Tanzania Business 101: What you need to know - Part D

This article is part of a series exploring key aspects of doing business in Tanzania. Part A covers the incorporation process and regulatory framework, Part B examines foreign exchange controls and export considerations, Part C discusses taxation, property ownership, and investment regulations, and Part D focuses on dispute resolution and choice of law.

59. Can a contract be subject to a foreign law and a foreign dispute settlement forum?

Yes. From a general perspective Tanzania law allows parties to choose jurisdiction and applicable law for their contract. There are important points to note regarding choice of foreign law and foreign courts and tribunals and you can read them here: https://www.clydeco.com/en/insights/2024/12/enforcement-of-foreign-judgments-in-tanzania. 

There are some disputes which subject to the dispute resolution procedures stipulated under the laws of Tanzania for example; tax disputes have to be filed at the Tax Board, then Tax Revenue Appeals Board and then the Court of Appeal of Tanzania. Hence there cannot be foreign dispute mechanisms for tax disputes. Also, land disputes must be filed at the Land Tribunals then final appeal at the Court of Appeal of Tanzania so such disputes cannot be filed through other forums local or foreign. 

60. How is the court/tribunal system in Tanzania?

There is the main court system which starts at the Primary Court, Magistrates Courts / Resident Magistrates Court, High Court District Registry and finally the Court of Appeal of Tanzania. The High Court has the Commercial Division, Land Division and Labour Division. There are tribunals in place which are focused on the subject matter of the dispute e.g. there are tribunals for land disputes, labour disputes, and other tribunals handling disputes relating to consumer claims under the FCC, environmental claims, tax disputes, public procurement disputes, complaints against entities in the extractive sectors etc. Also, mediation and arbitration is recognized and there are several arbitral tribunals but it is not mandatory for parties to select the local arbitral tribunals for their disputes. 

Whilst parties have the discretion to choose the law and forum for resolving their disputes, there are some disputes which must be submitted to the institutions or tribunals as stipulated under the laws of Tanzania. Hence, during the contractual stage, it is important to seek legal advice whether the parties can deviate from Tanzania law and choose dispute resolution forums outside of Tanzania. 

61. Can a nonresident institute legal proceedings against a resident person?

Yes. A nonresident can institute legal proceedings against a resident person provided that there is a valid claim substantiated by relevant documents, including contracts, proof of payment etc. Also, most likely the nonresident claimant will be required to pay securities for costs prior to the hearing of the point of dispute as filed by the nonresident claimant.