ATTORNEY GENERAL VS BONANZA VIETNAM COMM CASE NO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 35 OF 2018 ATTORNEY GENERAL ..... PLAINTIFF Versus BONANZA VIETNAM COMPANY LIMITED ..... DEFENDANT RULING 24/07/2018 & 27/08/2018 SEHEL, J. The Attorney General has filed a suit against the above named defendant claiming for declaratory orders that the defendant breached the contract for supply of 693MT out of 3,000MT Makonde Sulphur 99% Dust plus 144MT out of 2307MT received which were found to be underweight. It is alleged by the Attorney General that on 1 6th February, 2012 the Cashewnut Industry Development Trust Fund (hereinafter referred i to as “the CIDTF") floated a tender No.ME012/2011/2012-CIDTF/P/04 for supply of 5000MT Sulphur Dust which the defendant was awarded two contracts one for supply of 1000MT and the other one for 4000MT thus making a total of 5000MT. The terms of the agreements are such that the goods are to be delivered to Mtwara within 14 days after signing of contract, that is, to be delivered by 30th June, 2012. It is further alleged that following the signing of the two contracts, CIDTF made an advanced payment of Tshs. 1,920,000,000/= to the defendant to enable the defendant to make the order. It is the allegation of the Plaintiff that until 10th September, 2012 the defendant declared to have delivered the goods at Dar es Salaam a total of 3000MT out of 5000MT. It is further stated in the plaint that the goods delivered were packed in 45kg instead of 25kg as agreed thus the defendant was ordered to re-bag the goods into 25kg and deliver the same to Mtwara. Upon being ordered to re­ bag and transport the goods to Mtwara, the defendant complained of financial difficulties and requested for payment for 1000MT which 2 request was honoured as such the paid money made the total amount paid covered 3000MT. It is turther alleged that on 15th October, 2012 CIDTF advertised another tender No. ME012/2012-2013/CIDTF/G/01 for supply of sulphur 99% Dust for the farming season 2013/2014 of which the defendant applied and was awarded a tender for supply of 2000MT. The defendant signed another contract on 2nd January, 2013 for supply of 2000MT of Makonde Sulphur 99% Dust for the value of Tshs. 2,400,000,000/= thus making the total tonnage of Sulphur to be delivered to Mtwara by the defendant under the three contracts were 5000MT. It is stated in the plaint that upon delivery, counting and verification, it was discovered that only 2,307MT of goods were received at Mtwara as opposed to 3000MT whereby 693MT were missing. It is further stated that the re-bagged goods received were found to be underweight to the tune of 144MT. The total value of the undelivered and underweight Mteric Tonnes is Tshs. 803,520,000/=. From the plaint, it is this amount that is being claimed by the plaintiff 3^ 3 as the value of the undelivered goods and underweight Metric Tonnes together with liquidated damages of 10% for delayed delivery of 5000MT and 2000MT valued at Tshs. 480,000,000/= and Tshs. 240,000,000/= respectively making the total of Tshs. 720,000,000/=. The plaintiff also claims for general damages; interests at commercial rate of 31% and court's rate of 12% plus costs of the suit. The defendant after being served with the plaint and summons filed its written statement of defence where it raised points in limine. The points of law raised are: 1. That the plaintiff has no cause of action against the defendant as the contracts which the plaintiff is seeking to rely on were signed and executed by distinct legal person; 2. The present suit is res judicata as the rights of the parties in the transactions were finally and conclusively determined by this Court in Commercial Case No. 108 of 2013; and 4 3. This Court lacks jurisdiction to entertain this suit as the present claim is the subject of Civil Revision No. 270 of 2015 initiated by the plaintiff which is still before the Court of Appeal and waiting its determination and a Notice of Appeal lodged by the Cashewnut Industry Development Trust Fund against the ruling of this Court in Commercial Case No. 108 of 2013. The preliminary objections were heard orally on 24th day of July, 2018. Prior to the holding of the oral hearing, the Attorney General complied with Rule 64 of the High Court (Commercial Division) Procedure Rules GN 250 of 2012 (hereafter referred to as “the Rules") by filing skeleton arguments which she adopted during oral submissions. At the oral hearing, learned Senior State Attorney Paul Shaidi appeared to represent the plaintiff while learned advocate Novatus Muhango appeared to represent the defendant. Counsel Muhango began his submission on the second preliminary objection that the suit is res judicata as the matters arising from this suit were fully determined in Commercial Case No. c 108 of 2013. He based his submission to Section 9 of the Civil Procedure Act, Cap. 33 (hereinafter referred to as the CPC). He said in Commercial Case No. 108 of 2013 the plaintiff was Hammers Incorporation Co. Limited now known as Bonanza Vietnam, which is also acknowledged by the plaintiff herein under Paragraph 2 of the plaint, sued CIDTF for an order of specific performance of the contract for supply of 2000MT of sulphur for the value of Tshs. 2,400,000,000/= and that there were several contracts including the current one which was entered on 20th January, 2013 in which the current defendant did supply the said 2000MT of sulphur but CIDTF did not pay the whole amount, instead it decided to deduct Tshs. 803,520,000/= for allegation of undelivered and underweight of sulphur of 2000MT. The counsel argued CIDTF did not file their defence and this Court entered default judgment against CIDTF. Counsel Muhango further submitted that in the present suit, the Attorney General has brought this suit on the same facts which arose from the contract between the current defendant and CIDTF. He said the Attorney General is claiming for payment of Tshs. 6 803,520,000/= for undelivered and underweight metric tonnes. He pointed out that reading Paragraphs 29 to 39 of the plaint, they contain similar facts in Commercial Case No. 108 of 2013. He thus concluded his submissions by arguing that the