20151215 TZHC Dar es Salaam

,, Page 1 of 25 1 . ·t ·IN THE HIGH C:OURT, OD·TANZANIA (COMMERCIAL DIVISION)

DAR ES SALAAM • I COMMERCIAL CASE NO 86 OF 2013, .

BETWEEN I AFRISCAN GROUP (T) LTD --------i---~-----------------PLAINTIFF

I

VERSUS DAVID JOSEPH MAH EN DE---------y-------------------DEFENDANT . JUDGMENT ~~ ~s·~~ l~{\)1>t- ~ ~ J I ' Date of the last Order 25/11/2015 Date of Judgment; 15/12/2015 ' - ~~- ~ ~ ~~&1.\-, . . ~~""-;_Jl~l~ SONGORO, J I - . . --~ ~ On the 25 th July, 2013, Afriscan Group Ltd, the Plai.ntiff filed· a suit against David Joseph Mahende the ·Defendant daiming for a court declaration that, the Defendant lawfully sold, and transferred I his 10 ~ I shares in the Company known as Afriscan Construction Company to the Plaintiff Company. I I In the Plaint, it is stated that, the Defendant was a founder member th of Afriscan Construction Company incorporated on 30 October, 1990 and had 40% shares, and on Septerriber, 2000 at a Joint Meeting the Defendant agreed and sold 10 % of his shares and remained with I 30% shares. . t Page 2 of 25 It is further stated that, while the Plaintiff company was in business, . the Defendai1t has ·insisted that, he has never sold any shares and ' . that, prompted the filing of the present suit and is praying for the following orders and relief~; 1. A declaration that, the defendant had lawfully sold and transferred 10 % of his shares in the company known as Afriscan Construction Co Ltd.

2. Payment of General Damages to be assesse.d by the Court 3. Costs of the suit 4. Interests on the Decretal sum at the court rate of 12% from the date of the Judgment until payment on fu\l. In response to the Plaintiff suit, David Mahende, the Defendant fited a Written Statement qf _Defenc·e and firmly opposed the Plaintiff's c' c1a·im_. Further, the Defendant contested that, he never sold any -, . . . shares to the Plaintiffs company, and prayed for the dismissal of the suit In the light of the Plaintiff claims, and Defendant's and Defences and, denials the Court after consulting the parties, drew the following as agreed issues for determination; 1) Whether or not the Defendant sold and transferred ten shares to the Plaintiffs company; 2) If the answer is in affirmative whether the Plaintiff suffered any damages as a result of the Defendant denial of the sales; \ 3) What reliefs are parties entitled too. . _, . I- Page 3 of 25 I . .: . ; ... -In view of the '".above; the .Plaintiff:::suit was heard,:ap8 concluded qn the bilsis of the above-mentioned· clgrLed issues. • ! •. . At t~e hea~ing of the. s~it, /:~ r. iutabi ngwa, Learne~- ·~dvoccite 1 appeared fotthe Plaintiff; whereas. [i)efendant waS . ' Irepresented by Mr. Mbambar Learned Advocate. In pursuing his claim, the Plaintiff caUed Ulf N~lson I ho testified as PW!, and informed the court that, ~e had filed a Written

Statement in Court. After, that, PW! tendered Jhe Memorandul'\l and Articles of Associai:iorl of Afriscan Construction Company whicK were admitted as Exhibit Pl, and Certificate of Inca poration whi~h lvas admitted as Exhibit P2. I I . Further, PWl tendered a transfer·· of share of David Mahende together with a receipt which ~as admitted as Exhibit P3. Furthermore, PWl tendered a letten from the Defendant which was I • admitted as Exhibit P4. After that, PWl was cross exami led by the Deferce Counsel, he explained to the court that, shareholders of th~ f?laintiff company • I • were David Mahenge who had 40% shares, Afrisctan Group had 40% shares which were sold to Farida Ulfson and I thereafter Afriscan group ceased to be· shareholder ii Afriscan cohst~uction company Limited. Page 4 of25 On his part PW1 said is minority shareholder in Afriscan gtoup which . · sold .. its shares to Farida Ulf Nilson, and was. representing Afriscan ~ ' . group company Ltd in.the Meeting of Afriscan· Construction Company~ He finally insisted tha~, the Defendant sold his 10 % shares and has remained· with only 10% shares, and they had a Board Resolution to that, effect. After PW1 closed his testimony the Plaintiff called Raymos Zakayo who testified as PW2 and stated that, he was an Accountant with the Afriscan Group. He then told the court that, he was an eye witness to Exhibit P3 which was a

