Stay or Injunction? The Proper Remedy for Challenging FCC Merger Approvals in Tanzania

Introduction

When the Fair Competition Commission (FCC) approves a merger or acquisition, the parties typically move quickly to complete the transaction. Purchase consideration is paid, taxes are settled, and any conditions attached to the approval are implemented.

A dissatisfied party seeking to challenge the approval before the Fair Competition Tribunal (FCT) will often want the transaction frozen pending determination of the appeal. The instinctive response is to seek an injunction. However, Tanzanian competition law draws a critical distinction between an injunction and a stay.

That distinction is far from technical. It affects the Tribunal's jurisdiction, the applicable legal test, and whether the application will survive at all.

Key Takeaways

• The Fair Competition Act provides for a stay, not an injunction, pending an appeal against an FCC decision.

• A stay and an injunction are separate remedies and cannot be used interchangeably.

• Seeking the wrong remedy may result in dismissal of the application on jurisdictional grounds.

• Where an injunction is available, the applicant must establish:

  • a serious question to be tried;

  • irreparable harm; and

  • balance of convenience.

• Delay can be fatal, particularly where the transaction has already been implemented.

What Is the Difference Between a Stay and an Injunction?

A stay suspends the operation or implementation of a decision pending determination of an appeal.

An injunction, on the other hand, restrains a party from taking a particular action.

Although the two remedies may appear similar in practical effect, Tanzanian courts have consistently recognised them as distinct forms of relief serving different legal purposes.

Accordingly, an application for a stay cannot automatically be treated as an application for an injunction, and vice versa.

The Statutory Position Under the Fair Competition Act

The Fair Competition Tribunal exercises appellate jurisdiction over decisions of the FCC.

Under section 92 of the Fair Competition Act, 2023, as amended by the Fair Competition (Amendment) Act, 2024, an appeal does not automatically suspend implementation of the FCC's decision.

Instead, a party seeking interim protection must apply to the Tribunal for a stay pending appeal.

This is significant because Parliament has expressly identified the available interim remedy. The Tribunal's powers are therefore confined to granting a stay where the statutory requirements are met.

Why Seeking an Injunction Instead of a Stay Can Be Fatal

A common mistake in merger appeals is assuming that an injunction can be sought in place of a stay.

However, where the applicable statute only provides for a stay, the Tribunal may lack jurisdiction to grant an injunction altogether.

In such circumstances, the application may fail before the Tribunal ever considers:

• irreparable harm;

• balance of convenience; or

• the merits of the appeal.

The choice of remedy is therefore a threshold jurisdictional issue rather than a drafting preference.

A Merger Appeal Before the Fair Competition Tribunal

The importance of identifying the correct remedy was recently illustrated in a merger appeal before the Tribunal.

An aggrieved party appealed an FCC decision approving a transaction and sought interim relief pending determination of the appeal.

Rather than applying for a stay under section 92, the applicant sought a temporary injunction restraining implementation of the transaction.

The respondents raised a preliminary objection arguing that:

• the applicable legislation only contemplated a stay;

• the Tribunal lacked jurisdiction to grant an injunction;

• the transaction had already been implemented; and

• the application had been brought outside the prescribed limitation period.

The Tribunal upheld the objection and declined jurisdiction, disposing of the application without considering the substantive merits.

The decision serves as an important reminder that selecting the wrong remedy may be fatal regardless of the strength of the appeal itself.

When an Injunction Is Available: The Applicable Legal Test

Even where an injunction is legally available, obtaining one is not straightforward.

The courts have held that an applicant must satisfy three cumulative requirements:

1. Serious Question to Be Tried

The applicant must demonstrate that there is a genuine issue requiring adjudication and that the underlying proceedings are properly before the court or tribunal.

2. Irreparable Harm

The applicant must establish that, without the injunction, harm will occur that cannot adequately be remedied through damages.

3. Balance of Convenience

The court must be satisfied that the inconvenience suffered by the applicant if relief is denied outweighs the inconvenience suffered by the respondent if relief is granted.

Failure to satisfy any one of these requirements is sufficient to defeat the application.

Personal Harm Must Be Demonstrated

One recurring weakness in applications seeking to halt commercial transactions is the failure to demonstrate harm suffered by the applicant personally.

Applicants often rely on alleged harm to:

• a company;

• shareholders;

• competitors;

• consumers; or

• the public interest.

However, where a party applies in a personal capacity, the relevant injury must be personal to that applicant.

The courts have consistently held that injuries capable of monetary compensation are generally insufficient to justify injunctive relief.

Why Timing Matters in Merger Appeals

Timing is frequently decisive in applications seeking to suspend implementation of an FCC-approved transaction.

There are two principal reasons.

Statutory Limitation Periods

Applications for interim relief must be brought within the applicable statutory time limits.

Failure to do so may render the application time-barred.

Events May Overtake the Relief Sought

An injunction is intended to prevent future action, not reverse completed events.

Where:

• FCC approval has been acted upon;

• purchase consideration has been paid;

• taxes have been settled; and

• regulatory conditions have been satisfied,

there may be little practical utility in granting interim relief.

Courts are generally reluctant to dismantle an implemented transaction through an application designed merely to preserve the status quo.

Practical Checklist Before Seeking Interim Relief Against an FCC Merger Approval

Before filing an application, parties should consider whether:

✓ The Correct Remedy Has Been Identified

Apply for a stay where the statute provides for a stay.

✓ Capacity Has Been Properly Established

Ensure authority exists to litigate on behalf of any company involved.

✓ Supporting Affidavits Contain Facts

Affidavits should contain evidence rather than legal submissions or speculation.

✓ Personal Harm Can Be Demonstrated

The alleged injury must be real, personal, and irreparable.

✓ The Application Is Within Time

Verify all applicable limitation periods.

✓ The Transaction Remains Capable of Being Suspended

Assess whether implementation has already progressed too far.

Red Flags That May Defeat an Application

An application to halt an FCC-approved transaction is likely to face difficulties where:

• an injunction is sought instead of a stay;

• the affidavit consists largely of argument rather than evidence;

• the alleged harm belongs to third parties rather than the applicant;

• the application is filed outside the limitation period;

• consideration and taxes have already been paid; or

• FCC approval conditions have already been substantially implemented.

Conclusion

The distinction between a stay and an injunction is fundamental in Tanzanian merger appeals. Where Parliament has prescribed a stay as the available remedy pending appeal of an FCC decision, parties cannot assume that the Fair Competition Tribunal may simply substitute an injunction instead.

For businesses, investors, and practitioners involved in merger control proceedings, the lesson is straightforward: identify the correct remedy, establish personal and irreparable harm where required, and act before events overtake the relief sought. In merger appeals, procedural mistakes can be just as fatal as substantive ones.