MOHAMED GAHER VS ETHALION LTD COMM CASE NO

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IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA

COMMERCIAL DIVISION

AT DAR ES SALAAM COMMERCIAL CASE NO. 9453 OF 2024 MOHAMED GAHER…..…………………………….………………..1ST PLAINTIFF ABDILAH GHAHER………………………………………….……… 2ND PLAINTIFF MOHAMED GAHER (Administrator of Estate of GAHER MOHAMED)..…………………………………………… 3RD PLAINTIFF MRS. ASHA ABDULKADIR………………………………………… 4TH PLAINTIFF

VERSUS ETHALION LIMITED…………………………………..….……... 1ST DEFENDANT LEON EDWARD HOOPER…………….…………………….…… 2ND DEFENDANT

RULING July 15th, 2024 & August 30th, 2024 Morris, J The plaintiffs instituted this suit praying for the judgment and decree of the Court against the defendants jointly and severally. The reliefs sought by the plaintiffs include: a declaration that the defendants breached the Share Purchase Agreement by failure to timely comply with the Decree in Commercial Case No. 97 of 2020 of USD 1,600,000. The stated amount allegedly was the outstanding purchase price of shares bought by the defendants in Arusha Cement Company Limited. 2 Further, the plaintiffs prayed for orders of the Court to restore the whole shares allotted to the defendants back to them; evict the defendants out of the factory of Arusha Cement Company Limited; handover of the plants, machinery and all equipment in their original state as they were before they were possessed by the defendants; general damages for breach of contract and the plaintiffs’ suffering; costs of the suit; and any other relief(s) that the Court may deem fit and just to grant. However, in their joint written statement of defence (WSD), the defendants denied the above allegations and included therein a preliminary objection (PO) based on seven (7) grounds outlined below.

1. The plaint served on and received by the Defendants indicate that: (a) is for Commercial Case No. 9451 of 2023; (b) was verified and dated on 30th November 2023; and (c) was filed in the Hon. Court on 28th May 2023.

2. One of the Plaintiffs’ causes of action is alleged to arise from breach of Sale of Shares Agreements executed in 2015, the suit is time barred. 3 3. The suit is either res judicata and/or res subjudice an ongoing appeal process against the Court’s judgment and decree given in Commercial Case No. 97 of 2020 between the plaintiffs except the 3rd plaintiff and the defendants as evidenced by a Notice of Appeal filed on 28th August 2022.

4. The suit is bad in law and/or defective for joining therein the 3rd plaintiff who is neither a party and or/privy to the Sale of Shares Agreements nor a party to the previous suit.

5. The suit is neither maintainable nor tenable in the eyes of the law for being founded on a judgment of the same Hon. Court involving the same plaintiffs (save for the 3rd plaintiff) and the same defendants whose cause of action were the same - Sale of Shares Agreements.

6. The plaintiffs’ two causes of action are inconsistent and contradictory to one another for alleging, on the one hand, as arising out of this Court’s judgment while, on the other, alleges from breach of contract. 4 7. The plaint is defective and/or bad in law for not pleading the periods each or both of the two causes of action arose for limitation purposes. Pursuant to this court’s order dated 15.07.2024, the PO was heard by parties filing written submissions accordingly. Apparently, both parties enjoyed the representation of learned counsel. For the defendants and plaintiffs were Messrs. Michael J.T. Ngalo and Fraterine L. Munale, respectively. The defendants’ counsel commenced his submissions by abandoning the 1st ground of the PO. He then proceeded to argue on the remaining grounds in a manner to be revealed in this ruling. Submitting in respect of the 3rd ground of the PO, he argued that the present suit is based on the judgment of the previous suit (Commercial Case No. 97 of 2020). He hastily argued that, in both suits, parties and the subject matter are the same. Thus, the latter falls within the precepts of res judicata rule. He further submitted that, there is a pending appeal (initiated by filing the notice of appeal) against the judgment of this Court in respect of the previous suit. Thus, according to him, the present suit ought to be stayed for being res

