ALTAS YAG SU VE TARIM URUNLERIM VS OSMANLI BUILDING CENRE CO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL CASE NO. 90 OF 2022 ALTAS YAG SU VE TARIM URUNLERI GIDA INSAAT OTOMOTIVE NAKLIYAT SANAYI VE TICARET A.S..............................PLAINTIFF VERSUS OSMANLI BUILDING CENTRE COMPANY LIMITED........................................................................................ DEFENDANT JUDGMENT Date of Last Order: 03/05/2024 Date of Judgment: 16/08/2024 GONZI, J. The Plaintiff is a limited liability company incorporated under the Laws of Turkey based in Altinordu-Ordu, Turkey. The Defendant is a limited liability company incorporated under the Laws of Tanzania. The Plaintiff's case against the defendant was based on breach of contract. The Plaintiff alleged that in February 2019, the Plaintiff and the Defendant entered into an oral agreement for the purchase and export of refined sunflower oil from Altinordu-Ordu, Turkey to Dar es Salaam, Tanzania via Zanzibar whereby 33 i containers were ordered to be shipped directly to Dar es Salaam and 6 to Zanzibar. The Plaintiff alleged that on different dates, it shipped and delivered a total of 39 containers of refined sunflower oil with a total of 355,760 bottles packaged into bottles of 1 litre, 2 litres, 3 litres, 5 litres and 10 litres. It was stated that the Defendant allegedly maliciously, negligently and intentionally refused to pay the outstanding amounts which she was supposed to pay to the Plaintiff as the purchase price and shipping costs. The Defendant allegedly refused to pay for the sum of United States Dollars One Million and Four Thousand Four Hundred and Thirty point Eight (USD 1,004,430.08) even after being issued with 5 invoices as agreed. In paragraph 8 of the Plaint, the Plaintiff summed up the crux of the Plaintiff's case that: "That due to the failure of the Defendant to pay the outstanding amount due to the Plaintiff, the Plaintiff filed Civil Suit in Turkey, and it was heard and determined in favour of the Plaintiff, However, since Turkey is not among the commonwealth countries the said judgment cannot be executed in Tanzania hence this suit. Copy of the Judgment and Decree from Turkey High Court dated 3Cfh August 2021 is hereby annexed and marked as annexture P-03, 2 leave is craved to Honourable Court to refer it as part of this Plaint." The Plaintiff ended in his Plaint by praying for Judgment and Decree against the Defendant for orders that: (a) An Order that the Defendant to pay her outstanding dues of United States Dollars One Million Four Thousand Four Hundred- and Thirty- point Eight (USD 1,004,430.08) payable to the Plaintiff. (b) An order against the Defendant to pay running costs of loss sustained by the Plaintiff from 25th February 2019 to 27th May 2019. (c) Payment of interest at 12% of the Court rate on the decretal sum from the date of Judgment to the date of final payment. (d) Costs of the suit be borne by the Defendant; and (e) Any other order(s)/ reiief(s) that this Honourable Court deemsjust and equitable to grant. The Defendant in the Written Statement of Defence admitted the delivery of the 39 containers of refined sunflower oil from Altinordu-Ordu Turkey to Dar es salaam Tanzania; but stated that upon delivery, the same were received by Equity Agencies Company Limited, a clearing and 3 forwarding company engaged by the Plaintiff to receive the containers. The Defendant said that upon being cleared at the Port, 29 of the said containers were delivered to Dogan Aydm, Mustapha Demetgul and Batuhan Tashan who were employees of the Plaintiff, and not of the Defendant, while 10 containers were confiscated and sold by the Government of the United Republic of Tanzania for failure by the Plaintiff to pay the required taxes and costs prior to clearance from Customs. The defendant stated that it only facilitated the Plaintiff by providing bank accounts through which funds for payment of taxes, costs and other expenses in respect of the imported goods would be paid by the Plaintiff. The Defendant stated that the same dispute was the subject of a criminal case in Turkey where the Plaintiff instituted a criminal case against the Defendant claiming for among others, fraud, breach of contract and compensation in terms of the contractual agreement dated 21st June 2019. The Criminal Case was titled Criminal Court of Peace Case No.2021/3932 whose decision was given on 4th July 2022 and that the Court ruled in favour of the Defendant. On an appeal, the 2nd Criminal Court of Peace upheld the trial Court's decision thereby holding the Defendant not liable for any losses incurred by the Plaintiff in respect of the contract. 