Natural Resources Arbitration Tanzania: Cabinet-Approved Offshore Seats Under Cap. 449

For nine years, the rule on natural resources arbitration in Tanzania was blunt. Disputes over the extraction, exploitation, acquisition or use of natural wealth and resources had to be decided by bodies in the United Republic, under Tanzanian law. That rule sat in section 11 of the Natural Wealth and Resources (Permanent Sovereignty) Act, Cap. 449, passed in July 2017. Lenders and investors often saw it as the single largest obstacle to financing large mining and petroleum projects.

In 2026 Parliament opened a door. The Written Laws (Miscellaneous Amendments) (No. 2) Act, 2026 adds a new subsection (4) to section 11. If the Cabinet approves an agreement that contains a special arrangement on proceedings, jurisdiction or the seat of arbitration, section 11 does not prejudice that arrangement. The seat may be outside Tanzania. The Act appears on the Parliament of Tanzania website, listed on 27 October 2026, and LEX Africa reports a Gazette date of 2 October 2026.

This post explains the 2017 position, what changes, who gains and what stays the same. It covers Mainland Tanzania in detail and states plainly what we could not verify for Zanzibar.

What changed

The Natural Wealth and Resources (Permanent Sovereignty) Act, Cap. 449 is Act No. 5 of 2017. It was assented to on 5 July 2017. Section 11 carries the heading "Prohibition of proceedings in foreign courts" and has three subsections in the text we read on TanzLII.

• Section 11(1): permanent sovereignty over natural wealth and resources "shall not be a subject of proceedings in any foreign court or tribunal".
• Section 11(2): disputes arising from extraction, exploitation or acquisition and use of natural wealth and resources "shall be adjudicated by judicial bodies or other organs established in the United Republic and in accordance with laws of Tanzania".
• Section 11(3): those local bodies and the application of Tanzanian law "shall be acknowledged and incorporated in any arrangement or agreement".

The new section 11(4) does not repeal any of this. It creates an exception. African Mining Market published a commentary by Evarist Kameja of Bowmans that quotes the new subsection. In that quotation, it opens "Notwithstanding the provisions of this section". It then covers an agreement that "provides for a special arrangement relating to proceedings, seat of arbitration or jurisdiction" in disputes arising from extraction, exploitation or acquisition and use of natural wealth resources.

Where "such agreement has been approved by the Cabinet", the quoted text says "the application of the provisions of this section shall not prejudice the implementation of such agreement". The Legal and Human Rights Centre (LHRC) quoted the same wording from the Bill in its August 2026 submission to the Parliamentary committee. We could not open the gazetted Act itself, because the Parliament PDF host blocks automated readers. The exact wording is listed under Figures to confirm.

LEX Africa sums up the effect in two lines. The amendments "do not generally remove the restrictions under section 11". They also "do not prescribe the circumstances in which Cabinet approval will be granted". Clyde & Co reported that the Government's explanatory memorandum said the in-country rule "has not provided a conducive environment for investment".

What did the 2017 rule mean in practice?

Read with section 3, the 2017 rule reached far. Cap. 449 defines "natural wealth and resources" to include soil, subsoil, gas, water, minerals, petroleum, fauna, flora, genetic and aquatic resources, rivers, lakes and maritime space. An "arrangement or agreement" is any contract relating to extraction, exploitation or acquisition and use of those resources.

So the rule covered mining development agreements, production sharing agreements, offtake and processing contracts with a resource element, and many joint venture agreements. Each had to name a Tanzanian forum and Tanzanian law. ICC, LCIA or ICSID arbitration seated in London, Paris or Washington could not be agreed for these disputes.

The Arbitration Act, Cap. 15 R.E. 2020 later gave the local route more structure. Section 77 establishes the Tanzania Arbitration Centre. Section 5(1) applies the Act where the seat is in Mainland Tanzania. Section 78 deals with recognition and enforcement of awards. Parties could arbitrate in Dar es Salaam under international rules, but the seat stayed in Tanzania.

Clyde & Co, writing in November 2024 on mining framework agreements, observed that investors preferred a foreign seat while the Government favoured a Tanzanian seat with UNCITRAL rules. Tanzanian law remained the governing law.

Before and after: how does section 11 read now?

The governing law row deserves care. Section 11(2) requires disputes to be decided "in accordance with laws of Tanzania". The reported text of section 11(4) mentions proceedings, seat and jurisdiction. Whether a Cabinet-approved agreement may also choose English or another foreign law is not clear from the summaries. Assume Tanzanian law governs until an advocate confirms otherwise from the gazetted text.