state·ment of sale of shares between the Defendant and Afrisca·n Group. Also, he . claims to have witnessed a sale of shares between Mr. Msangi who signed a sale of 20% shares. Finally, PW2 said, his role in that transaction was just to be a witness. After PW2 testified, the Plaintiff called Farida Ulf Nilson who testified as PW3 brief the court that, she had file a Written Statement in court and would like the court to take into account. Relying on her witness statement, PW3 briefed the court that, Ulf Nilson is her husband and as her family member is taking care of her business interests. I I .Page 5 ,of 25 , - - .I I ~- , Fu~~er PW3 toldtlie court_ that; ori t~e,.lS/9/2000·,s _e attended, 1;1, meetirlg of Afriscari construction comp~ny Limited ~h~bh deliberated on the financing of the ir'rigati~n projtct- She then! el!borated that,· the meeting was chaired by Mr. UI~ Nilsson. To prbve that, tbe. . .. I meeting took pl~ce, she tendered h,inutes of the shareholders· 1 meeting which took place on the 15/9( 2002, and it: wqs admitted as Exhibit PS. . I Then PW3 clarified that, in Exhibit: PS which iJ ~inutes of the · Meeting, it was decided that," Afri-Stali Group will I iliject additional 1 amount of shs 20,000,000 from hisI own sources tb finance and ! [· . • , • I complete . two company proJects. In :return, ! • 1t was resolved I that, Mr.'.'• David Mahende who had 40% shares

will transfer his 10% shares to· Afriscan Group. · . I .- In view of the above, David Mahen~e, I agreed and transferred his ; 10% shares to the Afriscan Group. P~3 said the ~al. of shares was •. I discussed in the meeting and a Resplution was made, agreed, and signed by the shareholders including Mr. Mahe~de. She then defended the sale of shares of Mr. M~hende by saYin9 he intended to sale some of his shares, and procdJure was foll~wkd including the I I . issuance of notice. I . " I ' " ~ ·.-.~~;,~fr:,~- ,,~.'.!:~>•.,".~~.•.:,·~.::···;,:: n ~,:i:-:, ·,.~;;t.. ,-·~ 1 , ~~-:· Page 6'of25 Finally,· PWJ insisted_ that, Mr.· Mahende sold his shares to Afriscan - Group and they paid the share purchase price. After, PW3 fir,ished her testimony, the Plaintiff called E. 2912 SSgt Johannes Joseph who testified as PW4 and tendered a Handwriting expert report which was admitted as Exhibit P6. In view of Exhibit P6, PW 3 informed the court that, he conducted investigation on documentary exhibit which was-brought to him from the office of Mr. Rutabingwa Advocate. In his Defence, David Joseph Mahende testified himself as DW1 informed the court that, he has copy of Judgment of Land Case No 66 of 2007 delivered on the 25/7/2014 which was admitted as Exhibit D1. Then he tendered a Certificate of Title No 40380 of Plot No 569 Mikocheni Medium Density which was admitted as Exhibit D2. Further, he

tendered a document with title Sheria ya Makampuni No •' 12 ya 2012 from BRELA which was admitted as Exhibit D3. Later during cross examination and re-examination, DW1 told the court that, their company started in 1990,. and in 2000, their company had several projects including irrigation Projects in Arusha but he was in the Army fulltime b_ut was also supervising company activities. I - ! ' ]?a~e 7 of25 ~. .;. .... \ .l'I •el/' ~. - ' .• • .•.• i • •· He further',· stilrtedtthat, th'et'e'Was,~:.m on:ient hE! ·wrot~- cl le~err.to the, ·· ,. . , . 1 Registrar referring· Ul_f Wilson aS the'D,t,e~or, an~ Manrging ;Di~ector . of the Compan: b~t in fact he IS no~ tte director b_efause he sold his shares to his wife in 1991 and cease<il to be member of[the company. . He then explained that, the sharehold4rs of the Afrtan Co~s~r~~ti~~ · _ group are himself, Joseph Mahende, Saidi Msangi, and Farida Ulf Nilson. · . . I Regarding the Minutes of the Mee ,ing which tdok place on the l ' _I I 15/9/2000, DWl said, he did not atl:end, and the signature which appears on the said minutes is not his signature. Further the witness said Farida Ulf Nilson, does n It I know about 1 Afriscan Const~uction Company beca se he was rn ot involved .in. its [ 1 business. In respect of a report ~f handwriting exJ)ert, DWl s+ed_ that shows 1 that, there was a meeting but the signature also 1s n@t his. While