4 In the Reply to the Written Statement of Defence, the Plaintiff stated that the Claim now pursued in Tanzania was earlier on filed in Turkey as a Civil Case Number 2020/5444 E with the Baillif's Office No.5 of Ankara, Turkey, where the debt was finalized and collection process was started but that the Defendant did not have assets in Turkey so the debt could not be collected. The Plaintiff further stated that the Plaintiff and the Defendant were in the process to establish COTANAK FOOD AND COOKING OIL INDUSTRY LIMITED, but the company was not incorporated or operationalized. The Plaintiff refuted the allegations of delivering the refined sunflower oil to other persons apart from the Defendant. The Plaintiff also refuted the allegations of confiscation and sale of 10 containers by the government of Tanzania at the Port. The Plaintiff stated that on 26th November 2019, it received an SDL Certificate from Tanzania Revenue Authority Domestic Revenue Department showing that tax had been paid for the last 10 containers of Sunflower seed oil and that the 10 containers would be received by the Defendant. The Plaintiff reiterated the claims in the plaint. During the Final Pretrial Conference that was held on 29th November 2023, the following issues were framed by the Court after deliberations with the learned counsel for both parties: 5 1. Whether or not there was a contract between the Plaintiff and the Defendant for the purchase and export of refined sunflower oil from Turkey to Tanzania via Zanzibar and Dar es Salaam? \ 2. If the first issue is answered in the affirmative, what were the terms of the said contract? 3, If the 1st and second issues are answered in the affirmative, whether the parties performed their contractual obligations? 4. To what reliefs are parties entitled? The Plaintiff brought one Witness Mr. Ugur Altas (PW1), a board Member the Plaintiff Company. He filed his witness statement and attended the court for cross examination. The Defendant brought two witnesses Felix Mbore (DW1) and Ramzan Turkmen (DW2). DW 1 is a Clearing Officer at Equity Agencies Company Limited while DW 2 is the Director of the Defendant Company. The Plaintiff tendered in Court Exhibit Pl which were Invoices issued by the Plaintiff to the Defendant. Exhibit P2 tendered by the Plaintiff was the Execution Proceedings in Turkey. The Defendant tendered Exhibit DI which was a contract dated 21st June 2019. Exhibit D2 was Bank Statements of the Defendant Company and Exhibit D3 was a decision of Turkish Court in criminal case. 6 Exhibit Pl Collectively is made up of Commercial Invoices for Cash against goods issued by the Plaintiff to the Defendant for refined sunflower oil. The Invoice dated 25th February 2019 is for USD 70,837.00; the Invoice of 21st March 2019 is for USD 242,705.50; the Invoice of 16th March 2019 is for USD 246,700.30; the Invoice of 27th April 2019 is for USD 261,792.80 and the Invoice of 27th May 2019 is for USD182,395.20. Exhibit P2 is a paperwork showing "Payment Order without Judgment" dated 5th August 2021 issued by the 5th Enforcement Office in Ankara Turkey in favour of the Plaintiff against the Defendant. The Defendant was ordered to pay the Plaintiff USD 1,574,479.80 within 7 days. In the witness statement, PW1 Ugur Altas, testified that an oral agreement between the Plaintiff and the Defendant for purchase of refined sunflower oil was made in 2019. He testified that the Plaintiff fulfilled its contractual obligations by shipping and delivering the 39 containers with 355,760 bottles of refined sunflower oil from Turkey to Zanzibar and Dar es Salaam ports. He testified that the Defendant, upon taking delivery, refused to pay despite being issued with several invoices. He testified that upon failure by the Defendant to pay, the Plaintiff instituted a civil case against the Defendant in Turkey and the Plaintiff won that case. He testified that direct enforcement 7 in Tanzania of the Judgment given by the High Court of Turkey was not possible as Turkey is not a commonwealth country and therefore, the present was filed. DW1 Ramzan Turkmen testified in his witness statement that the Defendant and the Plaintiff never entered into any oral agreement in respect of purchase and export of refined sunflower oil from Turkey to Dar es Salaam. He testified that the only agreement the Defendant had with the Plaintiff is that of 21st June 2019 for operations and shareholding structure of the then envisaged KOTANAK Foods and Cooking Oil Industry Limited, a company to be established in Tanzania. He testified that the terms and conditions between the Plaintiff and the Defendant with respect to KOTANAK Foods and Cooking Oil Industry Limited were expressly written. He testified that the aim of that agreement was to establish dealership for the Defendant to market and sell the Plaintiff's products in