Commercial Law Index

This was an application for a revision in respect of execution proceedings and a garnishee order.

The respondent raised preliminary objections: that the court lacked jurisdiction to determine the revision; that the court has not been moved and that the application was bad for not being accompanied with the order sought to be revised.

The court dismissed the final objection since there is no legal requirement for the same.

The court determined that it had jurisdiction, by applying the rule that all revisions of a civil nature in a resident magistrate court shall lie to the high court. The court interpreted this provision to include execution proceedings from resident magistrate courts.

In determining the second objection, the court observed that the applicant had cited non-existent legislation by referring to the Magistrates’ Court Act as the Resident Magistrates Court Act. It applied the rule that when an applicant cites the wrong provision the matter becomes incompetent since the court is not properly moved, to hold that it had not been moved. The court also considered that the applicant wrongly cited s 79 of the Civil Procedure Code. In doing so, it appreciated the difference on revision that may be undertaken per s 79 of the Civil Procedure Code and per ss 43 and 44 of the Magistrates Court Act: s 79 referred to finalized cases while the rest refer to any civil proceedings.

Accordingly, the application was struck out with an order as to costs in favor of the respondent. 

The applicant applied to set aside an arbitration award made in 2015. It was argued that the arbitrator misconducted herself when she amended the award; when she awarded nominal charges to the second respondent; and gave no reasons for ordering costs against the applicant, who was successful at the arbitration.

An arbitration award may be set aside on the grounds of an error on the face of it when reasons given for the award are based upon a legal proposition that is erroneous. It was found that the arbitrator’s reasons for making the award were erroneous and contrary to the Civil Procedure Code when awarding costs against the winning party. No reasons were provided for apportioning the costs, and for heavily weighting the costs against the winning party.

A court may also set aside an award if it is bad on its face for involving an apparent error in fact or law, or it has not complied with the requirements of finality and certainty. The award was bad on its face as it granted costs based on an apparent error of law by apportioning greater costs to the winning party. It is trite law that the losing party should bear the costs of a matter to compensate the successful party for expenses incurred for having to vindicate their rights.

The court held that there was good cause to remit the part of the award on apportionment of costs for reconsideration by the arbitrator.

The applicant filed to the court an application for the execution of the decree by attachment and sale of the judgment debtor’s property.

The issue was whether an appeal can prevent the execution of an order.

The court noted that in any civil proceedings, where the notice of appeal has been lodged in accordance with rule 83, an appeal shall not operate as a stay of execution of the decree or order appealed from except so far as the high court or tribunal may order, nor shall execution of a decree be stayed by reason of an appeal having been preferred from the decree order but the court may upon good cause shown, order stay of execution of such decree or order. The court may, upon good cause shown order stay of execution of the decree or order. It is only where there is an order for order for stay of execution that a trial court is estopped from issuing an execution order.

The execution process has two stages. The first stage is the issuance of an executive order and the second stage is the enforcement of that order which is normally done in the registry or other designed officer in the registry.

The courts took into consideration the fact that there was no order or stay of execution and concluded that it could make an order for execution despite the pendency of an appeal suit.

Execution order was granted

The court considered an application for temporary injunction restraining the respondents from selling two seized motor vehicles. Furthermore, the court considered whether the right of seizure and sale can be exercised without the intervention of the court.

This case concerned an agreement for the sale and purchase of 10 motor vehicles. The applicant alleged that the agreement was oral, whereas the respondents alleged it was written. The applicant subsequently defaulted on the payment and the first respondent seized the vehicles and threatened to sell the vehicles on public auction.  

The court found that the agreement concluded between the parties was in fact a written agreement.

The court considered the provisions of S 124 – S 128 of the Law of Contract Act. The basis of these provisions found that the pawnee may retain goods pledged for payment of any debt and may bring a suit against the pawnor upon the debt and retain the goods pledged as collateral security or he may sell the thing pledged.

The court found that the applicant (pawnor) defaulted in payment and the first respondent (pawnee) had the option of bringing a suit against the pawnor and retaining the goods as security or sell the thing pledged by giving the pawnor reasonable notice. If the proceeds are less than the amount due, the pawnor is liable to pay the balance. If the proceeds are more, the pawnee shall pay the surplus to the pawnor.

A pawnee, in possession of the title and the property pledged is entitled to sell the property without intervention of the court. However, in absence of possession, he cannot take the law into his own hands without the court’s intervention.

The court found that there was no clause in the agreement empowering the first respondent to take possession and sell the vehicles, and thus he cannot exercise his right without the court’s assistance.

Application succeeds.

This case concerned an action for breach of contract, and an objection to jurisdiction. The dispute emanated from a loan advanced to the plaintiff by the defendant. The plaintiff deposited his share certificate as security for the loan. The plaintiff contended that the loan was fully repaid and the security discharged; notwithstanding this the defendant informed the Dar es Salaam stock exchange that the share certificates has not been discharged and that the defendant still held an interest in the share certificate. The plaintiff complained to the court that the defendant’s conduct was defamatory and had affected its operation.

The defendant raised an objection to the claim arguing that the court lacked jurisdiction to hear the matter. It based its argument on the grounds that the claim was based on an amount below 100 million shillings. The plaintiff on the other hand argued that the claim was based on US $2.5 million, an mount which falls within the jurisdiction of the court if converted into shillings.

In deciding the case, the court dismissed the defendant objection and ruled that it had jurisdiction to hear the matter.

