DB Shapriya Co Ltd versus Yara Tanzania Limited

DB Shapriya Co Ltd versus Yara Tanzania Limited; Misc Commercial Case No. 55 of 2016:  High Court of Tanzania (Commercial Division) at Dar es Salaam (Unreported).

• Arbitration

• Stay of proceedings – proceedings stayed for 30 days to enable parties to refer the matter to arbitration – No party had referred the matter to arbitration- whose duty to refer a matter to arbitration? (Between the plaintiff who instituted the suit or Defendant who raised an objection that the contract has arbitration clause)
• Stay of proceedings – Court stays proceedings and order parties to submit the matter to arbitration – parties fail to refer the matter to arbitration – what is the fate of stayed proceedings?.

Held:-

(i) Both parties to arbitration are under obligation to initiate Arbitration. Whereas stay of proceedings may be initiated by one of the parties; arbitration initiatives must be taken by parties to arbitration (Cited Civil Appeal No. 115 of 2005 between Tanzania Motor, Services Ltd and Another v. Mehar Singh – CAT Dodoma Registry).

(ii) When the Court orders stay of proceedings so that a dispute can be referred to arbitration and the parties fail to refer the matter to arbitration as per the court order, the order of stay of proceedings lapses and the proceedings resume.