on the point, DWl down played the repo~ by saying e\let the signature~ which were sent for fo~ensic invetigation was I nl his, but w9s obtained from, Mr. Rutabmgwa, Learmed Advocate.: . , I Page~ of 25 . Ir.1 Jhe light of what he stated, .DWt maintained that, he..stiJI ~old 4Q - shares, and did not transfer ,any shares as alleged by the Plaintiff, and his witnesses. Next, OW1 told the court that, in. 2003 he chec.ked with BRELA and found he has been removed from directorship -of the Afriscan Construction Company Limited and reported to the Director of Criminal Investigation at the Police Headquarters. Then, he said there is a time, he signed a document which shows contribution of profit of each shareholder's. · DW1 after defending himself, he called Saidi Abdallah Msangi who testified as DW2 and said he made a witness under the oath and would like the court to rely on it. Further, DW2 denied completely that, David Mahende DW1 did not sale_ any shares. H~ then explained that, it is true their company had several projects including that, of supplying Laboratory Equipments · to Ministry of Education, in 2004. Also DW2 said as structure engineer was an overall director, and Mr. Mahende DW1 was involved in supervisions of the Company's projects. Furthermore, DW2 stated that, in their company there is a dispute on · the transfer of shares because Afriscan Group Company

limited ... Page 9 of 25 i .I thi6uQ\,"lts,tlirecto~;·4orged Sa1e Of s~ares. He thE!~. cl . irried .that,. his •.. . , -· . . >' ., ..:· . Ii . . · >'· I sigiiatures and that: Of DWl have bee1 ·used to forQf:? ,sr .. . . . · > .,· .:•. , of shares,; Finally, he maintained that,· the sh~re structure o} the Afriscan ! I Construction Company Limited is ~idi Abdallah t1sangL ,has 20 Mahende Joseph 40 shares, and Faqpa Nilson 40 shlares. He even emphasized that, even the Memorancium and Artidesl of Association did not change and still recognizes !he Saidi AbdallJh Msangi and I, Joseph Mahende as directors, and ·trey denied to have sold, any I I shares to Afriscan Group. I . II ,- ....-:· .:, r •,·. After DW2 testified, the Defendant cifsed his case Sjo that was the 1 end of Plaintiff case, as well as the oefendant's case. In view of the 1 · closure of the Plaintiff, and Defendant case, counsJls ram both sides I I with the leave of the court made their15ubmissions. Mr: .R~tab'.~~wa_ for the Plaintiff expl~ined to the cl u1 that, Afriscan Group Company Limited was a fo4nder of Afrisc:an Construction. Company Limited which was incorpo~ated in 199ol ahd the Plaintiff had 40 shares, Defendant had 40 sh~res and Saidi Jbdallah Msangi. had 20 shares. Further the counsel argued that, _the iAfris~an Con~tr ction Company was awarded several project works, 'and the Com~a~y did not have funds to

execute the said projects. sP, the Plaihtiff, ~rough Mr. Ulfi . ' . • > • ~@~ • . . . ' Page 10 of25 ' ~. ,• I • ~ ~ •' ,~ i'.{ I ~ . ,;; . ,,;_,, '· Nils~n, th'e Mahaging Director agreed to inject funds-to the_ project,.Jr1, · · return the Defendant agreed· to sale his 10% shares. The_ Plaintiff insisted that, t~e sale of share agreement was concluded . . . ;., .· Then, relying on Section 10 of the Law of Contract Cap 345 R.E.2002, Mr. Rutabingwa submitted that, all agreements are contract if they are made by free consent of the parties competent to contract, for lawful consideration, and with lawful object. Further, Mr. Rutabingwa pointed out that, pursuant to Section 74 of the Companies Act, Ca..Q 212 states that, shares are movable property transferable in a manller provided in the Articles of Association: Then on the sale of share, the Plaintiff counsel then explained that, there is evidence that, the Defendant sold, and transferred -his shares. But Defendant while in court has retracted his signature on sale of sale of shares document and the sale and transfer of shares. The Counsel then submitted there is testimony of PWS who is the handwriting expert and relying on Exhibit P6, he gave the evidence and confirms that, signatures on both shares transfer, and minutes were those of the Defendant. Relying on the_ book written by Eminent Legal Writer Grower and I Davies,

