20161017 TZCA Dar es Salaam

IN THE HIGH COURT OF TANZANIA. :,:•'{CO;MMERCIAL DIVISION)· . : ATDAR.ES SALAAM · - MISCELLANEOUS COMMERCIAL CAUSE NO. 11 OF 2013 · '< !N THE MATIER eF Tf'IE ARBITRATION ACT (CAP. 1s R.E. 2002J ~·

AND IN , · TH ii--MA · • TIER: ,,1 :.,.;,, i OF.ARBl'TRATION ,•'. ' .' • ---BETWEEN· NAUTILUS Lif\JlrfED ................. _....................... ,. .... DECREE HOLDER - :' , _._ AND 'RULING • MWAMBEGELE, J.: Nautilus Limited; the decree holder, is armed with 'a decree of this court dated . .· -t, !· 05.06.2014. That decree has not been executed. The decree holder..has filed: an application for execution seeking the assistance of this court in ·'executing the decree. The ·mode in which the assistance of the court is sought is th.at: "the Managing Director, AMETAN CONTRACTORS ·. LIMITED, Mr. JAMES.ERIC AIKEN to be summoned to show cause-why he should _not be committed to civil prison for failing to pay the decretal amount". 1 ti The application for execution was filed in this court on 03.09.2015. . - . - '. - -r ~=- The court summoned the said James Eric Aiken to show cause why he should ;· i ~i:- not be committed to civil prison for failing to satisfy the/ decree. After several !: defaults of appearance in person, Mr. James Eric! Aiken appeared on ' . • It t;,· 24.05.2016. His advocate; Mr._ Tairo, through whom he spoke, was also E .. -• ··•· ~ - ~-·-~- .• - • . . •....... · . ·- - ~§.- present. Ms. Libby Ringo, learned counsel appeared forthe decree ho:lder. ~ _ r~ . . .. . . . . . . . ; . I must state at the outset that this ruling ought to hav~. been pronounced on lf• -

~ 23.06.2016 but because I was out of the station for two consecutive months ~ t for a •special assignment which ended on 22.09,.201p, that could not be r. possible. P'"'"' I!~' . . : ,.. In showing why he should- not be committed to_ priso:n Mr.- Aiken, who, as !~ aforesaid, spoke through Mr. Taira, learned counsel ad~an~~d several reasons ;_ .•-··_ -wby he should not be taken to ~ civil prison. Ftrst, that !the decree is disputed . - ! i- .,_, -,_~.. E..:..· •. because the same is not against his company; Arnetan•contractors Company i:_ :· . !-- ·Limited but against Ame-Tan Contractors Limited or Ametan Contractors. He i, : argues that the names bear some resemblanc~ but they -are not the same. :· · Failure to _sue _the right person or use of the _ _ correct name of· the f · · defendant/respondent renders the proceedings incompetent, he argues. On : this proposition, several decisions have been cited: These are Dar es Salaam Green Acres Intern_ational School & another Vs the • i Registered Trustees of Parents Association of Tanzania, Civil Case No. i 16 of 2013 (HC unreported), Registered Trustees of Umoja wa Wazazi Tanzania Vs Re_gn,as Construction co. Ltd & anoth_er, Miscellaneous i Commercial Application No. zss· of 2014 (HC unreported),· National Oil Vs! Aloyce Hobokela, Misc. Labour Application No. 21~ of 2013 (HC • • unreported), Christina Mrin1i Vs Coca Cola Kwanza

Bottlers Ltd, Civil.- 2 Appeal No. 112 of 2008 (CAT unreported). and NBC.Vs Thomas K. Chacha, ~ ... ·...... Civil Application No; 3 of 2000. (CATtinreported) .. It is submitted that Ametan ~ ContractC?rs Cornpany Limited was n~ither·.a party. inthe :arbitral proceedings ii · ' nor the present execution proceedings. t ti... · -,,• , r, The second reason advai-1ced for resisting the application for execution is that i the arbitral award th@t ,r~sl31te~t into, th~ decree. sought to be. executed has~ . . E never been registered by this court. His argument ·is that under section 17 of~ . -~·.. \ ; - . if the Arbitration Act, Cap. 15 of the Revised Editipn, 2002 an award is E.' . . . . . : . . ;: enforceable after a specific order to have 1treglster¢d as· a decree is made. t , :> : '" He gives an example of Luxury Apattf!lents: Vs; Dr. Edwarg Ngwale, t~· :. ·,-·, Miscellaneous Commercial Cause No. 175 of 2014 (HC unreported) in which ii · , • • • . . .. . • • 1 • :_ ·. . .• •. . ; . ' ••• ' . .. ~ . , . ' ~; ~;- an order was given to the following effect: !~ - . ' .• .. ._,·:. : ..... . ,' ~ . :;. •.. "I accor:di:ligly herebWorder thaethe arbitral award<• · 0 forwarded· to this court be. and · :is hereby . regj:~tered as 1f itvvas a decree of this court". The records of this matter, he argues, do not show that the award was ever; registered. , ' , . f' 1 The third reason for

