Tanzania ratifies protocol to empower regional court to handle business and investment matters

Tanzania’s ratification of the protocol extending the Court’s jurisdiction is another step towards a functional and well-structured trade and investment regime within the East African Community   

Introduction

Article 27 of the Treaty for the establishment of the East African Community provides for the jurisdiction of the East African Court of Justice, as a regional court. Article 27(2) of the Treaty provides for the enactment of protocol to operationalize the extended jurisdiction of the court.

On February 20, 2015, the Protocol to Operationalise the Extended Jurisdiction of the East African Court of Justice was signed by the Heads of State of the Partner States. The Protocol seeks to extend the jurisdiction of the court to cover trade and investment matters arising out of the implementation of the EAC Customs Union, Common Market, and Monetary Union protocols.

Since then, the Protocol has been ratified by Kenya, Rwanda, and Uganda. By a letter to the EAC Secretariat, dated December 6, 2022, Tanzania communicated its ratification of the Protocol by an instrument of ratification dated November 27, 2022. Notably, reliable sources intimate Burundi is engaged in a process to ratify the Protocol. This would leave ratifications by South Sudan and the recently admitted Democratic Republic of the Congo.

Implications of the Tanzania ratification of the Protocol

It is a progressive step in the regional integration bloc that an additional EAC Partner State has ratified this Protocol. It is imperative that issues related to trade and investment in the region are prioritized and it is no surprise that this is reflected in the court’s Strategic Plan, 2018-2023.

Despite a robust legal regime on trade, the EAC still lacks a functional regulatory body on trade disputes. The EAC Committee on Trade Remedies, which is ideally the go-to body in addressing trade disputes, remains non-operational to-date. In the meantime, on a perennial basis, there is a spreading culture of trade wars in the region between the Partner States. This leaves not so many options, except resort to courts and, in this case, the regional court. The ratification of the Protocol on extended jurisdiction of the court by more Partner States is towards this goal.

The EAC Treaty, under Chapter 12, provides for investment and industrial development in Partner States. Despite this, no framework exists in the regional bloc that specifically speaks to matters of investments, resolution of related disputes, or minimum requirements of the same at the national level. This presents a situation where only recourse by the courts is to the Treaty itself or the Common Market Protocol since investments are largely regulated by bilateral investment treaties.

It ought to be noted that such jurisdiction extends to investments from Partner States alone. The extended jurisdiction of the court to such matters is well intended; however, this calls for the streamlining of a few factors, including the drafting of a regional investment law. It has the potential to grow investment within the region once adequate and operational laws and structures are in place.

Conclusion

The continuing ratification of the Protocol stands as a beacon of hope that soon all Partner States will have ratified the same and that trade and investment matters will have stronger legal and enforcement regimes in place. This will not only create an investment-conducive environment in the EAC but it should go a long way in better preparing the EAC for trade and negotiations at a higher regional level, that is, the AfCFTA. Notably, there is a need to put in place a comprehensive legal regime on investment policies within the EAC.

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Disclaimer

No information contained in this alert should be construed as legal advice from ALP East Africa or ALP Advocates or the individual authors, nor is it intended to be a substitute for legal counsel on any subject matter.

For additional information in relation to this alert, please contact the following:

– Henry Onoria
Head, Integration and Cross-Border Transactions Department
honoria@alp-ea.com

– Christine Byaruhanga
Associate, Integration and Cross-Border Transactions Department
cbyaruhanga@alp-ea.com