Principles of Modern Company Law, Eight Editions by Paul Page J 1 of 25 I ... .! I .. ' . ' ' i ', ' The "first step" the "buyer" and "seller" concludes the sales contract where theY agree on'°t_he pric~ :hie~ the shares ~rej sold, and on . I I other terms of transactions, this 1s said· to be "trading". The second 11 I I step is "settlement" whereby certifica~e of shares are sold. He then · I: I I insisted that, sale of shares is completed i by delivery . of certain transfer documents to the buyer. - . I Turning to the Plaintiff ~claim, tbe counsel su~mi ed that, the. I Defendant undertook to sell his shar I s because h~ s\gned the sale In respect of a claim for damages, te Plamt1ff qou sel submitted that, there is evidence that, Defendf't sold his sMar+ in 2000, but has alleged that, he knew about the s[le of share irl year 2013. He then explained that, the continua,: s Defendants c aim on :ale of I• shares has caused embarrassment! and painted b d image and picture to the Plaintiff, its members a~d directors, and caused a delay in the realization of the Award which ~as granted i~ tHe Arbitration. i_ I I I I. I Pagel2of25_. · He then maintair)ed that, th~.Pla:iotiff is entitled. for general dan:,age·?· . Finally, ML Rutabingwa prayed for judgment and decree in favour of the Plaintiff as prayed in the Plaint. . On his part, Mr. Mbamba Learned Advocate for the DefendarJt

made detailed submissions to support the Defendants defence. To start with the Defendant's counsel admitted that, the Plaintiff is one of the shareholders of the Afriscan Construction Company Limited and had 40 shares. Other shareholder was the Defendant • who had 40 shares· and Mr. Saidi Abdallah Msangi who had 20 shares. Then relying on the witness statement of DWl · in his written statement he submitted that, the Defendant on his own words had denied to have sold part of his share~ as claimed by the Plaintiff. He even added that, the Defendant has even denied to have signed the share sale transfer form. Responding on the sale and transfer of shares documents whic.h_ the Plaintiff is relying upon, the Defendant's counsel. submitted that, there is no proof if the requirements of sale and transfer of shares .· stated in the Articles and Memorandum of Associations and Regulations on transfer of shares were complied w_ith. .. ! 11 I I ·• Page 13 of 25 . I, . I I -?~:\.:·\. (..~.::· He ttieh 'hoiilfed 'bu( th"at; under;'.if);r;tj~le 4,, of .c,l)l!!,!\JI.; .2, ·.a~d } .pf I • • • - • • .. - Mefnorahdurr{·and Articles Associatiohs, I' .;.the . sale,' a~,d transfer - - of shares to non· member is restrided. i· I :. , ,,,.,.,, ., , ' -} . after issuing a: prior notice to the Bo~rd, and other directors, and the ~otice shall contained the propose& price per shares. . . i: I I - :

i"I The counsel then argued that, in es)ence , Afrisca~ doup I ceased to be a shareholder of Afriscan constrJ ction co Limi:ted in 1990 after 1 seliing·· 'its shares to Farida Ulf Nilson. ,r:.Itfollows.therefb,.re~ that, ' ' . . F.arida' . ' . I Nilson became a shareholder of ~frican construqtion Company Limited and replaced . the Afriscan GroLp ! Limited. I ' . \ . While on this point, Mr. Mbamba sirongly arguJ t~at, pursuant to Article 4(b} and(C) of certificate of incorporation] t~e shares ofthe - ' ' , I' ' I Defendant could not have been tran~ferred or lawfully transferred to Afriscan Group Co Ltd who was none member and I (at shareholder to the Afriscan Construction Co Ltd. ; I He then strongly insisted that, Artie!¢ 4 predetermine! who the shares of .the company may be sold . to,\ ·and said i~ i~ on the other I i I . I . shareholders. Furthermore the Co~nsel challengedI the · sale·· and i transfer by saying that, it was not!, preceded by a prior notice to [, I • . •• shareholder as required by Memoran~um and Artilles of Association. I. . ,·, I,: I: Page 14 of 25 Next, the Defendant's Counsel argued that, since it appears the . procedure on . sell· of shares was . not adhered . too then it cannot. be argued that, in year- 2000 ten shares of the Defendant was lawfully sold to Afriscan Group Cb Ltd who was not shareholders. In short the Defendant 's counsel argued that,

