State reviews investment treaties to avert arbitration risk
DAR ES SALAAM: THE government has embarked on a comprehensive review of its Bilateral Investment Treaties (BITs) in a strategic move to safeguard the country from potential legal and economic vulnerabilities in international arbitration.
“The goal is to identify clauses that have weaknesses and to engage in discussions with the respective countries so that, in the event of a dispute, Tanzania does not suffer any undue harm,” said the Assistant Director for Domestic Arbitration at the Office of the Solicitor General, David Kakwaya.
He said on Monday, during a stakeholders’ meeting in Dar es Salaam, that a dedicated government team has already been assembled to participate in ongoing international efforts to reform the global system of dispute resolution.
The seminar, organised by the Switzerland Tanzania Chamber of Commerce, focused on recent developments, opportunities and challenges related to arbitration and other Alternative Dispute Resolution (ADR) mechanisms in Tanzania.
“There is already a national strategy in place, coordinated by the Office of the Attorney General in collaboration with the Ministry of Foreign Affairs and other relevant ministries, to review Bilateral Investment Treaties to identify clauses that have weaknesses,” he said.
The initiative underscores the government’s commitment to fostering a more balanced and secure investment environment while upholding the country’s sovereignty in international arbitration cases.
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Additionally, the review process seeks to ensure that Tanzania’s international agreements align with current legal standards and national development priorities.
This comes at a time when many developing countries are reassessing their investment treaties to protect policy space and avoid costly arbitration cases.
“These reforms are being coordinated under the framework of the United Nations Commission on International Trade Law (UNCITRAL), with a focus on improving fairness, efficiency and transparency in how investment disputes are handled,” said Mr Kakwaya.
Dr Jacktone Koyugi, a lecturer at the University of Dar es Salaam’s School of Law, said reviewing BITs is important, noting that many of them tend to favour investors at the expense of host countries.
He said in cases of disputes, countries often lose because of inconsistencies between the provisions in the BITs and their national laws.
A Swiss international arbitration specialist at LALIVE, Bernd Ehle, said arbitration is a necessary tool for resolving disputes between Switzerland and Tanzania.
Mr Ehle, who is also a member of the Switzerland Tanzania Chamber of Commerce, said there is a need for capacity building, including training judges, businesspeople and lawyers to effectively conduct arbitration proceedings.
