BAHARI FOOD LTD VS EXIM BANK T LTD COMM CASE NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION)

AT DAR ES SALAAM COMMERCIAL CASE N0.131/2022

BETWEEN BAHARI FOOD LIMITED..................................... PLAINTIFF

VERSUS EXIM BANK (T) LIMITED.......................................................... 1st DEFENDANT BRITAM INSURANCE (TANZANIA) LIMITED......................... 2nd DEFENDANT AND EXIM BANK (T) LIMITED............................................................... 3rd PARTY

JUDGMENT Date of Last Order: 02/05/2024 Date of Judgment: 12/07/2024 GONZI, J. The Plaintiff instituted the case at hand against the 1st and 2nd Defendant praying for Judgment and Decree against them jointly and severally that: a) Payment of USD 250,000 being the sum insured and value of the vessel MV Malkia wa Bahari. b) Payment of loss of investment of the money in the fishing business since the vessel was used for fishing business fetching USD 1000 per day from August 2022 to the date of Judgment. 1 c) Potential costs of removal of the vessel from the channel at USD 100,000. d) Payment of interest on the outstanding amount computed at the rate of 18% per annum accruing from 10th August 2022 to the date of Judgment. e) Payment of interest of 7% per annum of the decretal sum in the judgment up to the date of final payment. f) Punitive and exemplary damages as shall be assessed by this honourable court. g) Costs of this suit. h) Any other reliefs this honourable court may deem fit and just to grant. Upon being served with the Plaint, both Defendants filed their respective (Amended) Written Statements of Defence disputing liability towards the Plaintiff. In addition, the 2nd Defendant, as an alternative, applied for leave to institute third party proceedings against the 1st Defendant. The 2nd Defendant was granted leave by the Court to present 3rd Party Notice and the requisite

pleadings relating to 3rd party procedure were filed by all parties. 2 In the Final Pretrial Conference held on 7th August 2023 before Hon.Nangela,!, the following issues were framed: i) Whether at the time of occurrence of the alleged accident the plaintiff had a valid contract of insurance with the defendant. ii ) Whether the defendant have breached the terms of the contract of insurance. iii)If issue No.2 is answered in the affirmative, whether the 2nd defendant is entitled to indemnity or compensation from the 1st defendant/ 3rd party in respect of liability arising out of the alleged breach of a contract of insurance. ii i) To what reliefs are parties entitled. The Plaintiff filed Witness Statement of Ramzan Omar, the Operations Manager of the Plaintiff Company. The first Defendant filed two witness Statements of Melchzedeck Muro, Manager Life and Health Insurance, Bancassurance Principal Officer of Exim Bank (T) Limited; and of Lucy Diyami, from the Bancassurance Underwriting, Retail Banking Department at Exim Bank (T) Limited. The 2nd Defendant filed Witness Statement of Neema Mathayo, the Claims Manager at Britams Insurance Tanzania Limited. 3 Ultimately, the Plaintiff called one witness Mr.Ramzan Omar who testified as PW1. The 1st Defendant called one witnesses who testified in respect of both the main case and the third party notice. The witness was Mr.

Melchsedeck Muro who testified as DW 1. The 2nd Defendant produced one witness namely Neema Mathayo who testified as DW 2. These witnesses adopted their respective witness statements which constituted their evidence in chief. They tendered exhibits in Court and were cross examined by the opposite parties. I will be making reference to their Witness statements and the Exhibits tendered by them in the course of this Judgment. The background to the dispute, as it can be gathered from the pleadings, witness statements, oral testimonies during cross examination and the exhibits tendered, is essentially as follows: The 1st Defendant is a Commercial Bank and an Insurance Agent (Bancassurance Agent) of the 2nd Defendant which is a registered Insurance provider Company. Between them they have an agreement which was tendered as Exhibit DI. This agreement dated 21st April 2021 had a life span of 3 years period during which the 1st Defendant would market to its clients the insurance products of the 2nd Defendant. The products described in the Annex B to the Bancassurance Agreement included life assurance and 4 general insurance policies. It was agreed between the 1st and 2nd Defendants that for each client to whom the 1st Defendant would sell the insurance products of the 2nd Defendant, the 1st Defendant would receive a Commission on an agreed percentage from the premium paid by the client

