THE ROLE OF TANZANIA’S CAPITAL MARKETS TRIBUNAL IN RESOLVING SECURITIES DISPUTES
Capital markets move at lightning speed but justice often does not. When a broker misuses client funds or a listed company manipulates its stock, waiting years for a conventional court ruling would paralyze the financial system. This is why capital markets tribunals exist: specialized bodies that speak the language of finance while delivering justice at market velocity. Their very existence represents an acknowledgment that money moves too fast for traditional legal systems to keep pace.
In Tanzania, this recognition has led to the creation of the Capital Markets Tribunal (CMT), an independent appellate body established under Section 136A of the Capital Markets and Securities Act (Cap. 79), as amended (the Act). The CMT stands as a pivotal institution, designed to resolve disputes arising from the capital markets, ensuring fairness and stability within this dynamic sector. The CMT’s existence is further bolstered by its collaboration with the CMSA and the Ministry of Finance, creating an integrated framework for upholding market integrity. By combining judicial authority with sector-specific expertise, the Tribunal is able to deliver justice at the pace demanded by modern finance.
- LEGAL FRAMEWORK AND STRUCTURE OF TANZANIA’S CMT
Tanzania’s Tribunal is explicitly statutory and endowed with significant powers. Its mandate spans the adjudication of all disputes arising from the Act, including but not limited to interpretive questions of market regulations, conflicts between the Capital Markets and Securities Authority (CMSA) and stock exchanges or intermediaries, licensing disputes, and challenges to securities listing refusals. The Tribunal serves as the primary appellate forum for parties aggrieved by CMSA decisions, requiring appellants to file a Notice of Intention to Appeal within seven days of the contested ruling, followed by a full appeal submission within thirty days. Notably, this appellate pathway excludes decisions reached through mutual consent, which are expressly non-appealable.
Chaired by a High Court judge and supported by four specialist members, the CMT exercises the full judicial powers of the High Court, including the authority to summon witnesses, administer oaths, and compel document production. Its evidentiary procedures are intentionally flexible, permitting written testimony and considering any relevant evidence, even if inadmissible in other judicial forums while retaining the discretion to award costs to prevailing parties. The CMT’s determinations are final on factual merits, with appeals to the Court of Appeal restricted strictly to points of law. This finality underscores the CMT’s role as the ultimate judicial forum for capital-markets cases.
- COMPARATIVE PERSPECTIVE: INSIGHTS FOR TANZANIA’S CAPITAL MARKETS TRIBUNAL (CMT)
The CMT while commendable in its design and statutory authority, has much to learn from global counterparts with similar structures. Drawing from Kenya, South Africa, and India, clear lessons emerge on how Tanzania can enhance the CMT’s effectiveness, fairness, and adaptability in a rapidly evolving financial ecosystem.
Kenya’s Capital Markets Tribunal offers a nearby mirror, with a well-structured appellate pathway under the Capital Markets Act. Like Tanzania’s model, Kenya’s CMT is composed of legal and financial experts, presided over by a seasoned advocate. However, Kenya’s framework stands out for its explicit allowance for further appeals first to the High Court, then the Court of Appeal. This multi-tier system not only strengthens checks and balances but also builds a rich body of jurisprudence on capital-markets regulation. While Tanzania’s “finality” approach at the CMT level promises faster resolution, it risks bypassing higher judicial scrutiny on complex regulatory issues. The Tanzanian CMT could consider incorporating a limited right of appeal on specific legal points to foster fairness without sacrificing efficiency.
South Africa’s Financial Services Tribunal (FST), operational since 2018, broadens the lens further. Established under the Financial Sector Regulation Act, the FST’s composition of retired judges and financial experts ensures independence and credibility. The South African model underscores the importance of member neutrality: Tribunal members cannot be active participants in the industry, safeguarding impartiality. A key takeaway for Tanzania is the potential complexity of consolidating multiple sectors under one tribunal, as South Africa did. While a single forum for financial disputes offers consistency, it demands diverse expertise and clear procedural rules to avoid conflicts of interest. Additionally, South Africa’s use of electronic filing and seamless integration with higher courts reduces delays, a model Tanzania should emulate, especially given the CMT’s mandate to keep pace with dynamic market conditions.