re.~isti11g-the.execution is thatthe Managing Director Mr. James Eric Aiken was not a party to the proceedings which led to the decree sought to be executed. He relies on J. H. Rayner {Mincing Lane) Vs Dept ;. ' •· .• • • • . 1"• of Trade and Industry [1989] 3 WLR 969 for the propositidn that members '·· of a company are not liable to pay the company's debts and Salomon Vs Sa/oma11 and Co. [1895 _: 99] All ER 33 for the stance. th~t an incorporated [ company is a distinct entity separate from its shareholders and directors. It is, subtnitted that there is no evidence that the veil of incorporation has been lifted to hold individual shareholders/directors personally liable. 3 It is thus submitted that the applic?tion to have Mr. .James Eric Aiken committed to civil prison for failing to pay. l,JSD 398,223 and Tshs. 25,139,432/04 is without merit and should be dismissed with costs. On the other hand, MS; 'Libby Ringo, learned counsel for 'the decree holder urges the court to disregard the submissions of the learr~ed counsel for the judgment debtor because they. are intended to obstruct justice .. ·She-argues• that all along the judgment debtor .. submitted to the . jurisdiction of the •. . arbitrator under the name of Ametan Contactors Limited and consequently a . decree issued. Whatvvas the basis ·of Mr. Ja~es EricAiken· appearing before . . the Arbitrator and giving evidence in

the matter if the matter did not concern him?, she. asked. T~1e learned counsel submitted that Mr. James Eric Aiken gave evidence in the Arbitration 'Proceedings as appearing at p. 5,8 of th_e proceedings and admitted· at pp 33·~~ 84 that-the wor~ done \flfas 70% and the· . . · : Contract reads. Ametan -Contractors Limited> .The counter-claim was .in the . very name and was signed by the · ver\t ·James Eric ·Aiken. The closing submissions, the list of document$ to be. relied upon, the Petition fi.led by the judgment debtor after the. -decree holder fil.ed th~ award in this court and the judgment debtor's application for extension of time to appeal against the . . decision of Nyangarika, J. all were in the name of Ametan Contractors Ltd. The learned counsel thus ·submits that the argument to the effect that the judgment debtor was :not a. party to:the: arbitration proceedings is but an afterthought. Ms. Ringo conceded that a company has a distinct personality from its . . shareholders and directors ·_but thaf there are people who had been entrusted . . . in running and conducting the activities for which_ the ~ompany was formed and Order XXI rule 30 (2) of the· CPC which states. that a decree may be 4 executed by detention o~·direct0rs as civil prisoners does not speak of liftin . .. . . .. . I t::ev~:a:::dcoz::::1°~~u:ns:::::ti:~:: t:e c:uu: :~:::s~:h:p:~c::~~n b·I

'·•·' 0 allowing the detention .of Jan,es Eric Aiken. as a civil prisoner and that thJ . ; _.. . . . . I decree holder undertakes, to .pay-his -subsistence allowance as required by the .... · provisions of- Order XXI rule 38 of the CPC. She add.ed that other: modes . . ot I _executi?n have not-worked as th:e judgmefit debtor has not filed its accO:unt~ _ with BRELA and that with the fiduciary relationship between the judgmenl ·., debtor and the its banker,. ~he latter·could not ~ivulge any useful information\:_ · She stated that the. mode ofassistaQce ·sought for is a last resort. • Conceding that the n_?rn'.. Ar?etc.:in .C?ntracto~s Limit~d has been ~Ted '.n _thl? >.)'. rubber stamp, counterclarrn,. 11st of docum.entsi et cetera, Mr. Ta1ro, reJoined-:, . ·<" that that does not justify the error made ..· He stressed that the court· should-=- :· : l;)e guided by the fv/rirnicas_e; : .. ·: ,. . ._ . ' ' - . ' ' ' . . [.::-_ He reiterated that the aw~nd-was not registered as a decree of this court andi · therefore it remained an award. I . .. He added that despite the fact that it is true that companies are managed b directors, there .must be followed a specific procedure to proceed to execute a·_ decree against a perso~aHty by lifting the veil of incorporcltion. On the argum~nt on Order XXI rule 30 (2) of the C.~C, the learned counsel rejoined that the provi_sion is not