subjudice the said appellate processes. 5 On the 4th ground of the PO, he submitted that, the late Gaher Mohamed (the 3rd plaintiff) did not sell any shares to the defendants. Hence, he is not part of the agreements upon which the present suit is based. However, the counsel acknowledged the fact that, the 3rd plaintiff though pleaded in the previous suit, was later on removed following an amendment of the plaint. He thus maintained that; the 3rd plaintiff does not have a cause of action in this suit whatsoever. The 2nd and 7th grounds were argued jointly. Reference was made to rule 1 of Order VII of the Civil Procedure Code, Cap 33 R.E. 2019 (the CPC) regarding the requirement of the plaint to contain facts showing when the cause of action arose. Thus, it was submitted by the defence that, the plaint in the instant suit has failed to comply with such requirement. It was further submitted that, the present suit is time barred for being preferred beyond six (6) years prescribed under the Law of Limitation Act, Cap. 89 R.E. 2019 because the causes of action arise out of agreements executed by the parties herein around 2015. Besides, the 5th and 6th grounds were argued jointly. The defendants argued that, this court does not have jurisdiction to entertain the present 6 suit for the same is res subjudice or res judicata and time barred. Thus, it ought to either be dismissed or

struck out. Reference was made to the case of Mohamed Enterprises (T) Limited v Masoud Mohamed Nasser, Civil Appeal No.33 of 2012 (unreported). The plaintiffs, however, did not register concession to the PO howsoever. Submitting against the 3rd ground of the PO, their counsel asserted that, the appeal process by virtue of the Notice of Appeal (marked as TAB 1 in the WSD) does not apply to the principle of res subjudice. To him, the said notice is presumed withdrawn under rule 91(a) of the Court of Appeal Rules, 2009 because of being time barred. The reason behind his argument hereof was that, the same was filed way back in 2022 and it has thus, been pending for two (2) years without there being institution of the appeal per the law. He went on to submit that, the principle of res subjudice applies to suits as opposed to appeals and applications. On this regard, reference was made to section 8 of the CPC as well as, section 3 of the Law of Limitation Act (supra). He therefore, prayed for dismissal of this ground for want of merit. 7 In regard to the 4th ground of the PO, the plaintiffs submitted that misjoinder of parties is not a pure point of law; and that, no suit can fail because of a party being improperly joined. To buttress this position, Order I rule 9 of the CPC was cited as an authority. As to the issue of cause of action, reference was made to the case of John

Mwombeki Byombalirwa v Agency Maritime Internationale (T) Ltd [1983] TLR.1. Against the 2nd and 7th grounds of the PO, the plaintiffs’ counsel maintained that the same were misplaced because by virtue of paragraphs 3 and 11 of the plaint; the question as to where and when the cause of action arose is very certain. Also, regarding the allegations of this suit being time barred, it was submitted that there is nowhere in the plaint to ascertain this ground. On the 5th and 6th grounds of the PO, the counsel once again made reference to paragraphs 3 and 11 of the plaint, as indicated above. He further distinguished the applicability of the Mohamed Enterprise’s case (supra) as relied upon by the defendants. Moreover, reference was made to item 16 of Part I of the Schedule to the Law of Limitation Act (supra), and the argument raised that, time limitation for suits founded on judgmnts is 8 twelve (12) years. Further reference was made to the case of Eva Daniel Mtasha v Tanzania Wildlife Management Authority and Another, Civil Case No.2 of 2022 (unreported). Therefore, he prayed for dismissal of the PO with costs for want of merit. I have considered the pleadings, the grounds of PO and the respective submissions of both counsel dispassionately. Naturally, while the defendants support the PO, the plaintiffs oppose it. Hence, the issue for determination by the Court is whether or not the

six-limb PO has merit. I commence with the point that this suit is either res subjudice or res judicata Commercial Case No. 97 of 2020. This preference is based on the fact that these doctrines are integral parts of the jurisdiction of this court at this moment. In principle, there is no dispute that res judicata is well founded under section 9 of the CPC. For clarity, I reproduce the said provision hereunder; “9. No court shall try any suit or issue in which the matter directly and substantially in issue in a former suit between the same parties or between parties under whom they or any of them claim litigating under the same title in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised and has been heard and finally decided by such court” (bolding rendered for emphasis). 9 Basing on the above quoted provision of the law, therefore, the position is now settled that, for the principle of res judicata to stand, five conditions must be met. Namely, the matter in issue in the subsequent suit must have been directly and substantially in issue in the former suit; the former suit must have been between the same parties or privies claiming under them; the parties must have litigated under the same title in the former suit; the court which decided the former suit must have been competent to try the subsequent suit; and the matter in

