ANADOLU ANONIM TURK SIGORTA SIRKETI VS T POERT AUTHORITY COMM CASE NO
- Citation
- ANADOLU ANONIM TURK SIGORTA SIRKETI VS T POERT AUTHORITY COMM CASE NO
- Status
- Judgment
- Jurisdiction
- Tanzania
- Court
- TANZLII
- Decision
- 1 January 2023
- Posture
- Commercial Case / Ruling on Preliminary Objections
- Language
- English
More details
- Court
- TANZLII
- Decision
- 1 January 2023
- Posture
- Commercial Case / Ruling on Preliminary Objections
- Language
- English
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Plaintiff, as subrogee, is bound by the broad forum selection clause in the Bill of Lading, which covers all disputes arising out of or in connection with the Bill of Lading, including tort claims. The Tanzanian court must stay proceedings and refer the parties to the agreed forum in Germany. The preliminary objection on limitation fails as it is not a pure point of law but requires evidence.
Court disposition
Suit stayed; preliminary objection on forum upheld; costs awarded to Defendants.
Orders
- Plaintiff to institute the dispute in the appropriate German court pursuant to Clause 4 of the Bill of Lading.
- Present suit stayed pending proceedings in the agreed forum.
- Preliminary objections upheld with costs.
02
Material facts
Parties
Anadolu Anonim Turk Sigorta Sirketi
Plaintiff Counsel: Mr. Mkama KalebTanzania Ports Authority
1st Defendant Counsel: Ms. Jacqueline KinyasiAuerbach Schiffahrt GmbH & Co. KG
2nd Defendant Counsel: Maosa & Co AdvocatesThe Attorney General
3rd Defendant Counsel: Ms. Jacqueline KinyasiAmounts and remedies
- Reimbursement Claimed: USD 49,641.6
- General Damages Claimed: USD 30,000
03
Procedural history
Posture
Commercial Case / Ruling on Preliminary Objections
04
Questions and positions
Legal issues
- 01
Whether the Tanzanian court has jurisdiction in light of the forum selection clause in the Bill of Lading
- 02
Whether the Plaintiff, as subrogee, is bound by the Bill of Lading's terms
- 03
Whether the claim is time-barred under the Carriage of Goods by Sea Act
- 04
Whether the dispute should be referred to arbitration or foreign courts
Party arguments
- Applicant
- The Plaintiff argued it is not a party to the Bill of Lading and sues in tort for negligence, not contract, thus not bound by the forum selection or limitation clauses. The Plaintiff claims subrogation rights as insurer and asserts the suit is within the limitation period for tort claims.
- Respondent
- The Defendants argued that the Plaintiff, as subrogee, stands in the shoes of the insured and is bound by the Bill of Lading, including its forum selection and limitation clauses. They contend the suit should be brought in Germany under German law and is time-barred under the Carriage of Goods by Sea Act.
05
Court’s reasoning
Legal principles
- 01
Doctrine of subrogation; cited cases: Scova Engineering SPA v. Mtibwa Sugar Estates Limited, Kayanja v. New India Assurance Company Limited
A subrogee insurer stands in the shoes of the insured and is bound by the insured's contractual obligations, including forum selection clauses.
- 02
Court of Appeal of Tanzania in Sunshine Furniture Co. Ltd v. Maersk (China) Shipping Co. Ltd
Forum selection clauses in international contracts should be upheld unless strong reasons exist to the contrary.
- 03
Mukisa Biscuits Manufacturing Company LTD v West End Distributors LTD (1969) EA 696
Preliminary objections must be based on pure points of law and not on disputed facts requiring evidence.
06
Ratio, limits and disposition
Ratio decidendi
The Plaintiff, as subrogee, is bound by the broad forum selection clause in the Bill of Lading, which covers all disputes arising out of or in connection with the Bill of Lading, including tort claims. The Tanzanian court must stay proceedings and refer the parties to the agreed forum in Germany. The preliminary objection on limitation fails as it is not a pure point of law but requires evidence.
Obiter and limits
- Forum selection does not oust the court's jurisdiction but party autonomy requires courts to give effect to such agreements.
- Broadly drafted dispute resolution clauses cover both contractual and tortious claims connected to the contract.
Court disposition
Suit stayed; preliminary objection on forum upheld; costs awarded to Defendants.
- Plaintiff to institute the dispute in the appropriate German court pursuant to Clause 4 of the Bill of Lading.