going by restriction contained in Article 4 of Exhibit P2, Certificate . of Incorporation , Afriscan Group Co Limited being none member was not allowed to purchase the shares of the Afriscan Construction Co Limited. Another point which Mr. Mbamba challenged the sale and transfer of share that, were irregular is that, ~n the Meeting which took place ·and on Board Resolution of shares, Mr. Ulf Nilson voted while he .was not a shareholder and director of .Afriscan Construction Co Limited. The Counsel then clarified that, Mr. Ulf Nilson was not qualifying to be a chairman of the said meeting or to vote. So the meeting was irregular. Next, the Defendant's council requested the. court to ignore the · Forensic report because it did not comply with the 3rd Schedule .of the . Criminal Procedure Act, Cap 33 [R.E 2002}. Finally, Mr. Mbamba submitted that, ·in the absence of prior notice of the Defendant to the Board, desiring· to sale shares, and absence of \ "i r f l,l \.i>¾~c"~t-~~~~'.~,,,:,:;;:c~~~/"'«'{4.~(,';;~ili~Y,~~~~-iJill'~~~~~~~,-mt;,,-i'C,,:r~~.~"'i;-ri'cp:;,ry~~:r,;;--;~-c,.•:.;__.,'f,;"1'.\""~ Page 15 of 25 I 21 d~ys i10tiC:e; to shareholders; and ~~se[\ce of proof pf purch~_se Qf "shares, it cannot be lawfully argued t~at, there was p1oper sale. an~ 1 ,. , .. : : __...' . , ,.. , . • I . .. ;, . transfer of shares. · , The court has carefully considered, an:d yveighed, the

~laintiff Clai~s, .i • I . , . Defendant Defenc_e, plus the _evidence from both sides and finds that, 1 all three agreed' issues of (1) whether or not the Joseph Mahende . I . DWl sold and transferred his 10 sh~res held in Afrisc~n Construction Company Limited to Afriscan Group . Company Limited. I (ii) Whether the Plaintiff suffered any damages arid (ill)_what reliefs, what reliefs • I are parties are entitled too are relevant for. deter+ination of the present suit. In view of the above, I ~ill address all t~ree key issues , I one after another. , I .I Turning to the first issue Whether or not the D_efendant sold his ten • • I I shares to the Plaintiffs company, . honestly, I find that, I is a question of fact which may determined by assessing the evidence which is before the court by the parties them~_elves. .: Going into presented evidence, the rnurt find there a~e testimonies of PWl, PWl and PW3 who said they i,were present a~ the Meeting of Shareholders, it was resolved and ~greed by ' Mr. J David Mahende I I who had 40 shares to sale and transfer his 10 , shares I to Afriscan Group." ' · I I Page 16 of 25 • • ~ I. ' ..... s., .... _,.,:",,~: The Coo-rt· find, testimonies of :·the PWl, PW2 .. and PW3 is ..w~n; supported and corroborated by Exhibits PS -Minutes of the Meetin9 of Shareholders Exhibit- PS in which -at Clause_. 3 has a column of . - Allotment of Shares. Indeed

Exhibit PS reads as follows "Minutes of the Meeting_ of Shareholders of Afriscan Construction Co_ Ltd at the office in Dar es Salaam on Friday 15 September, 2000 which was held the chairmanship of Mr. Nilson"_Further Exhibit P3 is a transfer of share Form. Further Minutes No 3 on allotment of shares reads as follows 3 ALLOTMENTS OF SHARES IT WAS RESOLVED THAT, Mr. Saidi Msangi sells his shares 20 in Afriscan Construction to Afriscan Group at a considerntion of 20 xl0,000 totally Tshs 200,000,~and THAT, David Joseph Mahende sells ten shares in Afri Scan Construction to Afri scan group at a consideration of I Ox I 00'00 totally shs I 00,000. The Composition of shareholding thereafter is; David Joseph Mahende 30 shares =40 of the share capital Farida Nilson 40 shares =40% of the Share capital . Afri Scan Group. 30 Shares =30% of the share capital The perusal of Exhibit P3 shows it has resolution on sale of shares, · transferee, and transferor of shares, and signatures of both transferee and transferor. Next, the court find, . the testimonies of PWl, PW2 and PW3 on sale . and transfer of shares is supported by details of Exhibit P3, which is . Transfer of Share Form. The form shows on the 15/9/2000, the Defendant sold his · 10 shares held in Afri scan Construction to Afriscan Group. . .