for the insurance product purchased. Under Annexure A to the Bancassurance Agreement, the 1st Defendant would receive a commission of 25% for fire insurance, 12.50% for Motor insurance, 17.50% for marine insurance, 15% for aviation insurance, to mention but a few insurance products. Annexure A to the Bancassurance Agreement also stipulated that all revenue earned by the 1st Defendant Bank by placing insurance through the agreement, should be shared in terms specified by Tanzania Insurance Regulatory Authority (TIRA). The 1st Defendant Bank was supposed, under the Bancassurance Agreement, to raise fiscalized invoices for all commissions for the previous month before the 5th date of the following month and the 2nd Respondent was supposed to pay the commission to the 1st defendant Bank on or before the 10th working day of the following month for the business booked in the previous month. The obligations of the 2nd Defendant as an insurer were stipulated under Clauses 5.4.1 to 5.6.4 of the Bancassurance agreement including sourcing 5 and availing the various types of insurance products, as requested by the Agent (1st Defendant) for the benefit of the Agent's customers and processing all claims within the agreed timelines as indicated. The 2nd Defendant also accepted the obligation to pay the commissions to the agent (1st Defendant) on time. The obligations of the 1st defendant were

stipulated under clauses 6.1.1 to 6.3.2 of the Bancassurance Agreement. These included remitting all premiums to the Insurer's bank account upon receiving placement instructions from the clients, obtaining all relevant claims documentation and assembling and submitting them for payment to the Insurer (2nd Defendant). Under Clause 12 of the Bancassurance agreement, the 1st and 2nd Defendants agreed to indemnify each other and hold each other harmless against any loss suffered or sustained by either party pursuant to breach of the provisions of the Bancassurance agreement. The 2nd Defendant, pursuant to the Bancassurance Agreement with the 1st defendant, provided the 1st Defendant with General Insurance Claims Policies and Procedures Manual and the 2021 Underwriting Policies and Procedures Manual, both issued by, and in the name of, the 2nd Defendant insurance Company. They were tendered and admitted as Exhibits D3 and D2 respectively. 6 In the course of the Agent - Principal relationship between the 1st and 2nd Defendants respectively, the 1st Defendant received a Proposal from the Plaintiff seeking for the 2nd Defendant to insure the Plaintiff's marine fishing vessel christened "Malkia wa Bahari". This is according to Exhibit P3 which is the Proposal Form for Marine Hull Insurance. It is a standard form issued by the second defendant to be filled by clients requesting to

purchase Insurance Policies. The proposal form (Exhibit P3) showed details of the fishing vessel to be insured such as the year it was built in Norway, the materials used to build it, the year it was purchased, its length which was 18 meters and its breadth which was 4 meters with a gross tonnage of 33.94 tonnes. It also showed that the vessel had been last surveyed on 18th February 2022 by Tanzania Shipping Agencies Corporation (TASAC) and that it had been registered at Dar es Salaam by the Registrar of Ships and given Certificate of Registration No.00003301. The proposal form disclosed the total indemnity which was being proposed for the marine insurance cover was USD 250,000. The 2nd Defendant issued Exhibit D6 (Quotation for Insurance Premium) showing that the 2nd Defendant had accepted to insure the Plaintiff for 6 months from 4th April 2022 to 3rd October 2023 for its Fishing Boat christened 7 "MV Malkia wa Bahari". Exhibit D 6 has two components of the proposed Marine Insurance. For Marine Hull Insurance, the Insured sum is USD 200,000.00 in respect of Marine Hull including machinery and equipment. Also, Exhibit D6 relates to marine insurance covering Third party and passenger liability insured at USD 50,000.00. The territorial limit of the Marine Hull Insurance Policy is described as Tanzanian Waters. Exhibit D6 also shows insurance in respect of personal accident

covering only crew on MV Malkia wa Bahari where the insured sums are TZS 80,000,000/= for annual earnings and TZS 25,000,000/= for medical expenses @TZS lmillion.The Quotation for Insurance Premium contains the Warranties that: "the vessel is certified as sea worthy by a statutory body (local maritime boa rd/authority); that the vessel is inspected annually by statutory body and holding a valid certificate of survey; that vessel operates in fair weather only and does not proceed to sea when there is an adverse weather warning from the port or Meteorological Department; that the crew is dully qualified, certified and experienced as per the norms laid down for that size and type of vessel; that loss of hire is excluded; subject to valuation survey by qualified and experienced surveyor within one month of the policy at the 8 insured's cost and that for a 6-months cover, in case of any claim, the client will have to pay the remaining 30% premium for his claim to be processed." According to Exhibit P4, the 2nd Defendant issued a Tax Invoice to the Plaintiff on 23rd June 2022 for USD 1,342.25 being the Premium for Marine Hull, Debit Note No.3626, out of which USD 1,137.50 was the amount for the premium and USD 204.75 was the VAT payable. The Tax Invoice was with respect to Marine Hull Insurance. The Tax Invoice stipulated the 2nd Defendant's bank details for payment mentioning CRDB

