AFRICA: ENFORCEMENT OF FOREIGN ARBITRAL AWARDS
On 18 January 2021, Tanzania’s new Arbitration Act, 2020 (Act) came into force, repealing the previous Arbitration Act [Cap 15 R.E 2002]. On 29 January 2021, the new Arbitration (Rules of Procedure) Regulations, 2021 (Regulations) similarly came into force, replacing the previous Arbitration Rules (G.N. No. 427 of 1957).
See our earlier newsflash here for a comprehensive analysis of the provisions of the new Act and Regulations. In this newsflash, we noted that the Act deals with the enforcement of domestic and foreign arbitral awards and provides that awards may be enforced and recognised by way of an application to court once certain conditions have been met.
The Act also provides that a court will not enforce an award in circumstances where:
- a party lacked capacity to enter into the arbitration agreement;
- a party was not properly represented or given notice of the appointment of the arbitrator or arbitral proceedings; or
- the making of the arbitral award was induced by bribery, fraud, corruption or undue influence.
The provisions of the Act as they relate to the enforcement of foreign arbitral awards align the Tanzanian position with international best practice and are in keeping with the applicable practices and procedures adopted by Kenya, South Africa, Uganda and Zambia. The Act is largely in line with the UNCITRAL Model Law on International Commercial Arbitration.
In this regard, foreign arbitral awards are generally recognised and enforced in all of these jurisdictions, although each jurisdiction requires that an application for the recognition and enforcement of the award be made to the relevant domestic court with jurisdiction.
In addition to this, these jurisdictions also provide for the standards by which domestic courts may refuse to enforce a foreign arbitral award. The approach is generally consistent across the board in that domestic courts will refuse to enforce foreign arbitral awards where they are in breach of public policy, although each jurisdiction has its own requirements as to what would constitute an award contrary to public policy. For example:
- in Kenya, an award being contrary to public policy may be demonstrated by the arbitral award being inconsistent with any laws of Kenya, immoral or illegal, or that it unjustly enriches a person in a manner inconsistent with Kenya’s socio-economic ethos;
- in South Africa, an award will be considered contrary to public policy where it violates some fundamental principle of justice or good morals, for example where the award is at odds with a statutory prohibition;
- in Uganda, a domestic court will refuse to enforce a foreign arbitral award where Ugandan law expressly prohibits the enforcement of awards by way of the attachment or sale of certain goods; and
- in Zambia, an award will be considered contrary to public policy where it goes beyond the interests of the parties involved to concern the general Zambian public.