. ra:":.<.,:{,:.J,,_"';:;~%~i.~::Mlt<;~1.rr.:c;:-;:i.~0r~~?'~•ti'iJ,,;-K'5:'i;;5:f,~~"~~'.Q",i,i;/tf,f,rt~~~-',~•l:(r'.l';!>1-~I':t-t/<'.A'\~c<sZ1~~it...~·!:~f-;~1~;,Jt~'f'<:Wit.'~~~~.>i:~·- , I I Page 17 of 25 ' • I I :.·1•~ • · ' : , . ,' i: • ·.-Quite·frankly: t fine:lstatelnentsi\jn.,:exhibJts ~3, and p~ /giv,es. .. "· . .• I.. , cr,~deQce, -~, · ! , . ·, . . . '. . . and' supports 11 the testimonies of ~Wl PW2 and PW3 i~h~~; they •·... ,, •• I ,.• ,.;'._ • ,,. • I wittieSS~if the Defendant signing ,M.inutes_ of thr reeting Which allowed him to sale his 10 shares -:i:tl. ~fri Scan Constru~tion 'co Ltd to ···.: Afri Scan Group. · I · The Defendant is firmly contesting t~at, he did not Jign I Minutes of. the Meeting sale of shares- Exhibit P5 and he did ;no~ even sign the 1 transfer of share form Exhibit P3. I · I I , . I But the· testirilony· bf David Mahende DWl that he diid:::,not.sig--h " I I . . .. the Minutes of Meeting, and Share Transfer Form was challenged by 1 testimony of PW4 E. 2912 SSgt Johannes Joseph, ~he handwriting 1' I . ', I expert who claim to have exami~ed the Defendant's· disputed signatures on Exhibits P3, and PS, all(! compiled a re9ort which has a. title of DOCUMENT . EXAMINATION R~PORT . UNDER, SECTION I 205 OF 1 THE CRIMINAL PROCEDURE CODE CAP 20 R.E.200~ which was I , - admitted as Exhibit P6. , I Then relying on his findings in Item 3 of Exhibit p6, PW4 in his witness statement, ·and oral testimony stated that, h~ compared the · "disputed signature" on the Minutes :of the Meeting 1nd compares it with specimen of · signature of the ~efendant whic~I was availed . to him, by using a "modern microscopes VSV 6000 I Video Spectral comparator". And during his examinlition, he I discoiered significant ' I I i i

I I I Page 18 of 25 - ' ,· , ' - ' • ♦ ;,.• '., • -· "!° ·.. ,,simil·ar:characteristic of· letters,. and stroke ·formation between the;;,:,. disputed signature, and ··specimen signatures of the Defendant, like the one which Wqs on the Transfer of right .of occupancy .of Plot No 570 an agreement dated 14/3/2006 which the Defendant signed it, in the normal course of business. He then point out that, he has concluded that, the disputed signature and specimen of signatures including· that, of the Defendant signed on the Transfer of Right of occupancy, provided to him for_ examination, and found are similar, and were signed by the same . hand. It seerns to me that, · PW4 relying on the details of Exhibit P6 - _ ~ states that, David Mahende, the Defendant, is one, and same person, who signed Transfer of Shares Form dated 15/9/2000, and Board Resolution dated 15/9/2000. Further, PW4 said he even made "Photographic Enlargements" of disputed signature of the Defendants on the Board Resolution and Transfer of share Form, and other specimen of the Defendant like the one which was on Transfer of Right of Occupancy Agreement on Plot No 570 dated 14/3/2006 signed by defendant in the normal course ·and compared he was of the opinion that, the disputed signature arid specimen of signatures provided to him _for examination are similar and were signed by one and same hand of David

Mahende. ; ! Page \.9 0£25 . .. . . , . . II ,,, .. , . ""·'. ;..' '. .> _': .'. -:~: ,> ,, ": a · ,,. ··:.. · .• ~> · · i,, " · ,. :,,,<," ·· ,· . ·., , . ·. · • . • · • · • · •\H0nestly,. 'I find· the. tes1:t111ony .·•Of;, ,p.4 ·that; · his ~,,er;im1nati9n§~~f!V/' , ·, · using " 'a Moderd Microscope·s ,: VSV 6000 Video Spectral comparatQr'' , arid ',ipfiOtb~taPfiic enlargements", le9d to the eJncl~sion th~t, the; · disputed signatures'on the Minutes of BOard Reso1Jtioh and Transfer forms belong to David Mahena'e that,, supports an~ gtes crederire•~ to the testimonies of PWl , .PW2 )and PW3 th~t, !they saw the Defendant signing the Minutes of Bo~rd Resolution a~reeing to sale · and transfer of shares, and Defenda~t signed trarisfJr form. In view of such evidence, the jourt is persuaLd that, the tetblllOnieS of,'PWl, PW2 and PW3 ar~ more convinci~g, arid credible , compared to denial made by the DE:!fendant and th~ testimony of DW2. . I. ' • ' I The Defendant, and DW2, did not give tangible rdaslns to fault the ,. ·. I I . . . I . testimonies of PW1, PW2 PW3 on t~e sale and tramsfer of shares which was done by the Defendant. :.. ... More, the court finds if at all the Defendant who was the shareholder :a~d director of the AfrF Scan. Const~uction Co was of the strong views that, his_ sh~res were ~nfa1rly. solf, ~hen, he would have taken legal steps and file an apphcat1on m e0uJ