Bank, Barclays Bank and Equity Bank account numbers. On 23rd June 2022, the 1st defendant, as an agent of the 2nd Defendant, issued Interim Cover Note for Marine Hull insurance in favour of the Plaintiff. The Interim Cover Note was admitted as Exhibit P5. It covers the period from 23rd June 2022 at 4:58PM to 22nd June 2023. The vessel covered by the marine insurance is described as "Malkia wa Bahari" owned by Bahari Foods Limited (the Plaintiff herein). The items covered are described as Hull limit, including machinery, equipment insured at the sum of USD 200,000.00 and Third party and passengers' liability insured at USD 50,000.00. The Interim Cover Note bears TIRA Cover Note No. 10322-17488-66616 and Debit No. 9 3626 for Tax Invoice No. BITL33098. The 1st Defendant is described in the Interim Cover Note as the Intermediary in respect of the cover note. Exhibit D5 is a Tax Invoice dated 13th July 2022 from the 1st Defendant to the 2nd Defendant wherein the 1st Defendant was claiming TZS 544,240.13 being the "Insurance Commission IFO Bahari Foods Limited" due to the 1st Defendant from the 2nd Defendant in respect of the insurance product sold by the 1st Defendant as an agent of the 2nd Defendant. This Invoice was received by the 2nd Defendant on 14th July 2022 at its Headquarters in Dar es Salaam and the official stamp and signature of the receiving officer of the 2nd Defendant

are imprinted on the tax invoice. The Tax Invoice was accompanied by details underneath it showing that it related to the Debit Note No.3626 for Marine Hull Insurance in respect of Bahari Foods Limited for the period between 23rd June 2022 and 22nd June 2023. The Commission rate is indicated as 17.50% out of the Total Premium of USD 1,342.25 hence the total Commission payable being 199.06 USD to which a VAT of USD 35.83 is added thereby bringing the commission amount together with VAT to the total of USD 234.89 or the equivalent of TZS 544,240.13. The 1st Defendant in Exhibit D 5 also provided its bank account details for payment of the commission by the 2nd Defendant. io Exhibit Pl is a "Licence for unregistered Vessel" issued by the Registrar of Ships on 18th February 2022 in respect of MV Malkia wa bahari which is shown as being owned by Bahari Food Limited. Exhibit Pl describes the vessel to be 18 meters in length and 4 meters beam, made of fibre with a tonnage of 33 tonnes. Exhibit P 2 is a Local Safety certificate issued on 18th February 2022 by Tanzania Shipping Agencies Corporation (TASAC) at Police Marine Dar es Salaam. The Local safety Certificate is with reference No. TASAC/MSE/P/QMS/804-A and shows that a surveyor named Ghadaf H. Chambo had surveyed the vessel in accordance with the regulations under the Merchant Shipping Act (Small Ships, Local Cargo Ship Safety,

Small Ship safety, Surveys and Inspection for Vessels Engaged on Local and Coastal Voyages, Inland Waters) Regulations of 2006. The inspected parts of the vessel such as Hull external and hull internal, keel, beams and floor are all marked as "good" with the manning of the vessel described as "Experienced Crew." That is the background situation and commercial transactions which brought together the Plaintiff, the 1st Defendant and the 2nd Defendant in this case. In the period during which the Plaintiff was holding the marine insurance interim cover note issued by the 2nd Defendant through its Bancassurance ii agent, that is the the 1st Defendant, in favour of the Plaintiff, for its MV Malkia wa Bahari Fishing vessel, the relationship slowly drifted off the current and progressively changed for worse. According to Exhibit D9 which is made up of email correspondences between the 2nd and 1st Defendants, the 2nd Defendant on 21st July 2022 at 08:50 hrs through its Officer one Maria Maembe wrote to someone Jerry-an officer of the 1st Defendant, requesting the 1st Defendant Bank to share the "seaworthiness certificate" of the Plaintiff. On the same date 21st July 2022 at 10:12 hrs, the 2nd Defendant through another officer of the 2nd Defendant called Irene Msangi, wrote to Lucy Diyami, an officer of the 1st Defendant Bank, demanding that: "as per the below mail, kindly assist with