Tanzania and East African countries. He testified that the obligation to sell the Plaintiff's products and send the money back to Turkey was assigned to COTANAK Foods and Cooking Oil Industry Limited which was to be established. However, the Plaintiff hurriedly delivered her products to the Tanzanian Market prior to the establishment of the envisaged COTANAK Foods and Cooking Oil Industry 8 Limited could be established. It was further testified for the defendant that the Plaintiff exported her products through the Defendant's name and the Plaintiff's employees namely Dogan Aydm, Mustafa Demetgul and Batuhan Tashan were responsible for distribution and selling of the Plaintiff's products in accordance with the instructions of the Plaintiff. He testified that the Plaintiff's refined oil was cleared by Equity Agencies Company Limited who handed it over to the above-named Plaintiff's officers who were never employees of the Defendant Company. He testified that 10 containers were confiscated and sold by the Government of Tanzania upon failure by the Plaintiff to pay taxes. He testified that the Defendant only facilitated the transfer of funds from the Plaintiff to the Defendant for purpose of paying taxes and related costs and expenses for the Plaintiff's imported products. He testified that the Plaintiff instituted a criminal case in Turkey on the same cause of action against Officials of the Defendant Company including DW 1 for fraud, breach of contract and compensation but that the Defendant's officials won it. He testified that the case in Turkey was Criminal Court of Peace Case No.2021/3932 dated 4th July 2022 and that judgment was delivered in favour of the Defendant. The Plaintiff appealed to the 2nd Criminal Court of Peace in Turkey where the decision of the lower court was 9 upheld, in favour of the Defendant's officials. He testified that the Defendant was never notified or summoned in any civil proceedings or case in Turkey allegedly opened by the Plaintiff against the Defendant as alleged or at all. Final submissions for the Plaintiff were written by Mr. Elisante Frank, learned Advocate while for the Defendant were written by Mr. Malick Khatib Hamza, learned Advocate. I thank learned counsel for both sides for their closing submissions which I will take onboard in the course of my decision. Like it has been stated herein, during the Final Pretrial Conference, the court, after engaging the learned counsel for the Plaintiff and the Defendant, framed the following issues for determination: 1, Whether there is a valid contract for export of refined sunflower oil between the parties. 2. If the first issue is answered in the affirmative, what are the terms? As per the invoices. 3. If the second issue is answered in the affirmative whether parties performed their obligations. 4. To what reliefs are parties entitled? I will start with the first issue which is whether or not there is a valid contract for export of refined sunflower oil between the parties. Now, the io nature of the Plaintiff's suit needs be put in its proper perspective first before answering the framed issue. Under paragraph 8 of the Plaint, the Plaintiff pleaded the relevant facts that: " That due to the failure of the Defendant to pay the outstanding amount due to the Plaintiff the Plaintiff filed Civil Suit in Turkey, and it was heard and determined in favour of the Plaintiff. However, since Turkey is not among the commonwealth countries the said judgment cannot be executed in Tanzania hence this suit. Copy of the Judgment and Decree from Turkey High Court dated 3(fh August 2021 is hereby annexed and marked as annexture P-03, leave is craved to Honourable Court to refer it as part of this Plaint." The content of paragraph 8 of the Plaint was brought in Court as evidence during the testimony of PW1 through his Witness Statement. It was testified under the Plaintiff's only witness that: "The Plaintiff instituted a civil case against the Defendant in Turkey and won that case but enforcement of the Judgment in Tanzania is not possible as Turkey is not a commonwealth country and therefore the present suit has been filed." ii During the oral testimonies in the course of hearing of this case, annexture P-03 to the Plaint was tendered by the Plaintiff and admitted in Court as Exhibit P2. Its heading shows that it is a "Preliminary Proceedings Finalization Report." It was issued by the 5th Enforcement Office, Republic of Turkey in Ankara on 10th September 2021. It contains "Payment Order without Judgment", the Order directs the Defendant to deposit the debt and follow-up expenses amounting to USD 1,574,479.80 in favour of the Plaintiff in the Bank Account of the Enforcement Office within 7 days of the Order. From the foregoing pleading