to contest the • • I sale of shares in order to invalidate it . . -- ·. Page 20. of 25 It seems to -me thatvhis persistenc~ and consistence silence on his 10 shares a_lleged to have been sold for .a decade, suggests that, · ·· though is defending himself that, he did n"ot sign the Resolution on sale of shares, but he never contested it in collrt to invalidate sale or · transfer of shares which appears in Exhibits P3 and P6. Turning to the Defendants legal argument on restriction on the sale and transfer of share to s~areholder alone, honestly I find it is true Section 27(1) (b) of the Companies Act Cap 212 and Article 4 (a) to ( c) of _E~hibit Pl- Articles of Association of the Afri -Scan Company Ltd, the sale, and transfer of shares is restricted to shareholders, in the sense that, they must be give the first right refusal to buy shares to shareholders, before an outside like Afri -scan Group. But it is important to state that, "restriction on sale of share is just a control, and " is not a "bar" or "prohibition" on transfer of share to an outsider like the Afriscan Group. In view of the above, it seems to me that, since the Plaintiff's . . Company purchased 10 · share from the Defendant who was the owner of the said shares, and none ofother shareholders who were . . . at the Board Meeting put to the Plaintiff a notice of restriction on sale of shares, that suggest, none of

shareholder was willing to buy the said shares or protested by putting to the attention of the Plaintiff the said restriction, and notice on sale of shares. ' ' ' Page 21 of 25 ~ .i • . ,.,. '.o ;; ,''-,,• .. ,) ,:;', ·. ·h In ·the abs~~~e ~f cr~dib1e evidE!nC~· t~at/ttiere Was a prior notice On . • · ")·' • • I . ', ,,,: ' '' ' ' I,··,,,·,''.;._ ' ,I. • restrictions.· of ··sale of· shares addressed' ·i ,. . . . ': t6 the PlaTntiff, ., or .proof of· , , . I .. . misrepres~htltion on sale of shares, !I find the Plai~tiff was a "bona · • ••. I'i. ·;·'r,':· I . . ·' fide purchaser" of those shares. Th~ term "bona fid~" purchaser is I defined in ·Black's Law Dictionary as foillows that:- one who has purchased prbperty for value without any notice of any defects· in the title of th~ seller; and/or one / who pays valuable consideration, has no notice; of outstanding rights of others and acts in good faith, [at page 121 of the Abridged sixth editioh (1991 I! I I . In view of the above, it seems to me[ that, a bona fidr. purchase; his purchase remains valid and bindin@ until and unless the said sale and transfer is set aside by the c:ou~ or Tribunal. Sihce there is no such an order which invalidates thJ Plaintiff sai'e, 1nd transfer of Ii I shares, I have no reasons to doubt ~hat there was sale and transfer 10 shares by the Defendant. st \ · )! '1 I, To conclude on the 1 issue, I am

sftisfied by testi onies of PWl, · . l I PW2, PW3 that, transaction;· whicti: appears in Ex~bits P3 and PS are credible and convincing to the ~oint that Defendlant · sold his 10 shares to Plaintiff and the sale and }ransfer are valid, binding, and enforceable. I . . Moving to the 2nd issue of whfther the plaintjff suffered any damages I find the Plaintiff claim for damages wds based on the Defendant's consistent and persiste~t denial on salelof shares which Page 22 of 25 ,· caused embarrassment/~arid"painted bad image and picture tq th~ Plaintiff, its• members and directors, and caused, a delay in the . . .,· ' realization. of the Award which . was. .. granted in the Arbitration: .. So I from the Plaintiff point of view that is sufficient enough for granting of damages. The court has carefully considered the. Plaintiff claim for damages and found as stated in the case of Mwalwange v. Mwalwajo 1972 HCQ No 78 where Hon Mwakasendo Ag J as then was said "It is principle of law that, there is no entitlement to damages without aproof of loss, or injury.-. Further in the case of Stanbic Tanzania Limited Versus Abercrombie & Kent (T) Limited Civil Appeal No 21 of 2001 unreported the Court of Appeal quoting from Lord ·Macnaghten in Bolag v Hutchson [195QJ A.C. 515, the court stated that, general· damages are the ones which the law will presume to· be . the . ~:Hrect, natural or