- Present suit stayed pending proceedings in the agreed forum.
- Preliminary objections upheld with costs.
Source and reliance status
TANZLII · 1 January 2023
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
TANZLII
Judgment· 1 January 2023
IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION)
AT PAR ES SALAAM COMMERCIAL CASE NO 85 OF 2023
BETWEEN ANADOLU ANONIM TURK SIGORTA SIRKETI................................... PLAINTIFF
VERSUS TANZANIA PORTS AUTHORITY................................................ Ist DEFENDANT AUERBACH SCHIFFAHRT GmbH & Co. KG................................. 2nd DEFENDANT THE ATTORNEY GENERAL........................................................ 3rd DEFENDANT
RULING Date of Last Order: 05/02/ 2024 Date of Ruling: 02/08/2024 GONZI, J. The plaintiff, an Insurance Company based in Turkey, filed the present suit seeking from the 1st and 2nd Defendants USD 49,641.60 as reimbursement for the compensation it had paid to Yapi Merkezi Insaat ve Sanayi Anonim Sirket (the insured) for damage to the insured's cargo caused by the 1st and 2nd defendants' negligence. The Plaintiff is also seeking payment of USD 30,000 in general damages, interest and costs of the suit. i The Plaintiff alleged that the insured cargo was damaged during discharge at the Dar es Salaam port due to mishandling by the 1st and 2nd defendants' agents. The pleadings show that the 2nd Defendant was the carrier of the insured cargo that was to be shipped and discharged at the Dar es Salaam port owned by the 1st Defendant. The plaintiff alleged that it had insured the cargo in favour of the shipper Yapi Merkezi Insaat ve Sanayi Anonim Sirket (the insured) and that now it seeks to recover from the persons responsible for the loss the amount it paid the owner of the cargo. The 1st and 3rd defendants filed a preliminary objection, arguing that the case violates clause 4 of the Bill of Lading, which mandates that any disputes related to the Bill of lading must be resolved in Germany Courts under German Law where the carrier's business is located. The second Defendant also raised
preliminary objections that in terms of the Bill of Lading No.ISA-ANT-DAR-001, the Point of Origin is Germany and that Clause 4 of the Bill of Lading prescribes that any dispute arising from the said Bill of Lading shall be determined in accordance with the laws of Germany. The 2nd Defendant also raised an objection that the cause of 2 action by the Plaintiff is anchored on the Bill of Lading whose statutory time limit is 1 year from the date of discharge of the goods under section 6(1) and (3) of the Carriage of Goods by Sea Act, CAP164 of the Laws of Tanzania. The third preliminary objection raised by the 2nd Defendant was that the Bill of Lading prescribed Arbitration as the chosen mode of dispute settlement and not the ordinary courts. By leave of the court, the preliminary objections raised by the 1st, 2nd and 3rd Defendants were argued by way of written submissions. The 1st and 3rd Defendants had the services of Ms. Jacqueline Kinyasi, learned State Attorney. The 2nd Defendant had the services of Maosa & Co Advocates while the Plaintiff had the services of Mr. Mkama Kaleb, learned Advocate. I thank all counsel for their insightful submissions. Starting with the preliminary objection filed by the 1st and 3rd Defendants, it was submitted that clause 4 of the Bill of Lading states that: i. Dispute related to the bill of lading will be determined exclusively by the courts and
under the law of the carrier's principal place of business 3 ii. The carrier's principal place of business is Hamburg, German. Thus, any disputes will be subject to the jurisdiction. Ms. Jacqueline Kinyasi, learned Counsel argued that a Bill of Lading is a contract outlining the terms of carriage between the ship owner and the shipper. In this case, clause 4 specifies that disputes will be resolved under the German laws and courts. Section 7(1) of the Civil Procedure Code CAP 33 R.E 2019 allows parties to choose jurisdiction for their disputes. The Court of Appeal has supported the choice of forum in its decision in the case of Sunshine Furniture Co. Ltd vs. Maersk (China) Shipping Co. Ltd and Nyota Tanzania Ltd Civil appeal No. 98 of 2016 CAT at Dar Es Salaam ( Unreported at page 16 ). Ms. Kinyasi, learned Counsel submitted that the court of Appeal in Sunshine Furniture (supra) endorsed Mulla's view that courts should honor contractually chosen forum for disputes and therefore the Court of Appeal affirmed that a Bill of Lading's forum choice is binding, thereby confirming that parties can select specific forum for their disputes. Ms. Kinyasi, learned Counsel submitted further that in the case of Reliance Insurance Company (T) LTD v. CMA CGM Society Anoyme and CMA CGM (Tanzania) Limited, Civil Appeal No. 179 of 2020, the Court of Appeal at page 13 affirmed that the parties can