and testimony of the Plaintiff, it is settled that this suit is intended to enforce a foreign Judgment of the High Court of Turkey allegedly passed on 30th August 2021 against the Defendant. In that regard, the issue of existence of the contract between the parties herein is expected to be evidenced by a conclusive foreign Judgment on that aspect. If there is a foreign Judgment passed on the same issues which are now subject of this suit, then this Court doesn't have to re-litigate the same issues. The Plaintiff is required to bring an action on a debt emanating from the foreign judgment so as to hold the Defendant liable to fulfil her obligation 12 under the foreign Judgment that conclusively decided the issue of existence and breach of contract as well as the remedies thereon. In WILLOW INVESTMENT v MBOMBA NTUMBA AND ANOTHER (1996) TLR 377 (HC), it was held: "The provisions of Cap 8 were inapplicable. This however did not imply that the Court lacked jurisdiction to enforce ajudgmentgiven in Zaire. The Court's jurisdiction to enforce judgments given in foreign countries emanated from statutory law, common law and treaties. In the absence ofany such written law and treaty in relation to Zaire, judgments of that country were enforceable at common law in Tanzania on what had come to be known as the doctrine of obligation. A judgment creditor who sought to enforce a foreign judgment at common law could not do so by direct execution of the judgment: enforcement had to be sought by bringing an action on the debt" (underlining supplied) The Plaintiff in this case has been consistent in his plaint as well as in his testimony through the Witness Statement and the Exhibit P2 tendered by the Plaintiff, that the suit at hand is one seeking to enforce her Judgment debt which has already been adjudged by the High Court of Turkey in Ankara 13 which was tendered as Exhibit P2. Explaining more on the enforcement of foreign Judgments originating from states with which Tanzania does not have treaty arrangement for reciprocal enforcement, this Court (Hon. Mapigano,J.) in WILLOW INVESTMENT v MBOMBA NTUMBA AND ANOTHER held that: "I must agree that the provisions of Cap 8 are inapplicable. That does not, however, imply that this Court lacks jurisdiction to enforce a judgment given in Zaire. The effect of s 8 of the Ordinance to which my attention has been drawn is merely that where a judgment is capable of registration under the Ordinance the judgment creditor is barred from instituting any other kind of proceeding for its enforcement, such as an action upon the judgment or a suit on the original cause of action. The jurisdiction of this Court to enforce judgments given in foreign countries emanates from statutory law, common law and treaties. In the absence ofany such written law and treaty in relation to Zaire, judgments given in that country are, I think, enforceable at common law in Tanganyika on what has become to be known as the doctrine of obligation. In accordance with that doctrine, where 14 a foreign court of competent jurisdiction has adjudicated a certain sum to be due from one person to another, the liability to pay that sum becomes a legal obligation that is recognised and enforceable in Tanganyika. The foreign judgment is strictly not enforceable as such, but is to be regarded as creating a simple contract debt enforceable by an action of debt. Once the judgment is proved, the burden would He on the judgment debtor to show cause why he should not perform the obligation. This is consistent with s 11 of the Civil Procedure Code. It follows that a judgment creditor who seeks to enforce a foreign judgment at common law cannot do so by direct execution of the judgment. Enforcement must be sought by bringing an action on the debt. The procedure obtaining in England would serve as a model. The evidence would be on affidavit and the defendant should be given proper opportunity of showing cause why the foreign judgment should not be recognised or enforced. If a decree is ultimately passed in favour of the plaintiff, he may proceed to execute it in Tanganyika in the manner provided by the Civil Procedure Code." Taking cue from the above quoted passage to which I fully subscribe, I find that, essentially, the Plaintiff in the present case was supposed to 15 prove existence of a valid and conclusive foreign Judgment issued by the High Court in Turkey. That proof would help the Court to answer the first issue on existence of a valid contract between the Plaintiff and the Defendant. Proof of the existence of a valid foreign judgment issued by a competent court in Turkey which has created an obligation for the Defendant to pay the Plaintiff the decretal sum therein would have answered the first issue in the affirmative. The