Tanzania Court Of Appeal Confirms Parties Have A Right To Agree On A Dispute Resolution Forum

The Court of Appeal of Tanzania has recently issued a judgement as to the parties' rights and option to contractually agree on a specific forum for the adjudication of any dispute. The decision confirms that the parties to a contract are allowed to decide on a forum and choice of law for determining their contractual disputes. This update will explore the judgement and its impact.

The Court of Appeal of Tanzania (the Court) has recently issued a judgement as to the parties' rights and option to contractually agree on a specific forum for the adjudication of any dispute arising from the performance, interpretation and enforcement of a contract (the Judgment). The appeal is registered as Civil Appeal No. 98 of 2016 between Sunshine Furniture Co. Ltd (Appellant) v. Maersk (China) Shipping Co. Ltd (1st Respondent) and Nyota Tanzania Limited (2nd Respondent) (together the Respondents). The Court's Judgment was delivered on 23 January 2020 and below is a brief summary of the facts, along with the analysis of and reasons given by the Court for their decision.

Proceedings in the High Court of Tanzania

The Appellant filed a suit (Commercial Case No. 113 of 2015) in the High Court of Tanzania, Commercial Division (the High Court) against the Respondents. In the suit, the Appellant (who was the Plaintiff in the High Court) claimed for special and general damages arising from what the Appellant described as the Respondents' acts of negligence in handling the bill of lading in the shipment of the Appellant's cargo.

The Appellant sought US$84,830.10 in damages from the Respondents jointly and severally for the Respondents' alleged acts of negligence in handling the bill of lading.

The Respondents denied the Appellants claim. In addition to this denial, the Respondents raised a preliminary objection to the jurisdiction of the High Court, as the bill of lading under which the Appellant's cause of action arose specifically vested jurisdiction in the High Court of England and Wales in London.

The High Court sustained the objection after considering the contents of Clause 26 of the bill of lading on which the Respondents relied, and previous decisions of the High Court which involved interpreting similar provisions in bills of lading. The case was therefore dismissed as the High Court ruled it did not have jurisdiction to determine the dispute, due to the presence of the express choice of forum clause in the bill of lading.

The Appeal and arguments of the...