sea worthiness certificates for respective client marine vessels". This email was followed up by a polite reminder in respect of the same subject on 27th July 2022 at 12:37 hrs from Orene Msangi, an Officer of the 2nd Defendant Insurance Company to Lucy Diyami, an officer of the 1st Defendant Bancassurance Agent. On 30th July 2022 at 15:09 hrs, Irene Msangi wrote an official email to Lucy Diyami communicating that: "as it was initially discussed, kindly be informed that we are holding off the insurance cover until we get the sea worthiness certificates from the respective client." The demand for 12 seaworthiness certificate and the holding off of the insurance cover by the 2nd Defendant was not communicated to the Plaintiff by either the 2nd or the 1st Defendant. It ended between the 2nd and 1st Defendants as Principal and Agent respectively. The bombshell exploded on 11th August 2022 when, at 9:58 hrs, one Omar Ramzan, the General Manager of the Plaintiff Company wrote an email which was admitted as part of Exhibit P7 collectively. The email was written by the Plaintiff's General Manager to Lucy T. Diyami, an Officer of the 1st Defendant Company in which the Plaintiff stated: "As informed, another of our vessels has suffered sinking. Kindly start the process for the needful." The email by the Plaintiff was promptly responded to by the 1st Defendant through Lucy T. Diyami at

10:04 hrs on 11th August 2022, who said: "we are very sorry for the loss. Kindly assist to share sea worthiness certificate so as to proceed with the process". Only 5 minutes later at 10:llhrs, Omar Ramzan, the General Manager of the Plaintiff company responded to the e-mail from Lucy Diyami of Exim Bank Tanzania Limited. He explained that: "for vessels with length as Malkia TASAC issues a safety certificate and not seaworthiness certificate. Please find attached certificate". Three minutes later, the said Lucy 13 Diyami responded by email at 10:14hrs on 11th August 2022 that: "this is well noted. Kindly share date and location of the claim". To this e- mail, Mr. Ramzan Omar replied at 10:16 with the following details: "Date 10/08/2022. Location Nyamisati Coast". It appears that Lucy T. Diyami for the 1st Defendant, passed over the details of the accident and the prospective claim for indemnity placed by the Plaintiff, to the 2nd Defendant Insurer. Exhibit P6 shows broader and more inclusive e-mail correspondences which involved officials of the Plaintiff, the 1st Defendant and the 2nd Defendant on 30th September 2022 and on 3rd October 2022. On 30th September 2022, at 9:51 hrs the Plaintiff through Ramzan Omar wrote to the 2nd Defendant's officer Neema Mathayo and remarked: "I don't understand what is going on here. The broker says he has already discussed with the insurer and

we can proceed. And Britam says that we have to wait for the final report. So, what are we doing? Are we removing the ship or not? Why have not received our policies for this while cover note has been issued months ago. Can Exim and Britam put their ACTS TOGETHER, we are running short of time". 14 At 1010:06 hrs on 30th September 2022, Neema Mathayo for the 2nd Defendant wrote to Ramzan Omar the General Manager of the Plaintiff company, copying the e-mail to, amongst others, Lucy Diyami and other officials of the 1st Defendant Bank. She wrote: "Dear Omary, we would like to clarify that our last email was responding on the limit payable which for now we cannot commit as we are yet sure on the investigation findings". On 3rd October 2022 at 08:51hrs Omar Ramzan, the General Manager of the Plaintiff Company wrote again directly to Neema Mathayo, an officer of the 2nd Defendant: "ONCE AGAIN!! PLEASE SHARE POLICY." This e-mail was responded to 7 minutes later by Neema Mathayo for the 2nd Defendant insurer, who wrote: "We advise you proceed to liaise with the bank for the same and for all the correspondences we shall be sharing with the bank". From there, official codial communication somehow broke down. All the parties involved resorted to court to fight for what they considered to be their rights in the circumstances. The 1st Defendant through its officer Melchizedeck E. Muro,

submitted in Court a certificate of authenticity of the 15 e-mail correspondences and of the Transaction Batch Bank Statement from the core banking operation system to prove existence of transaction carried out by the first Defendant depositing the premium amount in the bank account of the 2nd Defendant. These are exhibits D4 (b) and D 4 (c). D 4 (b) shows that in the USD Account of Britam Insurance (Tanzania) Limited, there was credited USD 1,342.00 on 18th June 2022 whose narration was "CD Marifrers Company Limited". Exhibit D4(c) shows that for the same date 18th June 2022 at 12:54:30 in the same 2nd Defendant's bank account No.0010051155 maintained at Exim Bank (T) Limited at Exim Tower Branch, there was credited Cash Deposit of USD 1,342.00 equivalent to TZS 3,127,531.00 being "Cash Deposit MARIFRERS company limited". From the email correspondences among the parties herein which started from 11th August 2022 to 3rd October 2022, it appears that there was no agreement between and among them on how to handle the situation. In the meanwhile on 28th September 2022, the Plaintiff's lawyers wrote a letter that was tendered in court as Exhibit P8 addressed to the 2nd Defendant and copied to the 1st Defendant. The Plaintiff's demand letter to the Defendants was not responded to by the Defendants. The letter shows that it was received by the 1st Defendant on 24th October 2022. In

