Stay of Proceedings Pending Arbitration: Does It Mean Insolvencyproceedings

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  • Topic: Court, Civil procedure, Arbitration
  • Pages : 8 (2865 words )
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  • Published : December 13, 2012
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STAY OF PROCEEDINGS PENDING ARBITRATION: DOES IT APPLY TO INSOLVENCY PROCEEDINGS? By Bwire B. Kuboja
There are two main sources of law in Tanzania Mainland regulating stay of proceedings pending arbitration namely section 6 of the Arbitration Act and section 64 of the Civil Procedure Code Act read together with the Second Schedule to the Civil Procedure Code Act. Under section 6 of the Arbitration Act, a party to a submission against whom a proceeding connected to any matter agreed to be submitted is commenced, is entitled to apply for stay of proceedings pending arbitration at any time before filing a written statement of defense or taking any step in the proceedings. The application under section 6 of the Arbitration Act can be made by a party to a submission or his privy. Section 64 of the Civil Procedure Code Act on the other hand, provides that unless there is a provision to the contrary by the Arbitration Act or any other law in force, matters pertaining to references to arbitration shall be governed by the provision of the Second Schedule to the Civil Procedure Code Act. Clause 18 of the second schedule to the civil procedure Code Act contains almost similar provision with that of section 6 of the Arbitration Act save for the time of filing the application for stay of proceedings. While the former provision requires such application to be made at any time before the filing of a written statement of defense or taking any step in the proceedings, under the latter provision the same should be filed at earliest opportunity time and in all cases where issues are settled at or before such settlement.

It would appear to be the law, according to Clause 18 of the Second Schedule to the Civil Procedure Code Act, that provided the application is made at or before settlement of issues, an application for stay of proceedings can be made after the Defendant has taken a step in the proceedings, including filing a written statement of Defense. For, settlement of issue is a step which comes after the completion of the exchange of pleadings between the parties2. Be it as it may, stay of proceedings covered by the provision of the Civil Procedure Code Act is broader than that provided under the Arbitration Act.

1 A Managing partner to MJ DIAMOND ADVOCATES and an assistant lecturer in law Tumaini University Dar Es Salaam College.
2 Under Order 14 (1) of the Civil Procedure Code Act issues arise when a material proposition of facts or law is affirmed by one party and denied by the other.
The application for stay of proceedings under the Civil Procedure Code Act can be filed at any court where the proceedings are initiated. The Civil Procedure Code Act recognizes the High Court and subordinate courts with the exception of primary courts as courts to which its provisions apply3. It would follow that where proceedings are commenced in relation to any difference covered by an agreement to submission between the parties at any of the three courts, the court to which the proceedings are pending becomes competent to hear and determine the application for stay of proceedings. Conversely, court for the purpose of the stay of proceedings under Arbitration Act is the High Court of Tanzania. Section 3 of the Arbitration Act provides that the general provisions relating to arbitration by consent out of court contained in part II of the Act shall apply only to dispute which, if the matter submitted to arbitration formed the subject matter of a suit, the High Court only would be competent to try. It would follow therefore that where a contract contains a submission clause and a dispute covered in the clause arises between the parties, the person against whom a suit is instituted cannot be entitled to apply for stay of the proceedings unless the dispute is within the jurisdiction of the High Court4. If the commencement of the proceedings is at a subordinate court the application cannot be preferred. In such a situation, it is submitted, the...
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