select a 4 litigation forum through a Bill of Lading. The learned counsel submitted that forum choice doesn't remove the court's jurisdiction. She cited the case of Scova Engineering S.P.A v. Mtibwa Sugar Estate Ltd, Civil Appeal No 133 of 2017, for that position. Ms. Kinyasi, learned counsel prayed that the case be struck out instead of being stayed, so as to allow the parties to proceed directly to the specified forum as per the terms of the Bill of Lading. She argued that striking out the case will prevent delays as any judgement from the specified forum will be treated as foreign and enforceable decision under laws of Tanzanian. She prayed for the court to sustain their Preliminary Objection with costs. Mr. Mkama Kaleb, learned Advocate for the Plaintiff filed reply submissions to the preliminary objection raised by the 1st and 3rd Defendants. He argued that a Bill of Lading is a contract between the ship owner and the shipper, defining the terms of goods carriage. This definition is also referenced in the case of Sunshine Furniture Co Ltd v. Maersk (China) Shipping Co. Ltd Civil Appeal No. 98 of 2016 (Unreported). He argued, however, that the Plaintiff was not a party to the Bill of Lading and that this suit is not founded on the Bill of Lading rather on the tort of negligence. Mr. Mkama Kaleb, learned Advocate, submitted that according to Black's Law 5 Dictionary, 10th
Edition, page 1279, "party to the contract" is defined as a person involved in a legal transaction or proceeding. This term applies to those entering into agreements, leases, or similar documents. It was the argument of Mr. Mkama Kaleb, learned Advocate for the Plaintiff that the parties identified in the Bill of Lading on page 1 thereof are Voestalpine Railway Systems GmbH as the shipper of Goods and Dship Carriers GmbH & Co .KG as the sea carrier. Neither the plaintiff nor the 1st or 3rd defendants are listed as parties in the Bill of Lading. He argued that the plaintiff not being a party to the Bill of Lading, is not bound by its terms, including the choice of law and forum. He argued that as per the prevailing legal precedents, one cannot be bound by or enforce terms of a contract to which they are not an original party. Mr. Mkama relied on the case Coface South Africa Insurance Co. Ltd v. Kamal Steel Limited, for this principle. He argued that the plaintiff, as an insurance company, insured Yapi Merkez Insaat Ve Sanayi Anonim Sirketi's Cargo. The insurance contract did not modify the Bill of Lading or create a new agreement. He stressed that under the doctrine of privity of contract, only parties to the contract have rights in it. He added that in such cases the assignee (like the Plaintiff in this case) steps into the shoes of the original party and can enforce those
rights. 6 He relied on the case of Scova Engineering SPA v. Mtibwa Sugar Estates Limited, Civil appeal No. 133 of 2017 (Unreported) where the Court of Appeal ruled that contractual clauses only bind parties to the contract, not strangers to it. He also cited the decisions by the Court of Appeal in Kayanja v. New India Assurance Company Limited [1963]] EA 295 and Tarlok Singh Nayar v. Sterling General Insurance Company Limited (1966) EA 144 to support operation of the doctrine of privity of contract. Mr. Mkama, learned Advocate, submitted that the learned counsel for the 1st and 3rd Defendants misinterpreted the Bill of Lading, thereby wrongly identifying the parties involved in it and the Plaintiff's basis for the present lawsuit. He clarified that the Plaintiff did not sue under the Bill of Lading but for negligence by the Defendants in failing to protect the insured's cargo. Mr. Mkama submitted that section 7(1) of the Civil Procedure Code [CAP. 33 R.E. 2019] grants this court jurisdiction over civil suits unless specifically barred. He distinguished the case cited by the Defendants, in Sunshine Furniture Co Ltd v. Maersk (China) Shipping Co. Ltd (supra) that it does not apply in the matter at hand because in that case parties had directly mentioned in the pleadings that the suit was founded on a Bill of Lading. 7 In conclusion, Mr. Mkama, learned Advocate argued that the
cause of action arose in Dar es Salaam where the 1st and 3rd Defendants reside and conduct their business. According to Section 18 of the Civil Procedure Code, suits can be filed where any defendant resides or carries on business, or where the cause of action arises. He submitted that the Court's jurisdiction, is conferred by statute and cannot be overridden by the parties except by explicit statutory provisions. He relied on the case of Scova Engineering v. Mtibwa Sugar (Civil Appeal No. 133 of 2017, Unreported). He prayed that the preliminary objection raised by the 1st and 3rd Defendants be dismissed with costs. A brief rejoinder from Ms. Jacqueline Kinyasi, learned State Attorney, was that although neither the Plaintiff nor the 1st and 3rd Defendants are mentioned in the Bill of Lading therefore not privy to it, the present lawsuit pertains to an insurance policy linked to the Bill of Lading. He referred to paragraph 7 of the Plaint that specifies that, the Bill of Lading holds the 2nd Defendant liable for loss or damage to the insured consignment from loading to discharge at Dar es Salaam Port. 8 Maosa & Co. Advocates filed their written submissions in support of three preliminary objections raised by the 2nd Defendant. On choice of law and forum, they submitted that Clause 4 of the Bill of Lading is unambiguous that any dispute arising from the said Bill of Lading shall