Attorney General is bound by the principle of res judicata. He said though he was not a party in the suit but he had interest as held in Peniel Lotta Vs Gabriel Tanaki and Others [2003] T.L.R 312. The counsel for the defendant therefore prayed for the suit to be dismissed with costs. In reply, it was the position of the Senior State Attorney that the subject matter of the two suits are different thus the principle of res judicata does not apply. He pointed out that in Commercial Case No. 108 of 2013 the subject matter was the payment of balance in contract originate from tender number ME012/2012- 2013/CIDTF/G/01 while in the present suit as per Paragraphs 12 and 13 of the plaint, the plaintiff is claiming the said money originate from the contract number ME012/2011/2012-CIDTF/P/04. Therefore to him these are separate contracts of which the plaintiff is suing from. 7 It was rejoined by counsel Muhango by insisting that the previous contracts were fully performed but CIDTF decided to set off the claim under the contracts that were fully performed. The counsel invited the Court to scrutinize the amount claimed and the one contained in Commercial Case No. 108 of 2013. From the submissions made by the counsels it is not disputed that Section 9 of the CPC bars the trial of the suit or an issue in which the matter directly and substantially in issue has already been adjudicated upon in a previous suit. Section 9 of the CPC provides: “No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit on which such issue has been subsequently raised 8 It follows from the above provision of the law that for the matter to be considered as res judicata the following conditions must be satisfied: 1. The matter directly and substantially in issue in the subsequent suit or issue must be the same matter which was directly and substantially in issue in the former suit; 2. The parties must have litigated under the same title in the former suit; 3. The court which decided the former suit must be a court competent to try the subsequent suit or the suit in which such issue is subsequent raised; and 4. The matter directly and substantially in issue in the subsequent suit must have been heard and finally decided by the court in the first suit. (See also the case of Gerard Chuchura Vs. Rector, Haga Seminary [2002] T.L.R 313.) 9 It should be noted herein that the plaintiff’s defence is that the subject matter of the two suits are different. This means that the learned Senior State Attorney had no issue with other requirements of the law. As such the Court will have to determine on the question whether the matter(s) in Commercial Case No. 108 of 2013 is/are directly and substantially in issue with the present suit. I have exhibited herein the reliefs claimed by the plaintiff in the present suit. Amongst the reliefs claimed are payment of Tshs. 803,520,000/= for undelivered and underweight Metric Tonnes of Sulphur 99% Dust, which were paid by CIDTF; payment of Tshs. 480,000,000/= being liquidated damages for delays in delivery of 5,000MT under June 2012 contracts; and Tshs. 240,000,000/= being liquidated damages for delays in delivery 2000MT under the 3rd contract dated 2nd January, 2013. The amount of Tshs. 803,520,000/= according to Paragraph 28 of the plaint was derived from undelivered 693MT goods and underweight 144MT goods. This Court in Commercial Case No. 108 of 2013 was invited by the defendant herein who was previously known as Hammers. io Incorporation Co. Ltd to make an order of specific performance against CIDTF (the defendant) in respect of the contract for supply of 2000MT valued at Tshs. 2,400,000,000/= supplied to CIDTF. The defendant also claimed for payment of Tshs. 803,520,000/= that was deducted by CIDTF after CIDTF conducted its inspection and verification and claimed that there was undelivered and underweight Sulphur. This Court in determining Commercial Case No. 1.08 of 2012 entered a default judgment under rule 22 (1) of the Rules against CIDTF who failed to file its defence. It should be noted herein that there was no application for setting aside the default judgment as required by rule 23 (1) of the Rules. In that respect, it is patently clear that this High Court in Commercial Case No. 108 of 2013 dealt extensively with the claim of Tshs. 803,520,000/= and the issue of undelivered and underweight of sulphur and the High Court decreed amongst other things for the defendant herein to be paid Tshs. 803,520,000/= being balance on the contract for supply of 2000MT Sulphur 99% Dust (Makonde Sulphur). li It should be observed that though in Commercial Case No. 108 of 2013 the parties were Hammers Incorporation Co. Ltd as Plaintiff and the Board of Trustees of the Cashewnut Industry Development Trust Fund as defendant but as I have shown herein and it is not disputed by the Attorney General that Hammers Incorporation Co. Ltd changed its name and now is known as Bonanza Vietnam Company Limited (the defendant herein). Therefore, the plaintiff in Commercial Case No. 108 of 2013 is the same as the defendant in the present suit. Furthermore, though the plaintiff in the current suit is the Attorney General but according to her plaint the core responsibility of the CIDTF was to implement the Government policy on cashew nuts as such the plaintiff herein, who is the Attorney General is asserting the rights of the Government which rights were common to CIDTF (See the case of Peniel Lotta (Supra). Therefore, the parties in Commercial Case No. 108 of 2013 are the same as in the present suit. All in all, I find that the matter(s) in Commercial Case No. 108 of 2013 is/are directly and substantially in issue with the present suit because the issue of payment of Tshs. 803,520,000/= and its delayed 12 payments were finally and conclusively determined by this same Court thus barred by the principle of res judicata. In the end, I find merit on the objection and I proceed to dismiss the suit with costs for being res judicata. Since the present objection suffice to dispose the while suit, then I will not labour to determine other objections raised. It is so ordered. DATED at Dar es Salaam this 27th day of August, 2018. B.M.A Sehel JUDGE 27th day of August, 2018. 13