applicable because the matter here is not for specific performance. Neither is it one for injunction. I have heard the arguments by both learned counsel. There seem to be three issues which this ruling must answer. The first is whether the 5 I defendant is a stranger to thearbitration,proceedings .. The second is whether~ the· arbitral award that resulted ·i11to·the. decree sO:ught. to be executed has [~. never been registered· by -this court .and th~ third :is wh~ther the Managing i:. Director; Mr. James Eric Aiken was riot a pary:y. to the proceedings which led F to the decree soughf fo be·execu.ted . . and therefore . the . veil:·of· incorporation r I; · - should be lifted to grantthe order.sought. ;;· - · : f: ~ Let me state at this juncture that the issues, fo~. determin·ation in this ruling ~ , : have taxed my mind a great deal. I have· ~~·ked my~elf a question if it is~.· · .... .. ··•·: ..'_ - ' ·: ... , •. i . . ..~, ;· .. ~.. - . . -·. :: . . -. ! ~ ~· ... :_ ., -. . ,. t;. appropriate for me to entertain': the application 'without ··any evidence by L .... • _. . . ; _. : - .. - . - ;. . _-- r~ . . affidavit from the parties br their counsel. _;The lear::ned icouhsel for the decree :: ... ,.. ,, holder, for instancE=, ha·fs,t~te9 from the ba·r that ~II ot~er modes of en~orcing ' . ·,. ' _;,,, ·.:·.: ~- - .. . .. . . !:t.- the decree have failed ·herice a ·resort to

the -mode ,of assistance sought; F, · d.etention of the _man~sii~'g dir~ctor_ of thejud~;,,ent debtor a~ a civil prisoner; :: ,.· . . T:h~ ,learned counsel forth~)ud~rner1t:debto'r, as well; ~as explained from the;_ ' - . ~ bar wl1y the, alleged director of the judgment debtor's company should not be i~ sent to a civil prisor~. But I found solace in the provisions of Order XXI rule 10 ~. ·. (2) (j) which enlists the ingredients of the mode in Which the assistance of the,_ court is required in execution of a decree and Order' XXI rule 10 (2) U) (iii);- , thereof is about ''by. the· arrest and detention in prison of any person". Under! ~ . ; I the sub-rule, there Ts no : requirement · of an - affidavit. ·Under the 1 411 circumstances, I think it'.is appropriate to proceed with the application for! · execution, without any eviderrce by affidavit. The, foregoing said, let me· now proceed to the determin~tion of the questions. posed above. -= · On the first question, it is the judgment debtor's argument that Ametan · . . Contractors Company Limited against which the decree is sought to be· 6 executed was not .a . p~r:ty._J:0 the .,-arbitration proceedings a.nd its ultimate\, . decree.· It is argued.that-the •~ompany .a.gain~t which the decree is sought to!- be executed is Ametan Con.tractors Company Limited while arbitrationi' the', u'lti~at~,' deciee ther~of were ' against

Ametanl~ proceedings and ·. · ~ ,._ .-:·.: ,_ ~ .. :'i , :· . ·r, · :· . . · · . : :. · : - . - . .. -·_. . ~. . · , . · L Contractors Limited·.- ·rhe learned counsel for the judgment debtor hasii .<": • ' ·: ' ' '·; ,, ; ;,: ' ',,: . -;>·· . • : '' ', ', ' ,' .'. - ' ' ' ' [' cited- several authorities to ·buttress the point that the name of a party to a; .•. . - . .·, ..,:.... ·._··;_:·· ....:. . -.,. ·.·• .... _, ·. ., :..· . -- r suit should be clear, sli'o'rt of whicti the suit or proceedings will be struck out. ~ . •... ··. :· >.: r . . . r ·Ms·.. Ringo, learned ·counsel for Jh.e d.ecree h,older, :does not· seem to dispute[.'· • : • • !!- that the name of the cornpar;iy against- which .the, decree is sought to bet ~ executed is Ametan. Contractors.. Cgmp~ny· Lilnited and the name in the[ arbitration proceedings and in the· two applications fil~d in this court by th~i~ ' ' .. . ,'' . .. . . • ',' ' ' r_: decree holder is Ametari •Contractors Limited. The . ' word "Company"· is!~-·· .·, · · · ·. , ' '.miss'ing in the latte( ,· '~l;we~er,' sh e subrnits "th~t'' the. judgment debtor~ ' ·: : ' ,' 0 . submitted itself to. the arb'itratbr and jurisdictioh 'of this co~'rt under the name t- ' ofAmetan Ciintracto:rs LifuH:ed: 'All'documents fil¢d -in.this court includingi.: ·- .·~ :, r.::.... the counterclaim were iQ this nan1e. It is her view that the decree holder[ should . . be.