Who is affected

The amendment matters to anyone who signs, finances or lends against an agreement on natural wealth and resources. The main groups are these.

• Large-scale mining companies. Holders of special mining licences and investors negotiating framework agreements with the Government. Clyde & Co and Afriwise both list framework and development agreements as the main targets.
• Oil and gas investors. Parties to production sharing agreements and host government agreements on the Mainland, including the LNG project and pipeline structures. Clyde & Co noted in February 2025 that Cap. 449 limited foreign proceedings in oil and gas matters.
• STAMICO joint venture partners. A private partner in a joint venture with the State Mining Corporation can now ask for a foreign seat, subject to Cabinet approval. See our note on the STAMICO joint venture route.
• Project lenders and export credit agencies. Most international lenders require a neutral seat for disputes with the host state. The Cabinet route gives them something to negotiate for.
• Offtakers and processors. Where an offtake or toll-processing contract is an "arrangement or agreement" under Cap. 449, the same rules apply. Our guide to mineral offtake and agency agreements covers the commercial side.

Small-scale miners, primary licence holders and mineral dealers will feel little change. A Cabinet approval process is not practical for contracts of that size.

Who does what under the new route?

The Act, as reported, names only one approving body: the Cabinet. The other roles come from existing law and practice.

What does not change?

Section 11(4) is narrow. Other laws still shape a natural resources agreement, and the sources report no change to them on this point.

Cap. 450 and the unconscionable terms review

The Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Act, Cap. 450 is Act No. 6 of 2017. Section 6(2)(i) deems a term unconscionable if it subjects "the State to the jurisdiction of foreign laws and fora". Section 5 requires the Government to report each agreement to the National Assembly within six sitting days of the next sitting.

If the Assembly finds unconscionable terms, it may resolve that the Government re-negotiate. If the investor refuses or talks fail, the terms are treated as expunged under section 7. None of the sources reports that the No. 2 Act amended Cap. 450. So a Cabinet-approved foreign seat clause may still be open to challenge as unconscionable. This is the single largest open question for lenders.

The Arbitration Act and the Tanzania Arbitration Centre

Cap. 15 still governs any arbitration seated in Mainland Tanzania. Parties without Cabinet approval keep using the Tanzania Arbitration Centre or a local seat under international rules. Even with a foreign seat, an award against assets in Tanzania will need recognition under section 78 of Cap. 15. Our post on arbitration or litigation for commercial contracts explains the local options.

Local content, ownership and fiscal terms

The Mining Act local content rules, the State's free carried interest, royalty, inspection fee and the tax regime are unaffected. A foreign seat changes where a dispute is heard. It does not change what the investor must do. See mining local content and ownership checks and mining tax in Tanzania.

The Cabinet approval step itself

The exception is not automatic. An arbitration clause naming London or Paris is ineffective against section 11 unless the agreement holding it has Cabinet approval. The Act sets no timeline, criteria or form for that approval, as LEX Africa reports. The Government keeps full discretion.

What else is in the No. 2 Act, 2026?

The Bill amended seven principal laws, according to the LHRC submission and Daily News. Attorney General Hamza Johari presented it in the Fourth Session of the 13th Parliament, which ended on 4 September 2026. The other changes, as reported, are these.

• Land Use Planning Act, Cap. 116. Clarifies the tenure of National Land Use Planning Commission members, adds funding sources and requires cooperation between planning authorities and the Commission. Clyde & Co flags possible effects on planning approvals and compensation for mining projects.
• Local Government (District Authorities) Act, Cap. 287 and Local Government (Urban Authorities) Act, Cap. 288. Align the terms of vice-chairpersons and deputy mayors with those of the principal leaders.
• Valuation and Valuers Registration Act, Cap. 138. Aims at transparency in valuation and requires professional work by registered or recognised persons. Clyde & Co describes it as largely administrative, with possible effects on land compensation.
• Wildlife Conservation Act, Cap. 283. Deletes "livestock" from sections 111 and 116, so livestock is no longer liable to confiscation or forfeiture after a conviction. The Attorney General linked this to the property right in Article 24 of the Constitution.
• National Security Council Act, Cap. 61. Listed among the amended laws. We found no reliable public summary of the change.

Any seizure of livestock under the old wording, or a pending prosecution, belongs with an advocate.

Worked example: a USD 120 million gold project with a lender requiring offshore arbitration

The figures are illustrative. A Tanzanian subsidiary of a foreign sponsor holds a special mining licence for a gold project with capital cost of USD 120 million. It must sign a framework agreement with the Government. A development finance lender will provide USD 80 million of senior debt. Its credit committee requires ICC arbitration seated in London for any dispute with the Government under the framework agreement and the direct agreement.