probable consequence of the action complained of. The Court went to say Damages, generally, are:- That, sum of money which will_ put the party who has been injured, or who has suffered, in the same position as he would ' . have been if he has riot sustained the wrong for which he is now getting compensation or reparation,. See Lord Black bum in · Livingstone v Rawyards Coal Co. (1850) 5 App. Cas. 25 at page 39. Also, in the case of in Victoria Laundry v Newman [1949] 2 K.B. 528 .. _ at p. 539 Asquith, C.J said "damages" are intended to put the plaintiff .., ...... .. :· , ' .·' '.' ..,, :· \ '·· .. --.·-·,, ·· ...... ....... ·•{·~: . Page 23 ?f25 . . • . :· i; '\ .. ·i~ 'the :s~me· .posittori; as faf,.ciSt:1:tfil~n~y.2~an,::Q0::S,O,,,l:l~:::if..hi$ rtg,ht~,i · •, - · lr -·:, 1 hild been observed-, ., · .,.. ·, . I .,· · · . ., . ·,b; t' .d . . . I I . 't Id .th Pl . Gui ded by th~;_.,,a ove me~ ~one pnrc1p es revlpl e a1ntiff .i i claim for damages and realized thaf is found on tr,e Poirit thilt, persistent and Consistent denial of sal~ of share or donkistent claim of . shares _by the, Defendant denied 01 obstructed the Plaintiff from ! I realization of Arbitration Award. Butl the court finds[ the so called Arbitration Award, and its contents ~ere not tenf ered in court as exhibit for cons[deration: .. In view .<1{ the abo~e, _the[court i.s le~.,in darkness on what was m favour

of fhe Plaintiff in t e Award, and what loss, or injury he has suffered as a result of the Defendant denial on the sale shares. In view bf the above:, I find claim for • • ' I ·damages was not proved. I I,, Moving to the. 3rd issue of what r:1eliefs are parti I s entitled too I I l honestly, I have said the Plaintiff evidl~nce has provedj on the balance of probability that, the Defendant sol? and transfe~rJ his 10 shares. In view of the above, I hereby declare that, the !defendant had lawfully sold, and transferred his 10! shares in a Jo~pany known as Afriscan Construction Co Ltd to the Plaintiff's Com!pa~y. Secondly on ' payment of General Damages, I have said the Arbitration Award ' '' which was the basis of the Plaintiff's claim for da~ag~s was not tendered in court as Exhibitto enabl~ the court to m~ke assessment . I' ' . I • • of damages. So, in absence of the ,!irbitration Alard! the court find ' ... Page24 of25 - and.':tfecides that/ the.-Plaintiff has failed-.to prove any loss.,.or)njury .. he had suffered. The .plaintiff therefore, has failed· to .prove ··the . . damages which he suffered and the claim fails"~ ' On the costs, honestly I find the Plaintiff has proved that, the disputed 10 shares were lawfully sold, and transferred to him. Therefore the Plaintiff is entitled to costs he incurred in pursuing the suit. Also, on interest I order that, Plaintiff will be

entitled to interests of 10% per annum from the date the suit was filed to the date of. Judgment, and 13 % interest per annum from the date of the Judgment to the date the Deer.eta! sum is paid in full. Consequently, I decide the Plaintiffs suit succeeds with costs against the Defendant as ~xplained above. The right of appeal is fully explained to the parties. th Dated at Dar es Salaam this 15 day of December, 2015 ·" H.T. SONGORO

JUDGE · Delivered at Dar es Salaam this 15th day of December, 2015 H.T. SONGORO

JUDGE . Page 25 of 25 ' ! ' ,/';•r:· ·:.Judgment, <The -_- _''.c,.: . '::,.:.:; ~~,, :was ·delwered, ,,tn ,1fl1e ,;,pr.e,~(ilpc;e I f .Ns_~i;' H1ld21" ·· , ., ·· ;t -~ , : . . ;,; ,' ' ,. ,.-, , .: '·_ • . :. _! .,, .,,, ', , . . . . Rugakunguru, -L~qrneg Adv9~~te f()f thl, e Plaintiff .,a_rd .. ~bsen~e _or !,~.e'_ .. , · " Defendant and his Counsel. 1 , ,.. · r··: .,,, · .-., '?"!' 2' ! ' >~it\~~'.- -I I