India’s Securities Appellate Tribunal (SAT) presents both a caution and an inspiration. As a centralized forum for securities, insurance, and pension disputes, SAT epitomizes efficiency and consistency. Its composition a presiding retired judge and two expert members, mirrors Tanzania’s approach. However, India’s SAT faces a crushing caseload, with over 1,100 pending appeals in 2024. The backlog stems from limited bench capacity and high demand, delaying resolutions for years. For Tanzania, this highlights the necessity of proactive capacity planning. If the local capital market continues to expand, the CMT must scale its membership and establish multiple panels to avoid bottlenecks. Formalizing strict deadlines, adopting electronic filing systems, and ensuring that CMT decisions are backed by clear, codified procedural rules will be vital to maintaining public confidence.
Comparatively, Tanzania’s CMT stands at a crossroads. It has the statutory framework and high-court powers akin to Kenya’s, the independence and neutrality ideals from South Africa, and the scale potential reflected in India’s SAT. Yet, to unlock its full potential, the Tanzanian CMT must incorporate best practices: streamlined appeal structures to balance speed and fairness; independent, multidisciplinary panels; robust case management systems; and forward-looking regulatory coordination. This evolution is critical not just for the Tribunal’s effectiveness but also for reinforcing investor confidence in Tanzania’s burgeoning capital market.
- LESSONS AND BEST PRACTICES FOR TANZANIA
To fully realize its role as a credible and efficient arbiter of capital markets disputes, the Tanzanian Capital Markets Tribunal (CMT) should embed best practices that align with global standards while remaining tailored to the local context. Drawing from lessons learned in Kenya, South Africa, and India, the following principles can strengthen the CMT’s operational integrity and effectiveness:
- Maintain Independence and Transparency: The credibility of any tribunal hinges on its perceived and actual impartiality. Like SFT’s model, Tanzania’s CMT should ensure that its members are free from conflicts of interest, such as active participation in the capital markets they regulate. Transparent appointment processes, including public vetting and selection criteria based on expertise and ethical standing, can bolster public trust. Fixed terms and restrictions on external engagements, as seen in Kenya’s framework, safeguard against regulatory capture and maintain a clear separation between adjudicators and market participants. Furthermore, the CMT’s leadership by senior judges is a promising precedent, affirming its commitment to independence.
- Ensure procedural efficiency: Timeliness is the bedrock of effective capital markets adjudication. Strict filing deadlines should be rigorously enforced to avoid delays. Tanzania’s ongoing efforts to introduce electronic filing and case management systems are commendable and should be prioritized to eliminate paperwork bottlenecks. Importantly, the Tribunal must anticipate potential surges in case volume, as seen in India’s SAT, by ensuring adequate staffing perhaps through multiple panels or additional members to avoid backlogs and maintain swift resolution.
- Educate and Engage Stakeholders: Judicial efficiency thrives when market participants understand their rights and the processes available to them. As highlighted by Justice Nangela’s emphasis on public awareness, the CMT should invest in regular outreach initiatives, including seminars, easily accessible guidelines, and publication of anonymized decisions to build stakeholder confidence. Collaborative efforts with regulators, such as the Capital Markets and Securities Authority (CMSA), and with the judiciary, can create a harmonized and predictable regulatory ecosystem.
- Leverage Comparative Review; Allowing higher appeals (if needed) can increase confidence. Tanzania’s finality clause reduces court interference, but the rule linking the CMT to the Court of Appeal (via electronic referral) provides a hybrid solution. Ensuring the Court of Appeal can review CMT decisions on point of law would add legal oversight without burdening ordinary courts with merits.
Conclusion
In summary, adopting these best practices rooted in independence, empowerment, efficiency, stakeholder engagement, and balanced oversight will transform Tanzania’s CMT into a resilient, trusted institution. By learning from both regional and international models, the CMT can set a new benchmark for specialized financial adjudication in East Africa. For example, having at least one judicial member per bench (as in India and South Africa) ensures legal rigor, while including market experts ensures economic context in decisions. Regular training (cross-border exchange of judges, as Tanzania is already pursuing with Burundi’s CMA) can share best practices. The result will be greater investor protection and market confidence, as envisioned by Tanzania’s policymakers