be determined in accordance with the laws of Germany through arbitration process. They submitted therefore that the court has no jurisdiction. On time limit, they submitted that Sections,3, 4 and 6(1) of the Carriage of Goods by Sea Act, CAP 164 of the Laws of Tanzania which incorporates the Hague Visby Rules, 1924 prescribe that suits on Bills of Lading should be filed within 12 months from the date of the carrier discharging the goods at the Port of destiny. They argued that according to paragraph 7 of the Plaint, the goods were discharged at the Port of Dar es Salaam on 2nd November 2020 and the present suit complaining of damage to those goods was filed on 13th July 2023 which was after the lapse of two years and six months outside the statutory period of limitation. He cited the case of CMA CGM) Tanzania) Limited versus AM Steel& Iron Mills Ltd, Commercial Case No.2 of 2014 which held that Bill of Lading is the main contract between a shipper and the carrier and which also held that the Hamburg Visby Rules 1978 are applicable to Tanzania. They also cited the 9 case of Kaycee (ING) Limited versus Prompt Shipping Corp (1986) All N.L.R 33 decided by the Supreme Court of Nigeria wherein the Court held that under the Carriage of Goods by Sea Act 1924, the carrier ship is discharged from any liabilities if the claim is not brought within a year. The learned counsel for the 2nd
Defendant prayed that the suit be dismissed with costs. Mr. Mkama Kaleb, learned Advocate for the Plaintiff, responded to the written submissions filed by the 2nd Defendants learned counsel. He argued that the present suit is not filed under the Bill of Lading but on tort. He argued that the Plaintiff is not a party to the Bill of lading contract and could not sue on it on the basis of privity to contract. He argued that the Plaintiff has a valid cause of action against the 1st and 2nd Defendants in tort. He referred to Paragraphs 5.1, 5.2 and 5.3 of the Plaint where the Plaintiff is suing on the basis of negligence so as to be reimbursed the USD 49,641.60 it had compensated the insured person. He argued that mentioning the Bill of Lading in the plaint was done solely for the purpose of showing the connectivity between the 2nd Defendant and the insured Yapi Merkezi Insaat Ve Sanayi A.S whose goods were damaged negligently by the 1st and 2nd io Defendants. He submitted that suits founded on tort of negligence have a period of limitation of 3 years and therefore the suit is not time barred. He reiterated his reply made in response to the preliminary objection raised by the 1st and 3rd Defendants that the court has jurisdiction. He prayed for the dismissal of the preliminary objections raised by the 2nd Defendant with costs. After hearing the arguments by the learned counsel for
all the parties to this case, I am now in a position to determine the preliminary objections raised whose determination has been delayed due to mix-up of the online case files and documents filed online by the parties between this case and Commercial Case No.85/2023. I will start with the preliminary objection on time limit raised by the 2nd Defendant's learned counsel. In my settled view, the preliminary objection is misplaced. The 2nd Defendant raised the preliminary objection on the assumption that the present suit was founded on the Bill of Lading as a contract regulated by the Carriage of Goods by Sea Act, which requires claims thereon to be filed in Court within one year. The Plaintiff on the other hand has been adamant that as per Paragraph 5 of the Plaint and many ii others, the cause of action is based on the tort of negligence and not contract because the plaintiff was not privy to the contract in the Form of Bill of Lading. In short, it is disputed fact between the Plaintiff and the 2nd Defendant as to whether the present suit is premised on breach of Bill of Lading as a Contract or on negligence. My decision is that so long as a fact is disputed, it cannot form basis for preliminary objection as it needs evidence to prove it one way or the other. Preliminary objections must be raised on undisputed facts on the assumption that what is pleaded by the other side is