heard atth.e ~xecution stage to dispute the name under which,-- not ' he defended the arbitration proceedings and filed the relevant documentsk ' ' thereof in this court. I have subjected the arguments by both learned counsel on this point tO a· proper sieve .• I have also read the authorities cited by the learned counsel forthe judgment debtor. I thihk the law on the point is fairly settled and is as stated by Mr. Taira, learned_ counsel for the .. judgment debtor. The position of th€ law ori this point has been lucidly stated by my brothers ad the Bench in the three cases - Dar es Salaam Green Acr;s International -.School, Registered Trustees of Umoja .wa Wazazi Tanzania .and, Aloyce Hobokela - cited by Mr. Ta(ro whose reasoning and conclusiOn I .-find 7 -.·. myself highly persuaded with and in Christina Mrimi also cited by the learned counsel which binds me .. The, hallmark of these: ,decisions is that : correct names are of paramount importance. in judicial .proceedings. In Christina Mrimithe t~urt.;of qppeal stressed: - .• "Compani"es, like human beings, have to have. their names. They a:re. known anddifferentiated by their registered names: In the instant case~ -it · is apparent that 'Coca Cola.-Kwanza Bottles'; Coca .Co!a · Kwa-nzci Bottlers . Ltd' or Coca ~cola . aottles ·. · Ltd' have been used interchaogeably> >Although, the appella1it wants this court to hold that

they mean . one .·and. .the same Company~.· strictly,· this view cannot: be: accepted withouL some risk of · inexactitude'\. For the removal of doubts, th~'.Court of Appeal went further to state that it ~as· alive to the pmvisions of article 107A of the Constitution of the United Republic of . Ta.nzania·, '1977. which . require. courts to· give purposive interpretation to i~ws and. not en'courage provisions of the law on mere technicalities which impede justice. a·rid c~ncluded that this kind of irregularity '·· does not fall with the purview of the article. Flowing from the above, the discrepancy of names of the j':Jdgment debtor in the arbitration proceedings· and other- documents filed in this court _an~ the· . . name of the company against which the decree is sought to be executed is not trivial as Ms: Ringo would like this court· to believe. The names Ametan Contractors Cf;)mpany limited and Ametan Contractors Limited, as . . per authorities clted above, are ·not one and the same-. I therefore am in 8 agreement with Mr .. Taira, .learned counsel that Ametan Contractors · Company Limited against ,which the decree is sought to, be executed is a stranger to the arbitration ,·pr-0.teedlngs ··fr:orn· which the· decree stems. It is . elementary law that a decree cannot be. executed against a stranger _to legal · proceedings . . The foregoing disposes this· matter ... fain aware,

as alluded to above that Mr. • .· : . ~ ~ ~ ' . : .• ; ; : •. ; : • '. ~.-• .• -. ·. : : - • I• :' •. _. • ' . . . Tairo also.challenges the decree that the arbitral award was not registered as a decree of this court.,.·:Lthink,·this is not a proper ,foruni to .challenge the . decree of this court As for Hfti.ng; th~ veil of incorporation before proceeding against a director of a cornpanY,:l:,do not wish to address it as will not have any value addition to the outcome of the application. That may be dorie at another opportune moment· Havir1g so found and h~ld, I, ~tat~ that the decree against Ametan Contractors U121it~'!!d .cannot be executed against Ametan Contractors · Company Umiteit -rhus. the rnode of ·assistan~ sought by the decree .. ' . ·•, holder; that is, to cornmit Mr. James Eric Aiken; managing director of Ametan Contractors Company Limited to civil prison·, is refused. The circu~1stances of the pre~erit. matter are ·s~c:h that there :should be made no . . : .-. ~~ order as to costs. No order is made as to costs in the present a·ppli~iiion .. Order accordingly. DATED at DAR ES SALAAM this 17th day of October, 2016. · J. C. M. MWAMBEGELE · . JUDGE 9