Boardrooms now scrutinize dispute clauses with urgency. Investors repeatedly ask: “If something goes wrong, where do I really stand?”
Over the past decade, I have worked on commercial disputes where contract values exceeded $300 million. In more than 70 percent of these cases, the dispute could have been avoided with proper legal structuring at the outset.
Boardrooms now scrutinize dispute clauses with urgency. Investors repeatedly ask: “If something goes wrong, where do I really stand?”
After advising on complex commercial disputes across multiple jurisdictions, I observe that in approximately 60 percent of cases, the problem is inadequate legal advice at the outset. Dispute clauses copied from unrelated jurisdictions.
Arbitration provisions contradicting governing law clauses. Contracts silent on enforcement. These are structural weaknesses that are entirely avoidable.
When it comes to dispute resolution mechanisms, the choice between Tanzanian courts and arbitration must be strategic, not ideological.
Tanzania’s Arbitration Act, 2020 significantly modernized the country’s arbitration framework, drawing inspiration from international best practices, including aspects of the UK Arbitration Act 1996.
While the Act strengthens party autonomy and limits court intervention, distinctions between domestic and foreign arbitral awards remain relevant in enforcement practice.
More importantly, Tanzania is signatory to the New York Convention — adopted by 172 countries representing nearly 90 percent of global GDP. Arbitral awards issued in Tanzania can be enforced in London, New York, Singapore, or Dubai.
On the other hand, Tanzanian courts play a critical role, particularly for domestic law disputes. Recent High Court decisions demonstrate judicial sophistication: in Catic International Engineering v. University of Dar es Salaam (2020), the court reinforced proper standards for enforcing awards.
Simultaneously, arbitration offers neutrality and international enforceability. International arbitration often proves more cost-efficient than complex multi-jurisdictional litigation over the full life cycle of a dispute, with studies and practice experience indicating overall cost savings of approximately 20–40 percent, primarily due to procedural consolidation, limited appeals, and streamlined enforcement.
The mistake is failing to assess which mechanism aligns with investment risk profiles.
And then comes Forum Shopping, which is often portrayed as opportunistic. In my experience, it is a symptom of earlier legal missteps. When dispute clauses are unclear, parties race to secure favorable jurisdiction.
Investors who plan properly do not shop for forums. Their contracts specify where disputes will be resolved and how outcomes will be enforced. Where clarity is missing, uncertainty carries quantifiable costs.
Litigation risk now directly affects deal valuation. Sophisticated investors assess enforceability risk alongside market opportunity. Where enforcement is uncertain, financing costs increase or disappear.
I have seen viable projects struggle for funding not because business cases failed, but because legal risk was poorly articulated. This manifests sharply in emerging markets where legal strategy is underestimated.
Tanzania’s Commercial Court demonstrates increasing sophistication. In Diamond Motors Limited v. STC Construction Limited (2024), the High Court clarified arbitration waiver principles. In Louis Dreyfus Suisse SA v. Kahama Oil Mills Limited (2024), the court addressed enforcement timing.
These decisions show thoughtful judicial engagement with modern arbitration. Combined with three operational arbitral institutions, investors have multiple viable pathways.
Truth be told, what separates successful cross-border investments from failed ones is quality of legal structuring from day one.
Troubled contracts show patterns: hybrid clauses combining litigation and arbitration without clarity, governing law provisions contradicting dispute mechanisms, enforcement strategies unspecified. These failures often cost more than disputes themselves.
The bottom line is that in 15 years advising on African and global transactions, the most successful investors know exactly how disputes will be managed, where they will be heard, and how decisions will be enforced.
Too many disputes attributed to “systemic failure” result from contracts never designed to withstand conflict. When investors claim unpredictability, examination often reveals inadequate structuring.
Dispute resolution strategy should be decided alongside capital structure and governance rights — not after relationships break down. By the time disputes arise, critical decisions have been made.
Amne Suedi is Founder and Managing Director of Shikana Investment and Advisory, International Business Lawyer and Honorary Consul of Switzerland in Zanzibar
