4. Rational Dispute Resolution
4.1 Rule of Law
4.2 Enforcement of Contracts
4.3 Commercial Dispute Resolution

In-Country Assessment Information

4. Rational Dispute Resolution


Goal – An efficient institutional framework that balances the rights of the public, owners, lenders and borrowers in the event of a dispute or loan default


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4.1 Rule of Law


Core Question: Do all market participants abide by the rule of law and have confidence in the courts and the ability of police to control crime? No – Weak, the courts are no reliable recourse and court orders are usually ignored.



4.1.1   What is the confidence level of the strength and impartiality of the police, courts and contract enforcement? Weak – Percentile Ranking – 34.3 Trend  ↓ 

Source: Governance Matters 2011, World Bank,



4.1.2   Can members of the judiciary be held accountable for their actions? No– Score 44 out of 100 – Very Weak

 Source: Global Integrity Report 2007 –


Costs of Crime

4.1.3   What are the business costs of crime and violence? Heavy Costs – Ranking 120th out of 144 – Score 4.6 out of 7, Very Weak

Source: The Global Competitiveness Report 2013, World Economic Forum


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4.2 Enforcement of Contracts


Core Question:         Are systems in place for timely and efficient enforcement of contracts?
Commercial – No – Very Strong
Residential –   No – Weak


4.2.1 – Judicial Enforcement

Commercial – Very Strong – Ranking 36th out of 185 Trend ↓          What is the number of procedures involved in resolving a commercial dispute? 38          What is the time between the filing of a lawsuit and resolution in judicial enforcements? 462 days                   What is the cost of judicial enforcements as a percentage of debt value? 14.3%

Source: Doing Business 2013 –

Residential – Weak, complicated by the continuance of “customary mortgages” where disputes are decided by the Village Land Council.


Survey Questions

SQ 10  What is the time between notice of intent to foreclose and loan collection in judicial enforcements? Unknown, although the Mortgage Finance (Special Provisions) Act of 2008 strengthened banks ability to enforce collateral


SQ 11  What is the cost of judicial enforcements as a percentage of property value? Unknown


4.2.2 – Summary Proceedings

SQ 12  Summary proceedings are alternative dispute resolution processes where creditors can apply for a direct court order in property disputes. What is the time between notice of intent to foreclose and loan collection in summary proceedings if available to lenders? Not Available – Very Weak


SQ 13  What is the cost of summary proceeding if available to lenders as a percentage of property value? Not Available – Very Weak


4.2.3 – Power-of-Sale

SQ 14  Power-of-sale agreements give creditors to power to sell properties after notice to the borrower without court intervention. What is the time between notice of intent to sell and loan collection for power-of-sale agreements if available to lenders? Weak – provided for in the Land Act, but little used due to low volume of transactions


SQ 15  What is the cost of power-of-sale agreements if available to lenders as a percentage of property value? Weak

Source – Financing Homes 2008, World Bank and International Housing Finance Corporation


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4.3 Commercial Dispute Resoluiton


Core Question:         Can commercial disputes be resolved efficiently and fairly without exorbitant expense and delay? No – Weak, high costs of participation prevents most cases from reaching the commercial court.


Survey Questions

Commercial Courts

SQ 16  Do specialized commercial courts exist for the handling of property disputes and foreclosures? Yes – Weak, established in 1999, but handling only a fraction of cases.

Source: Judicial Reform and Commercial Justice: The Case of Tanzania’s Commercial Court;    High Court of Tanzania – Commercial Division


Alternative Dispute Resolution

SQ 17  Are alternative dispute resolution mechanisms in place including commercial arbitration, private mediation and community based processes? Yes – Weak, ADR is being incorporated into commercial courts in recognition of the history of customary law.


Commercial Treaties

SQ 18  What bilateral, regional and international commercial treaties exist concerning business between countries? Member of the Common Market for East and Southern Africa, – Weak, severely limited export capacity

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In-Country Assessment Information (as of 2010)

FQ 7.              To what extent do practitioners report contracts as enforceable?


The courts are no reliable recourse, and court orders are usually ignored. Case in point: Civil Case No. 82 in 2003. Mr. Saidia Tete had been stripped of his title by a phony occupant, known only to the ministry and the bank. The imposter mortgaged the plot’s title through the CRDB Bank — one of the giant financial institutions in Tanzania, and managed to secure an unspecified amount of money.


Seeking rights through the Land Tribunal Court was the second option for Tete. However, the defendant never appeared in court, and the judge ruled in favor of Tete. “The plot belongs to the applicant,” reads part of the ruling, which also required Kyaruzi to surrender the deed of title and pay Tete a token amount of TZS 2,000,000 (US$1,600) as compensation and damages from the nuisance caused. Kyaruzi cannot be located. “It is very tricky,” laments Tete. “Yes, I have won the case, but Kyaruzi seems to be a hoax. What shall I do?” The ministry is not helpful and the CRDB Bank is unapproachable.


Source: Transparency International





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