What lessons from EADB’s legal drama in Dar?

The duty to proceed diligently requires an arbitrator to proceed with reasonable dispatch while taking account of all necessary factors for just determination of the dispute.

The duty to act impartially enjoins the arbitrator to act fairly to both parties and in the proceedings throughout the reference he must not favour one party more than another, or do anything for one party that he does not do or offer to do for the other.

He must observe the fundamental rules which govern judicial proceedings including upholding the parties’ right to be heard and giving each of them fair opportunity to rebut adverse evidence and materials.

Enter Phase Three. The Bank, aggrieved by the award in favour of Blueline, filed a petition seeking to set aside the award of the arbitrator dated August 31, 2005 and a declaration that arbitration proceedings had failed and consequently the dispute should be heard and determined by a court of law.

Stay of execution

Simultaneously with filing the petition, the Bank also filed an application for stay of execution of the arbitral award pending the final determination of the Bank’s petition.

Blueline, once again, raised technical objections against the competence of the said petition and application that were upheld by a judge of the High Court of Tanzania on June 29, 2006.

The Bank did not give up because soon after its petition and application were struck out, it filed a new petition to set aside the arbitrator’s award and for lifting of the garnishee order issued on November 15, 2006 for $68,546,653 to attach the Bank’s account at Standard Chartered Bank, International House branch, Dar es Salaam.

Whereas this application to set aside the garnishee order was filed under certificate of urgency in December 2006, it was heard in July 2008 and ruling was delivered on May 12, 2009.

Again the court upheld the technical objection on the reasoning that the application was based on “speculation in the sense that there was no guarantee that the said petition would be successful.” This is the ruling (Shangwa J) in respect of which the Bank’s appeal against it will be heard this Monday.

What was not mentioned in that ruling is that on December 17, 2007, the Bank had filed an application seeking an order of the court to extend limitation period for the institution of an application to set aside the arbitration award.

The said application was heard and dismissed by a ruling delivered on March 26, 2009.

This means that the Bank’s latter application was filed, argued and ruled upon during the 30 months it took the Court to rule upon the Bank’s application on the garnishee order.

The discerning reader should have noticed two things by now.

First, that almost every application filed by the Bank was struck out on the basis of preliminary objections — meaning that they were not heard and determined on merit.