The case concerned a dispute about how to commence litigation on behalf of companies. The court held that whether or not failure to seek and obtain the permission of a company to institute litigation or an application is no longer the law in Tanzania. It was held that the issue of jurisdiction will allow a court to investigate factors to determine if the company gave permission to institute court proceedings. However, the party alleging that the company did not give authority must prove their case. Only when there is sufficient evidence will the court investigate the issue of jurisdiction. In this case, the applicant failed to prove his case and the application was dismissed.

In this case, the appellant claimed that the trial magistrate erred in holding that the appellant had a contractual duty to inform the respondent of the garnishee order. This case illustrates the duty to inform with regards to garnishee orders that also applies to banks.

The court considered whether the trial magistrate erred in holding that the appellant was legally bound to inform the respondent on the existence of the garnishee order. The court held that a bank has the duty to inform a customer in good time of a garnishee order so that the customer may take legal steps if he so wishes. Thus, the court held that though a notice from the appellant had been made in good time the fact that it reached the respondent late amounted to a breach of the fiduciary duty between them.

The court also held that it is a principle of law that an issue not raised at trial will not be entertained on appeal. Thus, the appellant was not allowed to raise questions as to whether the garnishee order was satisfied nor whether it was set aside.

In considering general damages, the court held that the trial court was correct in awarding general damages. The court dismissed the appeal in its entirety.

The respondent raised preliminary points against the application on the grounds that a valid and appropriate affidavit did not support the application according to the Civil Procedure Code, Cap 33 of the Revised Edition 2002 order XLIII rule 1. Further, that the application was incompetent for being omnibus.

The court considered whether wrongfully mentioning a person in the chamber of summons which has been sworn by another in support of the application is a fatal ailment. Further, whether the application is omnibus because it contained two applications, namely, for extension of time, if successful a stay of execution.

The court held that wrongfully mentioning a person in the chamber of summons in support of an application is trivial to warrant striking out the whole application. Further taking the course will be conforming to the spirit of the Constitution art 107A (2) (e). The court also held that the vision of the judiciary is to administer justice effectively. Therefore, it would not be inappropriate for courts of law to encourage a multiplicity of proceedings. More so, an application comprising of two or more applications which are interrelated is allowable at law.

The court found that striking out the application will amount to wasting of resources because the applicant would possibly come back later with the replacement of names in the application.

The court accordingly allowed the applicant to substitute the names in the chamber summons, rectify the names by hand with an initial beside the handwriting alteration.

A court can dismiss a matter for want of prosecution where the person who initiated the court action does not take active steps to pursue the case in court such as not appearing in court. The court dealt with a case where the lawyer did not appear before court on the date for hearing. The case was thereafter dismissed for want of prosecution. This case was an application to set aside the order to dismiss the original court suit for want of prosecution.

To set aside an order that a court suit be set aside for want of prosecution, the applicant must give sufficient grounds that must balanced against the interests of justice. In this case, the lawyer for the applicant did not appear because he was unwell on the court hearing date. The court held that this constituted a sufficient reason to set aside the notice to dismiss the case. In the interests of justice and the compelling reasons, the application to set aside the notice to dismiss was granted.

Two distinct, but related cases are of relevance in showing the genesis of this application.

The first relates to the respondent seeking to enforce a contract of works. The second relates to the applicant’s claim to enforce an agreement to arbitrate (as per the contract agreement). In this application before the High Court, the applicant sought to have the former case stayed, pending the final determination of the latter.

The applicant claimed that he sought the order to stay the suit as there was an agreement to arbitrate; proceeding with the respondent’s claim would be nugatory. The respondent resisted this application on the basis of procedural correctness.

This court determined that the issue was to verify whether this court had jurisdiction to entertain an application for stay of the respondent’s case, in view of the notice of appeal that was instituted by the applicant.

It was held that this court lacks jurisdiction over the latter case; it is the Court of Appeal which holds jurisdiction. Therefore, the matter was dismissed in its entirety.

The main case was whether the issue before this court was directly and substantially in issue with a matter pending in the court below.

The respondent threatened the applicant to cease any operations and vacate a Lake Natron game controlled area it currently occupies (‘the hunting block’). The applicant filed this application, seeking this court to issue an interim order restraining the respondents from evicting them at the hunting block.

The respondent claimed that this court does not have the jurisdiction to entertain this matter as it was res sub judice, and thus should be dismissed. The reason lodged was that the issue in this matter was directly and substantially related to the pending appeal. The applicant argued against these claims and contended that in the pending appeal, he was challenging different issues in relation to this application.

This court applied s 8 of the Civil Procedure Code in determining that the facts and circumstances of this application where identical with the pending matter below, and as such res sub judice.

This application was stayed pending the outcome of the appeal in the court below. 

The case dealt with an opposition to the filing of an arbitration award on the grounds that it was not filed in the form of a petition; additionally the necessary documents and exhibits were not filed.

The court held that the appropriate provision of the the Arbitration Act, Cap 15 of 2002 does not prescribe the form or manner in which an arbitration award should be filed, but merely provides that it should be filed. Further it does not matter if the arbitration award is submitted to the court by post or any other means, as long as the award reaches the court for filing. The court emphasised that an award must be filed in a manner that is convenient to the parties.

The court thereby refused to grant the application opposing the filing of the arbitration award because the manner chosen was in line with the law.