International Arbitration on Investment Disputes in Natural Wealth and Resources Sector in Tanzania

Abstract

This article analyses rules relating to international arbitration
in natural wealth and resources sector under the newly
enacted Arbitration Act of 2020 of Tanzania. The Act is
enacted to facilitate amicable settlement of disputes outside
the court system as well as enforceability of arbitration
agreements. In a broader framework, the Act responds to the
challenges faced by Tanzania in managing and addressing
many issues emerging in arbitration cases especially
investor-state arbitration. Such reforms are not uniquely
Tanzanian but form part of the larger emerging reforms in
investment regime in key strategic economic sectors in most
of the developing world. This is reflected within the ongoing
UN Commission on International Trade Law (UNCITRAL)
working group on reforming the investor-state dispute
settlement system.
Under the new law, all disputes involving natural resources
can only be arbitrated in Tanzania, as a seat of arbitration,
whether under the auspices of the bodies established in
Tanzania or otherwise. Likewise, all disputes arising from
extraction, exploitation or acquisition and use of natural
wealth and resources can only be adjudicated in accordance
with the laws of Tanzania. To this end, the Act complements
similar relevant provisions under the Natural Wealth and
Resources (Permanent Sovereignty) Act and the Natural
Wealth and the Resources Contracts (Review and ReNegotiation of Unconscionable Terms) Act of 2017. The
Arbitration Act 2020 is aimed at creating a viable regime which
will encourage alternative dispute resolution and establish a
conducive framework for the enforcement of arbitral award.
This paper analyses the Arbitration Act 2020 whether it
complies with the best international practices in arbitration
regime. It also argues that limiting seat of arbitration and the
governing law of international arbitrations on disputes in
natural wealth and resources sector are significant reforms to
the existing investments landscape in the sector in Tanzania.
They form a part of the larger picture of emerging reforms in
investment regime in key strategic economic sectors in most
of the developing world. As a capital importing state,
Tanzania, like other developing nations, seek to avoid the
perceived frustrations of international arbitrations to obtain a
fair deal on investment agreements on her natural resources
through an effective arbitration regime and foreign
investments. Indeed, these reforms are likely going to bring
back many Tanzanian cases from abroad to Tanzania as a
safe seat of arbitration.

Key words: International arbitration, seat of arbitration,
governing laws, natural wealth and resources
sector, Bilateral Investment Treaties (BITs).