Defendant through DW 1 denied vehemently to have ever been involved in a civil suit against the Plaintiff in Turkey with respect to the present matters in dispute. The Defendant was adamant that the only court cases he was involved in were criminal cases and that the Defendant won the same at the trial and appellate courts levels. The Plaintiff has tendered annexture P2 as evidence of that foreign Judgment. I have gone through the entire Exhibit P2 which is said to be a Judgment from the High Court of Turkey, but I have found that the same is not a Judgment or decision of any court. It does not even purport to be one rather it explicitly negates the allegations of it being a Judgment of any court in Turkey. The purported Foreign Judgment, expressly states that it is a "Preliminary Proceedings Finalization Report". It is a "preliminary report" 16 issued on 10th September 2021 by the 5th Enforcement Office, in Ankara, the Republic of Turkey. It is a "Payment Order without Judgment". On the other hand, I have seen exhibit D3 tendered by the Defendant. It is issued by Judge Gizem Benal Berk of the TR ORDU, 2nd Criminal Court of Peace on 14th October 2022 in "Different Affairs Judgment". It dismissed the appeal from the decision of the court of first instance which had also dismissed an appeal against the decision of the Chief Prosecutor's office of Turkey who had rejected the Plaintiff's move to prosecute the Defendant's Directors including DW1 herein. The Chief prosecutor had rejected to initiate criminal charges against DW1 and others following "complaints of fraud of merchant or company managers and cooperative Managers" which had been lodged by PW1 in relation to the same matters which form the subject of the present case. After narrating all the testimonies of witnesses and the investigations done by the Republic, the Chief Prosecutor issued his decision on 04/07/2022 to the effect that: "there is no ground for prosecution on behalf of the public, complainants should seek their rights in civil courts." The Plaintiff appealed twice against that decision of the Chief Prosecutor, but in vain. It must be noted that the Plaintiff has alleged in paragraph 8 of the Plaint that the Judgment and Decree from Turkey High 17 Court upon which the present suit is founded was delivered on 30th August 2021. However, Exhibit D3 shows that the decision of the Chief Prosecutor refusing to institute criminal charges against the Defendants Director (DW1) was issued subsequent to that date on 04/07/2022. The Chief Prosecutor in his decision directed the complainants to seek their rights in civil courts. This means that by that time there was no civil suit instituted by the Plaintiff against the Defendant, that is why the Chief Prosecutor was advising the Plaintiff to institute civil proceedings. The Plaintiff appealed twice against that decision of the Chief Prosecutor up to 14th October 2022. It is inconceivable therefore that the Plaintiff in the Plaint and Witness Statement went ahead and alleged that that there is a Judgment dated 30th August 2021 by the High Court of Turkey creating an obligation for the Defendant to pay the Plaintiff. At any rate the Plaintiff did not attach any such Judgment to the Plaint. The Plaintiff did not tender any such Judgment and or Decree throughout the proceedings. What the Plaintiff tendered as Exhibit P2 is a proof that the Plaintiff was trying to enforce a debt "without Judgment". Exhibit P2 cements the fact that there is no foreign Judgment upon which the present suit is based. As the suit is based on debt obligation emanating from a foreign Judgment, the Plaintiff ought to have tendered in Court the 18 foreign judgment so as to prove his claim founded on the doctrine of obligation on the part of the Defendant to fulfil her obligations under the judgment debt. Rather than proving existence of the foreign Judgment as he alleged in the Plaint and testified through his Witness Statement, the Plaintiff resorted to attempting to establish afresh his claims of breach of contract which he had already stated in the witness statement and the Plaint that there exists a decision of the High Court of Turkey in respect thereof. Should the Plaintiff be allowed to shift the goal posts and peg his case on facts other than what was stated in the pleadings and witness statement? My answer is in the negative since parties are bound by their pleadings. In the case of THE NATIONAL INSURANCE CORPORATION vs. SEKULU CONSTRUCTION COMPANY (1986), TLR CA 157. The Court of Appeal was categorical that: "Parties to dispute are not, during hearing, allowed to depart from pleadings by adducing evidence which is extraneous to the pleadings." In the case GANDY vs. GASPAR AIR CHARTERS LTD (23 E.A.C.A.) 