true. Now, the Plaintiff has pleaded under Paragraph 5 of the Plaint that his claim is based on the tort of negligence. If that were to be accepted as the truth, would the 2nd Defendant still be justified to insist, by way of preliminary objection, that the suit is time barred? My answer would be in the negative. To quote the Court of Appeal for Eastern Africa in the case of Mukisa Biscuits Manufacturing Company LTD v West End Distributors LTD (1969) EA 696, at page 701, Sir Charles Newbold P., had this to say: - "A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the 12 assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or what is the exercise ofjudicial discretion." In the case at hand the Plaintiff has filed a suit attempting to make the 1st and 2nd Defendants liable for negligence towards him as an insurer who is subrogated to the would be rights of the insured person whom he has already compensated for the loss. The 2nd Defendant is arguing that the suit is (or rather should have been) one for breach of contract of Bill of Lading. So, who is correct between the two? Evidence is needed. Where evidence is needed, the issue cannot be disposed of as a preliminary objection even if it touches on matters of time limitation, cause of
action, jurisdiction or an obligation to refer the dispute to arbitration. It is not the name-tag given to the objection that matters, rather it is the nature of the objection raised. Once an issue needs evidence to be resolved, it fails the test of being a pure point of law which passes the test of self-proof. It may be a point of law but not purely so, since it involves evidence for its determination hence failing the test of self-proof. Therefore, as the preliminary objection on time limitation raised by the 2nd defendant in this matter does not qualify as a pure point of law, I dismiss it. 13 Next, I will consider two preliminary related objections with respect to forum choice and applicable law. The Defendants herein have argued that the present suit should have been filed in Germany in terms of Clause 4 of the Bill of Lading and that the governing laws should have been the laws of Germany and the 2nd Defendant added that the dispute should have also been preceded by arbitration process. The Plaintiff has argued that the suit at hand is not founded on the Bill of Lading and therefore all the terms of the Bill of Lading including Clause 4 thereof do not apply. Clause 4 of the Bill of Lading provided: "Disputes arising out of or in connection with the Bill of Lading shall be exclusively determined by Courts in accordance with the law of the place where the carrier has
principal place of business, as stated on page 1 except as provided elsewhere herein." In my view under the above Clause, the parties to the Bill of Lading, agreed on jurisdiction of the courts and application of the laws of the principal place of business of the Carrier. The parties did not agree on arbitration, contrary to the arguments by the second Defendant. In the present case, there is no dispute that the Principal place of business of the 14 Carrier is Germany. The Plaintiff has argued however, that the provisions of the Bill of Lading, including Clause 4 of the Bill of Lading, which has chosen the courts of Germany as the forum courts and the applicable laws to be those of Germany, do not apply to the Plaintiff because the claim at hand is not based on the Bill of lading to which the Plaintiff is a stranger, but rather on tort of negligence. All parties herein agree that the parties to the Bill of Lading were YAPI MERKEZIINSAAT VE SANAYI A.S (the Insured) who was the owner of the goods and the shipper and the 2nd Defendant who was the carrier of the consigned goods. I have considered the arguments by the learned counsel for the Plaintiff but I am unable to agree with him. In the first place, the Plaintiff has been clear and emphatic that the present suit is founded on the doctrine of subrogation where the Plaintiff as the insurer of YAPI MERKEZI INSAAT VE SANAYI A.S
(the Insured) stepped into the shoes of the said YAPI MERKEZI INSAAT VE SANAYI A.S (the Insured) after having paid her the insurance indemnity. By being subrogated, the Plaintiff stands in the same shoes like the said YAPI MERKEZI INSAAT VE SANAYI A.S (the Insured) with respect to the Bill of Lading and the consigned goods thereunder. The Plaintiff under the doctrine of subrogation, can only enforce those rights 15 which the Insured person YAPI MERKEZI INSAAT VE SANAYI A.S (the Insured) could have enforced against the 1st and 2nd Defendants if he was not insured. YAPI MERKEZI INSAAT VE SANAYI A.S (the Insured) could have sued for breach of contract or could have sued for the tort of negligence. The Plaintiff has stepped into the shoes of the said YAPI MERKEZI INSAAT VE SANAYI A.S (the Insured) and has opted to sue for the tort of negligence. The claim for negligence relates to and is connected with the relationship and the transaction which YAPI MERKEZI INSAAT VE SANAYI A.S (the Insured) had with the 1st and 2nd Defendants under the Bill of Lading. The Plaintiff upon being subrogated, stands in the same position, with regard to the Bill of Lading and claims incidental thereto, like the said YAPI MERKEZI INSAAT VE SANAYI A.S (the Insured) could have stood. In insurance law subrogation is the name given to the right of the insurer who has paid for a loss, to be put in the place