issue must have been heard and finally decided in the former suit. The foregoing principles have been echoed in various Court’s decisions including Peniel Lotta v Gabriel Tanaki & 2 Others, Civil Appeal No. 61 of 1999 and Felician Credo Simwela v Quamara Massod Battezy and Another, DC Civil Appeal No.10 of 2020(both unreported). Therefore, guided by the same principles, I am of the settled view that, the same have been met in the instant PO. This is for obvious reasons. I will account them one by the other. One, the matter in issue in the present suit and in Commercial Case No. 97 of 2020 is directly and substantially the same (paragraphs 3, 7 and 9 10 together with the substantive reliefs in the plaint). Essentially, what was claimed in the previous suit and what is claimed in the present suit are substantially the same (payment of USD 1,600,000). Two, the parties in this suit and in Commercial Case No. 97 of 2020 are the same. This fact is not disputed at all by the plaintiffs. Seemingly, there is an inclusion of the 3rd plaintiff which step slightly would adjust the similarity of parties (paragraph 4 of the plaint). However, the law covers such extension. The quoted provision above, caters for “parties under whom (included parties) they or any of them claim litigating under the same title.” Hence, with or without the 3rd plaintiff herein, the second condition is

satisfied. Three, the parties herein litigated under the same title in Commercial Case No. 97 of 2020. Undisputedly, the crux of the plaintiffs’ claims in both suits is the alleged Purchase of Shares Agreement. As this fact stands uncontroverted by the parties in the PO, I will stop at that point. Four, this Court decided Commercial Case No. 97 of 2020 and issued the necessary decree (the plaint’s paragraphs 3, 7, 8, and 10). It is also competent to entertain the present suit. This fact remains undisputed, either. Five, the 11 matter in issue in this suit is breach of the Shares Purchase Agreement. The same contention was litigated in Commercial Case No. 97 of 2020. Nevertheless, the plaintiffs raise the arguments that the present suit is based on the judgment which is not the similar cause of action as was in the previous case. But I am inclined to reject asseverations. To begin with, the plaint is very categorical that the plaintiffs’ claim against the defendants is that the latter “breached the Share Purchase Agreement by failure to comply with the Decree in Commercial Case No. 97 of 2020”. The reliefs sought are equally rhyming with such legal foundation. There is no mention of the judgment being the basis of the suit howsoever. I find it difficult to even repeat the legal principle that parties are bound by what they plead. Further, the argument that the suit is based on

the judgment is obtruding in the submissions of the plaintiffs’ counsel. Once more, the law abhors reliance on such submissions in the absence of the corresponding pleadings and/or evidence. In addition, if the pleadings of the plaintiffs are the position to go by, failure by the defendants to satisfy the Court’s decree cannot not give the decree holders therein a completely new cause of action. 12 Lest, the Court in the present proceedings will be performing the execution role in lieu of determining the disputes between parties. Out of obvious curiosity, one wonders what the plaintiffs would do if this Court were to pass another decree in the present suit after the defendants’ failure to, once again, satisfy it. In my view, it is opportune to the parties to appreciate that each category of proceedings was promulgated by the law to suit a certain state of affairs. Execution of the decree, for example, cannot fittingly be pursued in lieu of revision or appeal processes. In principle, law prevents pursuit of cases that are res judicata. There is a firmly established rationale for such position. It is fourfold: to save time and other resources of the parties and the court; to ensure finality in litigation; to complement and perfect the functus officio rule; to bar abuse of the law by the parties who would tend to initiate new proceedings in lieu of appeal for matters that are

otherwise not appealable (such as consent judgment); and to minimise the risk of courts trying cases founded on afterthought concoction of causes of action and/or working on adulterated evidence associated with persistent/habitual institution of similar cases by the same parties. 13 Hence, for the foregoing reasons, analysis and elucidation; I find this ground of the PO meritorious. The same is consequently allowed. Since this ground is sufficient to dispose of this suit, I find no reason to proceed with determination of the other grounds of the PO. In the premises, the issue raised is answered affirmatively. For lucidity, this suit is res judicata Commercial Case No. 97 of 2020. Subsequently, the same is dismissed with costs. C.K.K. Morris Judge August 30th, 2024 14 Ruling delivered this 30th day of August 2024 in the presence of Advocates Fraterine Munale and Safari Malata for the plaintiffs and defendants respectively. C.K.K. Morris Judge August 30th, 2024