139 Sinclair, V.P. had the following to say at page 140:- 19 "The object of pleadings is, of course, to secure that both parties shall know what are points in issue between them, so that each may have full information of the case he has to meet and prepare his evidence to support his own case or to meet that of his opponent. As a rule, relief not founded on the pleadings will not be given." In the case at hand, I find that the Plaintiff in her pleading and witness statement has been insistent and consistent that the Plaintiff had instituted a civil case against the Defendant in Turkey and had won that case on 30th August 2021 but direct enforcement of the Judgment in Tanzania was not possible as Turkey is not a commonwealth country, and, therefore, the present suit has been filed. The first issue as to whether or not there exists a valid contract between the Plaintiff and the Defendant, was supposed to be answered by the Plaintiff bringing to court the conclusive foreign judgment that found existence of a valid agreement between the parties, breached by the Defendant, occasioning damages to the Plaintiff hence Creating the debt obligation on the part of the Defendant towards the Plaintiff. The foreign judgment was the one needed to create a simple contract debt enforceable by an action of debt. Enforcement was supposed to be done by the Plaintiff bringing an action on the debt. The Plaintiff failed 20 to do so. If the Plaintiff was not truthful in his pleading and witness statement made under oath, on existence of the foreign judgment, the Plaintiff cannot expect to be trusted in respect of other pieces of evidence. It is the law. Instead of bringing the alleged foreign judgment to prove existence of the debt obligation, the Plaintiff attempted to restart afresh an exercise attempting to prove the existence of the said contract. That was not proper approach as litigation should come to an end. The Plaintiff had no proof of existence of a valid agreement with the Defendant as alleged apart from alleging existence of an oral agreement. Even existence of the oral agreement was not proved on the balance of probabilities. The invoices allegedly issued by the Plaintiff to the Defendant are not supported by delivery orders evidencing delivery of the refined cooking oil to the Defendant. There is no proof of corresponding payments by the Defendant. The sums which the Defendant appears to have made to the Plaintiff as per Exhibit D 2, a bank statement of the Defendant, do not match the amounts or dates of the invoices. The Defendant has explained out the reason for making those financial transactions with the Plaintiff in relation to their then envisaged joint company known as Cotanak Company Limited. There is no 21 proof that the invoices were received by the defendant. They are not signed or anyhow acknowledged by the Defendant. In the case of AMI Tanzania Limited versus Prosper Joseph Msele, Civil Appeal No. 159 of 2020 where at page 15 the Court defined a Pro Forma Invoice as: "Invoice is defined as a document or electronic statement stating the items sold and the amount payable, it is also called a bill. Invoicing is when invoices are produced and sent to customers. It is used to communicate to a buyer specific items, price and quantities they have delivered and how must be paid for by the buyer. Payment terms will usually accompany the billing information- see definitions us legal terms.com. Therefore, according to this definition, an invoice is a statement sent to the customer describing the quantity and price specific items for payment". The existence of invoices alone without proof of their being received by the other party; and without existence of any delivery order or proof of payment thereon, is not a conclusive proof of existence of the alleged oral contractual, relationship between the Plaintiff and the Defendant herein. I therefore answer the first issue in the negative. Based on the evidence 22 tendered, I find that there is no valid contract for export of refined sunflower oil between the parties. The second and third issues were framed contingently depending on if the first issue would be answered in the affirmative. As the first issue has been answered in the negative, the second and third issues lose relevance to this case. Their fate follows the fate of the first issue already answered against the Plaintiff. The last issue was what reliefs are the parties entitled to? As prayed by the Defendants learned Counsel, the suit is hereby dismissed with costs. It is so ordered. A. H. GO JUDGE 16/08/2024 Judgment is delivered in court this 16th day of August, 2024 in the presence of Mr. Elisante Frank, Advocate for the Plaintiff and Ms. Asha Nganogera, Advocate for the Defendant. 16/08/2024 23