of the assured so that he can take advantage of any means available to the assured to extinguish or diminish the loss for which the insurer has indemnified the assured. Subrogation means substitution of one person for another. The doctrine of subrogation confers upon the insurer the right to receive the benefit of such rights and remedies as the assured has against third parties in regard to the 16 loss to the extent that the insurer has indemnified the loss and made it good. The insurer is, therefore, entitled to exercise whatever rights the assured possesses to recover to that extent, compensation for the loss. Subrogation involves transfer of right and remedies of the insured to the insurer who has indemnified the insures in respect of the loss. That is why it is said that on the payment of the claim of the insured, the insurer steps into the shoes of the insured, to claim the damages/loss caused to the property by the third parties. The Insurer therefore stepped into the shoes of the Insured and enjoyed no better remedies over what the insured himself enjoyed as against the 1st and 2nd Defendants in relation to the Bill of Lading. My second reason for not accepting the Plaintiffs arguments in this regard is that the drafting of Clause 4 of the Bill of Lading reproduced above was broad enough to cover disputes arising out of the Bill of Lading directly as well as disputes
arising indirectly in connection with the Bill of Lading. The Bill of Lading was with respect to the consigned goods of the insured person which were being transported by the 2nd Defendant and discharged at the Port of the 1st Defendant. Allegedly those goods were damaged by negligence of the 1st and 2nd Defendants. The Plaintiff has allegedly paid compensation to the insured for loss of those damaged goods and is now 17 seeking reimbursement from the 1st and 2nd Defendants in respect of the value of the same damaged goods of the insured. There is no way that a dispute touching the damaged goods of the insured could not be connected directly or indirectly with the damaged goods covered by the Bill of Lading. I find that Clause 4 of the Bill of Lading was drafted broadly in such a way that it captured disputes directly emanating from the Bill of Lading and those incidental disputes not arising directly from it but are rather connected to the Bill of Lading, like the present claim based on tortious liability in respect of the same goods covered by the same Bill of Lading. The learned author R. Doak Bishop, in his work Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas, at page 14 describes the implications of the broad-form clauses with reference to the Standard Dispute Resolution Clause under the International Chamber of Commerce
(ICC) Arbitration Rules. The clause provides: "AH disputes arising out of or in connection with the present contract shall be finally settled under the Rules ofArbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules." 18 Commenting on the scope of the above clause the learned author observed that: "This clause has been said to contain the three "key expressions"for an arbitral clause "AH disputes"... "in connection with"... "finally settled". The term "all disputes" encompasses all types of controversies, without exception. The language, "in connection with", creates a broad form clause that will cover noncontractual claims such as tort and fraud in the inducement. While "finally settled" indicates the parties intend the arbitrator's ruling to be final so a court will not try the case de novo" (underlining supplied for emphasis). Now, in the dispute resolution Clause under Clause 4 of the Bill of Lading in this case, it was agreed that: Disputes arising out of or in connection with the Bill of Lading shall be exclusively determined by Courts in accordance with the law of the place where the carrier has principal place of business, as stated on page 1 except as provided elsewhere herein." (emphasis supplied). I interpret the phrase "in connection with" which is contained in Clause 4 of the Bill of Lading as