1. Month 1: the sponsor's advocate drafts the dispute clause, with a Tanzanian-law fallback if Cabinet approval is refused.
2. Months 1 to 3: the clause is negotiated with the Government team alongside the free carried interest, local content and fiscal terms.
3. Months 3 to 4: the agreed text goes for Attorney General vetting and the ministry prepares the Cabinet paper.
4. Months 4 to 6: Cabinet considers the agreement. The Act sets no deadline, so the lender's long-stop date should allow for delay.
5. Signing: the agreement is signed after approval, with the Cabinet decision recorded as a condition precedent to first drawdown.
6. After signing: the Government reports the agreement to the National Assembly under section 5 of Cap. 450, which keeps the unconscionable terms review open.

The fiscal picture does not move with the forum. Suppose the mine sells USD 80 million of gold a year. Royalty at 6% for gold (register F0624) is USD 4.8 million, or 4% if sold at a refinery centre or to the Bank of Tanzania. The inspection fee of 1% of gross value (register F0625) adds USD 0.8 million. Both are paid to the authority against its GePG control number. See our government fees guide.

Two lessons follow. Build the Cabinet step into the financing timetable as a named condition. Clyde & Co reports that a mining licence is not issued until the framework agreement is signed, so this step sits on the critical path to the mining licence itself. And ask the advocate whether the clause survives a Cap. 450 review, because that is where the lender's risk now sits.

Does the amendment apply to agreements signed before October 2026?

The reported text speaks of "an agreement" approved by the Cabinet. It does not say whether earlier agreements qualify, or whether Cabinet approval given years ago counts. The Bowmans commentary in African Mining Market treats agreements entered into before 2 October 2026 as an open question.

Many existing framework agreements were already approved at Cabinet level. If they named a Tanzanian seat to comply with section 11, nothing changes until the parties amend them. An amendment that moves the seat offshore would itself need Cabinet approval, on the reported wording. Holders of pre-2026 agreements should not assume an existing clause has become enforceable abroad.

What about Zanzibar?

Cap. 449 is a Union law. Section 2 says the Act applies "to Mainland Tanzania as well as Tanzania Zanzibar". It does so "without prejudice to the authority of the Revolutionary Government of Zanzibar over ownership and control of its own national wealth and resources". Cap. 450 has the same application clause.

Oil and gas in Zanzibar sits under Zanzibar's own law. The Chanzo reported in 2022 that Zanzibar amended its constitution in 2010 to remove oil and gas from Union matters, and passed the Zanzibar Oil and Gas (Upstream) Act, 2016. Its regulator and the dispute clauses it requires were not verified for this post.

Three points are unknown. We do not know whether "the Cabinet" in section 11(4) also covers agreements made by the Revolutionary Government of Zanzibar. We do not know whether Zanzibar will adopt a parallel rule. The Arbitration Act, Cap. 15 applies only to Mainland Tanzania under its section 2, so it will not govern an arbitration seated in Zanzibar. Investors in Zanzibar petroleum or minerals should take advice from an advocate who practises in Zanzibar.

What should investors and lenders watch for?

The Act gives a route, not a right. Four risks remain.

• Discretion. Approval criteria are not published. Expect the Government to weigh project size, State participation and the investor's record.
• Parliamentary review. Cap. 449 section 12 and Cap. 450 section 4 let the National Assembly review agreements. A foreign forum clause is on the deemed-unconscionable list in Cap. 450.
• Enforcement at home. A London award still needs recognition in Tanzania before enforcement against local assets. Sovereign immunity rules for State assets need separate advice.
• Treaty claims. Whether a contract clause interacts with a bilateral investment treaty claim is a specialist matter. Any treaty claim, or any notice of dispute, goes to an advocate with investment arbitration experience.

For buyers of mining assets, the forum clause in each target agreement is now a due diligence item. Our investment due diligence work flags it alongside the licence transfer points in our mining licence transfer guide.

What to do now

1. Map your agreements. List every contract that relates to extraction, exploitation or acquisition and use of natural resources, and note its forum and governing law clause.
2. Ask the lenders early. Find out whether your lenders require a foreign seat, and whether a Tanzanian seat at the Tanzania Arbitration Centre would satisfy them.
3. Brief an advocate. Instruct an advocate to read the gazetted Act and advise on the clause, the governing law point and the Cap. 450 risk before you table it.
4. Prepare the Cabinet case. Assemble the project data, the State's participation, the local content plan and the reasons for a neutral seat into one file for the sponsoring ministry.
5. Build the timetable. Make Cabinet approval a named condition precedent and give the long-stop date room for delay.
6. Review land and valuation steps. Check resettlement and compensation plans against the amended Land Use Planning Act and Valuation and Valuers Registration Act.
7. Record government charges separately. Keep royalty, inspection fee and filing fees in their own ledger, paid against GePG control numbers.

