under the CPC and not the arbitral awards emanating from the Arbitration Act. This interpretation stems from the fact that the entire schedule to the LLA, including Item 18 thereof, is made under section 3(1) of the LLA which governs proceedings (suits, appeals and applications) as defined by the CPC.
Item 18 of the Schedule to LLA refers specifically to applications for filing arbitral awards, either those arising from court-referred arbitration or from private arbitration without court intervention, under the CPC. The disjunctive wording (“or”) used under Item 18 creates two distinct limbs of the same procedural root. Therefore, Item 18 of the Schedule to the LLA cannot be extended to cover applications for recognition and enforcement of awards under the Arbitration Act, such as those for recognition and enforcement of awards, which are governed by a different procedural regime.
2. Item 18 of Part III of the Schedule to the LLA Applies Solely to Arbitration Awards Made under the CPC Arbitration Rules
The second reason supporting the exclusive application of Item 18 of Part III of the Schedule to the Law of Limitation Act for arbitration awards under the CPC lies in the nature of the awards it covers. Item 18 of the Schedule to the LLA specifically refers to two types of arbitral awards names: those awards made in a suit referred to arbitration by court order, and those awards made without court intervention. Both categories are expressly governed by the Arbitration Rules of Procedure contained in the Second Schedule to the CPC.
The Arbitration Rules contained in the CPC recognize awards made even without court intervention as “awards in a suit”, reinforcing their procedural link to the CPC framework. The CPC further provides three main scenarios in which the court may refer matters to arbitration: first, where parties to an existing court suit agree to arbitration before judgment; second, is with respect to court-annexed ADR where if all the parties ‘’agree’’, the court may make an order referring their dispute to arbitration; and third, where court-annexed alternative dispute resolution results in an order to arbitrate.
Although these three scenarios differ procedurally, some involve initiating arbitration after a suit is filed, while others involve court recognition of a pre-existing arbitration agreement, the resulting awards are treated uniformly as “awards in a suit” under the CPC. This confirms that the six-month limitation period under Item 18 of the schedule to the LLA is designated for arbitral awards made pursuant to the rules of the CPC, and it does not extend to awards made under the Arbitration Act, whose recognition and enforcement are governed by a different procedural legal regime.
3. Item 18 of the Schedule to the LLA is Exhausted by the Arbitration Categories under the CPC Arbitration Rules
This reason rests on the premise that both limbs of Item 18, referring to awards made either by order of the court or without the intervention of the court, are specifically and comprehensively addressed under the Arbitration Rules of Procedure in the Second Schedule to the CPC. These rules clearly classify arbitral awards into two categories namely: awards made pursuant to court order [Rules 3(1), 17(4) of the Arbitration Rules of Procedure and Order VIII Rule 35 of the CPC], and awards made without court intervention (Rules 20 and 21 of the Arbitration Rules of Procedure in the second schedule to the CPC). Since Item 18 in the Schedule to the LLA corresponds directly and exclusively to these procedural categories, there remains no scope for including awards made under the Arbitration Act. The entire framework of Item 18 in the schedule to the LLA is tied to the CPC-based arbitration system, leaving the newer Arbitration Act outside its ambit by design and context.
4. Distinct Legal Frameworks: Item 18 in the Schedule to the LLA Applies to the Arbitral Award Made under the CPC but not to the Arbitral Award Made under the Arbitration Act
Item 18 of Part III of the Schedule to the LLA was designated to apply within the procedural confinements of the CPC, particularly its arbitration provisions in the Second Schedule thereto. This regime caters to a simplified process in which an arbitral award is filed and pronounced as a judgment of the court without any recognition or enforcement stage. In such cases, the award ceases to exist independently and merges with the judgment.
By contrast, the Arbitration Act establishes a distinct, self-contained legal framework that governs both domestic and foreign arbitration. Awards made under the Arbitration Act are not simply filed, but are subject to a structured recognition and enforcement process governed by Section 83. This process entails judicial scrutiny based on internationally recognised grounds, many of which are not contemplated under the CPC arbitration model. As such, the six-month limitation period under Item 18 in the schedule to the LLA, which presupposes a CPC filing mechanism, is not applicable to the awards enforced under the Arbitration Act.
5. Filing versus Recognition and Enforcement of Arbitral Awards: Item 18 of LLA Cannot Apply to Foreign Awards Seeking Recognition Under Section 83 of the Arbitration Act
The nature of the application brought before the High Court is not a “filing” of an award in the CPC sense, but a formal application for recognition and enforcement under Section 83 of the Arbitration Act. This distinction is critical. Recognition and enforcement under the Arbitration Act require the Court to assess the award based on both procedural and substantive standards, including grounds that may be raised by the respondent or invoked by the Court suo motu.
