What lessons from EADB’s legal drama in Dar?

The reason for the striking out of the Bank’s application was that it had withdrawn an earlier application for extension of time without liberty to file a fresh application of a like nature.

If the first appeal — whose judgment will be delivered on notice — goes in favour of Blueline, then it would be free to attach the money and other property of the Bank irrespective of the outcome of the second appeal scheduled to be heard on Monday, March 8.

However, if the decision of the Court of Appeal goes in favour of the Bank, then it will get a chance to file an application for extension of time to challenge the merits of the arbitration award to Blueline.

The heap of court decisions containing the Bank’s efforts to challenge the merits of the arbitration award attest to the fact that whatever decision the highest court in Tanzania makes in the two appeals lodged by the Bank, this protracted legal dispute should give food for thought and cause for concern to policymakers, investors, the legal fraternity and the general public in the Community states.

Accordingly, as the dispute unfolds in the Tanzanian courts it will help to analyse the issues in dispute, challenges brought to fore and lessons, if any, that arise from the strikingly contrasting judicial fortunes of the Bank and Blueline.

There are three phases of the protracted dispute between the Bank and Blueline.

Phase One began on January 6, 1989 when Blueline applied for a loan facility from the Bank to expand its road transport business.

On March 7, 1990, the Bank and Blueline entered into a loan agreement to partially finance the purchase of various trucks, trailers and other equipment needed for a project for hauling petroleum products from Dar es Salaam to upcountry stations, Malawi, Zaire and other neighbouring states.

The court proceedings made no progress over the next five years, prompting the parties to compromise the suit as settled in order to pave the way for resolution of the dispute through arbitration.

The parties agreed in court that Hon Francis Nyalali (the former Chief Justice of Tanzania) be appointed sole arbitrator and that A.T.H. Mwakyusa be appointed as sole arbitrator in the event of Mr Nyalali’s refusal or inability to act.

Justice Nyalali, then an advocate, accepted the appointment and subsequently heard the dispute submitted by the parties for arbitration.

The Bank was the claimant while Blueline lodged a counter-claim. Justice Nyalali delivered his award on September 30, 2002 in which he dismissed Blueline’s counter-claim but made no determination of the Bank’s claim against Blueline.

This brought Phase One of the dispute to an inconclusive closure.

Phase Two commenced with Blueline’s petition for the setting aside of Justice Nyalali’s award in which it succeeded beyond its expectations because Justice Luanda, who heard the petition, not only set aside the award but also appointed a sole arbitrator despite the objections of the Bank.

Dissatisfied with the appointment of the sole arbitrator, the Bank tried to reverse it through an appeal to the Court of Appeal but its efforts hit the rocks on July 9, 2004 when its application for extension of time to appeal was dismissed by another judge..