Key dates

The commencement date of the Act was not visible in any source we read. Confirm it from the gazetted text before relying on the new subsection.

How Zatra helps

Zatra's investment advisory team helps mining and energy investors map their agreements, prepare the project file for the sponsoring ministry and track approvals. We also coordinate licence filings and keep the fee schedule. Government charges such as royalty, inspection fee and filing fees are paid at the official rate to the authority against its GePG control number. They are kept separate from Zatra's professional fee.

Arbitration clauses, treaty claims, legal opinions, disputes and any seizure or prosecution go to an advocate. Zatra has an advocate on the team and works with specialist counsel for investment arbitration. Zatra prepares and files; it does not decide or guarantee any authority's outcome.

Sources and status

Accurate as at 14 November 2026.

• Natural Wealth and Resources (Permanent Sovereignty) Act, Cap. 449. TanzLII, version as at 14 July 2021. Accessed 14 Nov 2026.
• Natural Wealth and Resources (Permanent Sovereignty) Act, 2017 (Act No. 5 of 2017), as published. TanzLII, 7 July 2017. Accessed 14 Nov 2026.
• Acts list: Written Laws (Miscellaneous Amendments) (No. 2) Act, 2026. Parliament of Tanzania, 27 October 2026. Accessed 14 Nov 2026.
• Arbitration Act, Cap. 15 R.E. 2020. TanzLII, version as at 1 December 2023. Accessed 14 Nov 2026.
• Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Act, 2017. FAOLEX copy of the Act as published, 7 July 2017. Accessed 14 Nov 2026.
• New flexibility for natural resource disputes in Tanzania. LEX Africa (FB Attorneys), 16 October 2026. Accessed 14 Nov 2026.
• Cabinet approval allows non-Tanzanian jurisdiction in resource agreements. African Mining Market (Evarist Kameja, Bowmans), 14 October 2026. Accessed 14 Nov 2026.
• Tanzania: proposed amendments to the Natural Wealth and Resources (Permanent Sovereignty) Act. Clyde & Co, 21 September 2026. Accessed 14 Nov 2026.
• Submission on the Written Laws (Miscellaneous Amendments) (No. 2) Bill, 2026. Legal and Human Rights Centre, 12 August 2026. Accessed 14 Nov 2026.
• MPs scrap livestock confiscation penalty. Daily News, 3 September 2026. Accessed 14 Nov 2026.
• Committee commends AG, CPD for promptly fixing legal gaps. Daily News, 4 September 2026. Accessed 14 Nov 2026.
• How OCPD lays legal foundation for implementation of Dira 2050. Daily News, 19 September 2026. Accessed 14 Nov 2026.
• What does the Tanzania mining framework agreement entail? Clyde & Co, 19 November 2024. Accessed 14 Nov 2026.
• Dispute resolution mechanisms in upstream oil and gas contracts. Clyde & Co, 17 February 2025. Accessed 14 Nov 2026.
• Here is why Zanzibar is going solo on its oil and gas projects. The Chanzo, 17 August 2022. Accessed 14 Nov 2026.

Figures to confirm before you act

• The exact wording of new section 11(4) of Cap. 449, which we read only as quoted by Bowmans in African Mining Market and by LHRC from the Bill, not in the gazetted Act.
• The Act number (reported as Act No. 7 of 2026), the section numbers in the Act that amend Cap. 449 (reported as sections 18 and 19 of Part VI; the Bill used clause 16), and the Gazette date of 2 October 2026.
• The commencement date of the No. 2 Act, 2026.
• Whether a Cabinet-approved agreement may choose a foreign governing law, or only a foreign seat and forum.
• Whether Cap. 450 was amended by any 2026 law, and its current consolidated text.
• The content of the National Security Council Act amendment, and the exact Land Use Planning and Valuation changes.
• The Zanzibar petroleum law's dispute clause and regulator, and whether s.11(4) reaches agreements of the Revolutionary Government of Zanzibar.
• The royalty rate (F0624) and inspection fee (F0625) at the date of your sale, from the Mining Commission.

This article is general information based on official sources available at the date of publication. It is not legal, tax or financial advice. Laws and notices change. Verify with the issuing authority or consult Zatra before acting.