creating a broad form clause that will cover non 19 contractual claims such as tort and fraud in the inducement. The plaintiff has argued that the present case is based on tort of negligence and not Bill of Lading contract. I hold that, nevertheless, the Claim on tort of negligence now preferred by the Plaintiff was also envisaged and captured by the broad terms of the dispute settlement clause under Clause 4 of the Bill of Lading by the use of the word "in connection with the Bill of Lading". The Plaintiff, being an assignee of the insured's rights under the doctrine of subrogation, stands in the same shoes like the insured person with respect to Clause 4 of the Bill of Lading regardless of whether he is seeking to enforce the Bill of Lading or to enforce incidental claims and remedies in connection with the Bill of Lading. The Plaintiff was supposed to file the suit in Germany Courts to be determined under the laws of Germany. That is the implication of Clause 4 of the Bill of Lading. Now that the Plaintiff has instituted the present suit in violation of the agreement on forum choice and choice of law agreed with the Defendants, what should happen? The issue is whether forum choice or choice of other mode of dispute resolution ousts the court's jurisdiction? My answer is in the negative. It is common in international trade for parties to choose the applicable law to their
contract as well as the forum to handle their dispute 20 and that forum can include an ordinary court or an arbitral tribunal. In the book by Anthony Connery, titled Manual of International Dispute Resolution, Commonwealth Secretariat (2006) at page 187 it is stated that: "Despite the increasing use of international commercial arbitration backed up by the New York Convention, litigation in the national courts is probably still the major international dispute resolution process in use. In the context of international contracts, the major problem in relation to litigation is the prospect for one of the parties of that litigation taking place in the courts of a foreign country, conducted in a foreign language and under a foreign system of law. However, litigation maybe the dispute resolution process used for a variety of reasons." It becomes apparent, therefore, that a choice of foreign court, by the parties to an agreement, as their preferred forum for dispute resolution, is perfectly justified in the same way that it can be used in arbitration proceedings. This court is therefore required to stay the proceedings and refer the parties to their chosen forum. This position can be seen in the decision of the Court of Appeal of Tanzania in Sunshine Furniture versus 21 Maersk (China) Shipping Co. Ltd and Nyota Tanzania Ltd Civil Appeal No.98 of 2016 where the Court of appeal held
that: endorse the above view by the learned author that the court in which the suit is instituted has the discretion to stay the suit once it learns of existence of an agreement between the parties to sue in a particular forum, whether foreign or not. For, it neither can dismiss the suit because it has not heard and determined it on the merits nor can it strike it out because, except for the choice of a different forum, it is otherwise competent to try the matter. The high court in the instant matter, we think, should have stayed trying the suit pending the institution and determination of the claim in the court ofRome. On that basis we vacate the dismissal order and substitute for it an order staying the suit in the High Court, Commercial Division". A similar position was taken by the Court of Appeal in Scova Engineering SPA and another Versus Mtibwa Sugar Estates Limited and 3 Others (2021). Therefore, as it is settled that there is an agreement whose terms were expressed in writing in the Bill of Lading, by virtue of which the parties chose 22 the Courts of Germany as their preferable forum for settlement of disputes emanating from their agreement, the role of this court is to uphold that agreement by keeping parties to their bargain. That, however, does not mean that this court lacks jurisdiction or that parties by their agreement have ousted the jurisdiction of this court.
It only means that whereas this court as well as the foreign court chosen by the parties, both have jurisdiction over the dispute on different grounds, the parties' own-chosen forum should be given prominence under the doctrine of party autonomy. Party autonomy has been a common principle in contract law; thus, it has been drafted into most of the international conventions in contract law as well as into domestic laws governing contracts. Party-autonomy entails, amongst others, the parties' freedom of contract to decide the contractual terms and to negotiate the terms of their contract for which they give their consents. It follows therefore, that the Court has to stay the suit and refer the parties to their agreed dispute resolution forum. In the end, I do uphold the preliminary objection on forum choice raised in this case. I order that: 23 a) The Plaintiff should institute the dispute at hand in the appropriate Court pursuant to Clause 4 of the Bill of Lading. b) Pending the processes ordered in (a) above, the present suit shall be stayed. c) The Preliminary Objections are is upheld with costs. It is so ordered. A. H. GONZI
JUDGE 02/08/2024 Ruling is delivered in Court this 2nd day of August, 2024 before Hon. Deputy Registrar J. M. Minde, in the presence of Mr. Mkama M. Kalebu, Advocate for the Plaintiff and in absence of Advocates for the Defendants.
INDE
DEPUTY REGISTRAR 02/08/2024 24
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