Foreign arbitral awards, like the ICA award in this case, cannot be filed or registered through a simplified process. Instead, they must satisfy the enforcement thresholds prescribed by international obligations such as the New York Convention, which the Act incorporates. Since Item 18 in the schedule to the LLA assumes a domestic, non-contested filing process, it cannot logically and legally extend to recognition proceedings involving foreign arbitral awards. To do so would be to conflate two entirely different legal procedural regimes and undermine the very structure that the Arbitration Act seeks to establish.
6.Section 64 of the CPC Confirms that the Arbitration Act Operates Independently of the CPC Arbitration Rulest
Section 64 of the CPC expressly subordinates the arbitration proceedings under the Second Schedule of the CPC to the provisions of the Arbitration Act, but not vice versa. This statutory construction reinforces the legislative intent that arbitration under the CPC and arbitration under the Arbitration Act are governed by separate procedural legal frameworks.
The Arbitration Act does not incorporate or refer to the procedures under the Second Schedule to the CPC, nor does it provide for the filing of awards in the manner contemplated under Item 18 of Part III in the schedule to the LLA. Consequently, awards made under the Arbitration Act are not subject to the six-month limitation period under Item 18 of the LLA. Instead, in the absence of a specific limitation period under the Arbitration Act, the applicable provision is Item 21 of Part III of the Schedule to the LLA which prescribes a sixty (60) days’ time limit for applications where no other period is prescribed. In Louis Dreyfus Suisse SA,the High Court found that the Applicant filed her application for recognition after a lapse of more than five months contrary to Item 21 of Part III of the Schedule to the LLA, resulting in the dismissal of the application for being time-barred.
B. Arbitration under the Arbitration Act, Cap. 15 R.E. 2020
7. Section 17 of the Arbitration Act Subjects the Application of the Law of Limitation Act to All Arbitration-Related Proceedings
Section 17(1) of the Arbitration Act clearly states that the LLA applies to arbitral proceedings in the same manner as it does to other legal proceedings. Although the phrase “arbitral proceedings” is primarily defined with reference to matters taking place before the arbitral tribunal, a purposive reading of the statute supports the inclusion of post-award court proceedings, such as recognition and enforcement, as being subject to the same limitation framework.
The Arbitration Act itself does not prescribe limitation periods for any proceedings, whether they occur before the arbitration tribunal or in court. Therefore, by design, the Arbitration Act relies exclusively on the provisions of the LLA to govern time limitations, unless otherwise stated. In case where no specific limitation period is provided, as is the case with applications for the recognition and enforcement of arbitral awards, Item 21 of Part III of the Schedule to the LLA becomes applicable by default, prescribing a sixty (60)-day limitation period. This reinforces the finding that the present application, filed after more than five months, is statutorily out of time.
- CONCLUSION
The High Court in Louis Dreyfus Suisse SA v. Kahama Oil Mills Ltd provides critical clarification on the distinction between arbitration under the CPC and arbitration under the Arbitration Act, particularly concerning limitation periods under the Law of Limitation Act (LLA). The decision emphasizes that the limitation period for filing or enforcing arbitral awards cannot be generalized across both regimes due to their procedural and substantive differences.
For CPC-governed arbitration, Item 18 of Part III of the Schedule to the LLA applies exclusively to awards under the CPC framework. The structured nature of CPC arbitration treats awards, whether arising from court-referred arbitration or private arbitration without court intervention, as “awards in a suit”, which justifies the six-month limitation period for filing arbitral award. Extending Item 18 to awards under the Arbitration Act would undermine legislative intent and create procedural contradictions, given that the CPC’s arbitration rules provide a narrow and specific framework for filing, recognition, and enforcement.
Regarding arbitration under the Arbitration Act, the Act establishes a distinct and comprehensive legal framework, particularly for the recognition and enforcement of domestic and foreign awards. Such awards require judicial scrutiny under Section 83 and may involve complex procedural and substantive considerations, including compliance with international conventions like the New York Convention. Therefore, the six-month limitation under Item 18 of the LLA for CPC awards does not apply. Instead, Item 21 of Part III of the Schedule to the LLA, which provides a sixty-day limitation period where no specific time is prescribed, is the appropriate reference for the arbitral awards made under the Arbitration Act.
The Court’s approach reinforces the mutual exclusivity of the two arbitration frameworks, ensuring clarity and certainty for practitioners, parties, and the judiciary. Separating CPC and Arbitration Act regimes prevents procedural overlap and avoids situations in which an arbitral award could be unfairly challenged or dismissed due to the misapplication of limitation rules.
In conclusion, the decision provides essential guidance for parties seeking recognition and enforcement of arbitral awards in Tanzania. Identifying the governing arbitration framework before initiating proceedings and complying with the correct limitation periods is crucial to avoid procedural pitfalls and the potential dismissal of applications as time-barred.
