Tanzania
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes. The respondent is prohibited from dealing with the assets referred to in the freezing order (either within the jurisdiction or worldwide) until a specified time (for example, a further hearing, judgment or payment) or further order of the Court.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
Yes. The Court has power to order any other order which it deems fit to grant in relation to the freezing order.
3. Briefly what is the relevant legal test?
The applicant must demonstrate that:
(i) there is a prima facie case, namely that there is a serious question to be tried on the alleged facts and probability that the applicant will be entitled to the relief sought;
(ii) the Court’s interference is necessary to protect the applicant from irreparable harm before his legal rights are established; and
(iii) the application should be made on the balance of convenience; i.e. there will be greater hardship or mischief suffered by the applicant from withholding the interim order than will be suffered by the respondent in granting it.
The applicant has to demonstrate the above three criteria and existence of the property/assets to be frozen. The burden to prove existence of any asset for freezing orders is not on the applicant.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application to the Court, in particular setting out in an affidavit the reasons for the application and the basis on which the relevant test is met. An application can be made on or without notice to the respondent. Where it is made without notice, the applicant has a duty of full and frank disclosure and there will be a later return hearing at which the respondent can challenge the order assuming it is made.
5. Does the applicant have to provide any form of security or commit to compensation if its claim is ultimately unsuccessful and any freezing (or equivalent) order granted causes loss and damage to the respondent?
No.
6. Can it be sought against third parties?
Yes, a third party to the underlying proceedings or prospective proceedings may be made a party to a freezing order where there is good reason to suppose that its assets are in fact the assets of the defendant in the underlying litigation or will be available to the defendant to meet a judgment or arbitral award. Equally a third party which is not a party to the freezing order (for example, a financial institution holding the defendant’s assets, tender employer owing defendant’s monies) which is notified of it is still required to ensure that it does not knowingly assist the respondent in breaching its terms. Such orders are binding upon third parties being notified of the order. Notification can be by way of letter attaching the said freezing order.
7. What assets are covered by a freezing (or equivalent) order?
The following assets are covered by a freezing order: lands, houses or other buildings, goods, money, banknotes, cheque, bills of exchange, promissory notes, Government securities, bonds or other securities for money debts, shares in a corporation and all other saleable property, movable or immovable, belonging to the respondent, or over which, or the profits of which, he has a disposing power which he may exercise for his own benefit, whether the same be held in the name of the respondent or by another person in trust for him or on his behalf. These assets need to be within the jurisdiction.
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Yes.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
At any stage, including prior to commencing the claim (although the Court will expect the applicant to issue its claim promptly) or following judgment to assist with enforcement.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Yes. The order will generally provide that the respondent may deal with their assets:
(i) above a specified value;
(ii) in the ordinary and proper course of business in a way that the value of the asset frozen will not depreciate;
(iii) any other way the Court deems fit.
12. What happens after a freezing (or equivalent) order is granted?
The respondent will be served with a copy of the filed application for freezing order, which the respondent may challenge through counter affidavit. The applicant will typically notify third parties (such as banks) of the freezing order when they might hold the respondent’s assets. Assuming the original order was obtained without notice (as it often will have been), there will be a return hearing, whose date is stated on the face of the order, at which the respondent may challenge the order. At this point the original order will usually either be set aside, extended or replaced with a Court-sanctioned undertaking which has broadly the same effect as a freezing order until trial.
13. Who pays the costs of the application for a freezing (or equivalent) order?
Either the applicant or the respondent may be ordered to pay for the costs of obtaining the freezing order, which is usually decided at the final determination of the underlying litigation but normally the unsuccessful party is ordered to pay the costs of the application.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
(i) A third party is not prevented from exercising any rights of set-off arising prior to its notification of the freezing order.
(ii) Third parties can apply for objection proceedings or suit for indemnity if their interests are affected by the freezing order.
15. What are the consequences of breach of a freezing (or equivalent) order?
A respondent who disobeys a freezing order may be held in contempt of Court and may be imprisoned, fined or have their assets seized. A third party may only be in contempt of Court where they knowingly help or permit the respondent to breach the terms of the order.
16. Does a third party notified of (but not a party to) a freezing (or equivalent) order owe a duty of care to the applicant (meaning it can be liable to the applicant for non-compliance)?
Yes, a third party is required to comply with a freezing order.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes, in principle, although subject to the laws of the relevant jurisdiction. However, this can only be sought with the permission of the Court and enforcement itself will be a matter of local law.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
In general, no (except for freezing orders from those countries which have bilateral agreement with Tanzania on recognition and enforcement of foreign judgments, awards, decisions or orders under the Reciprocal Enforcement of Foreign judgments Acts R.E 2019).
Contacts
Josephine Mbuya Partner Abenry Advocates Dar es Salaam, Tanzania josephine.mbuya@abenry.co.tz www.abenry.com
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