that letter, the 16 Plaintiff, through A&D Law Attorneys, was demanding for immediate indemnification of USD 250,000 being the value and sum insured of the fishing MV Malkia wa Bahari. Paragraphs 6, 7 and 8 of the demand letter are more relevant here: "6L That according to the information that was supplied to our client by your broker, you were fully informed and you were processing the claim. The fact that you were aware of the accident, you sent your loss assessor and insurance adjuster to visit the place of accident so as to come up with the loss report for the purposes of indemnification.

7. That our client has been making a very dose follow up since the date of intimating the claim but there has not been any response to his efforts from the brokers. In addition to the follow up, our client went ahead and shared two letters one from the Ministry Livestock and Fisheries dated 2&h August 2022 and another letter with reference No.GA.90/258/02/40 dated 26th August 2022 from Tanzania Ports Authority which was a notice to remove the vessel since it had blocked other vessels from the channel. 17 8. That unfortunate even with the above concerns, according to Broker you have decided to remain silent. Our client did not give up he went ahead to inform you that ifthe vessel was to be remove by the government (TPA), it would cost you a lot of money than being removed privately. But as if that was not enough, you decided to remain silent." Upon the continued misunderstandings, the Board of Directors of the Plaintiff Company resolved on 9th November 2022 to institute a suit against the 1st and 2nd Defendants herein. The Board resolution was tendered as exhibit P 9 collectively. The Board resolution was accompanied by a Certificate of Incorporation of the Plaintiff Company and Business Licence of the Plaintiff for the period 29th July 2020 to 29th July 2021. In disputing the claims, the 2nd Defendant tendered Exhibit D7 which is a copy of the Plaint in Commercial Case No.

117/2022 between the Plaintiff herein against the 1st and 2nd Defendants relating to another fishing vessel of the Plaintiff called "MFV Hamu", that had been insured by the 2nd Defendant through the 1st Defendant in a somewhat similar style and that had sunk and the Plaintiff had sued the Defendants. The Plaintifff was not successful because the ship "MFV Hamu" was not registered in the name of 18 the Plaintiff Company (it was registered in the name of an entirely different person) and therefore the Plaintiff was found to have no insurable interest and the insurance contract was void. Exhibit D8 is a letter dated 28th December 2022 addressed to the 1st and 2nd Defendants from the Plaintiff intimating its intention to withdraw its Claim of MFV Hamu that had sunk on 15/05/2022, if all parties to that case would accept to bear their own costs. The Defendants also tendered Exhibit DIO being a report from Tanzania Meteorological Authority (TMA) dated 18th August 2023 addressed to MM Attorneys describing the Wave height, Wind Speed, and Wind direction in the sea near Dar es Salaam on 10th August 2022. The report shows the state of the sea along the Indian Ocean coast in Dar es Salaam on 10th August 2022. The report partly states that: "Only slight to moderate seas were experienced on 10th August 2022 along the Indian Ocean Coast in Dar es salaam and nearby seas as indicated by

wave heights ranging from 0.5m to 0.9m. Also, wave direction of south east (190 to 145 degrees) is inconsistent with sea state, which can cause adverse impacts in marine activities. It should be noted that further East, deeper into the ocean, slightly higher waves are usually likely due to absence of obstacles, 19 the difference, based on observations near the cost, is minimal." Upon conclusion of hearing based on witness statements for evidence in chief and oral testimonies during the cross examination and re-examination of the witnesses, the parties were afforded an opportunity to file their final submissions. The Plaintiff filed its final submissions through Mr. Dickson Paulo Sanga, learned advocate. The 1st Defendant who also doubled as the Third party, filed its written final submissions through Mr. Phillip Lincoln Irungu, learned advocate. The 2nd Defendant filed its final submissions through Mr. Makaki Masatu, learned advocate. I thank them all for their insightful arguments. In essence the Plaintiff's counsel submitted that at the time of occurrence of the alleged accident, the Plaintiff had a valid insurance with the defendants. He argued that Exhibit P5 is an Interim Cover Note issued by the 2nd Defendant in respect of MV, Malkia wa Bahari covering the period from 23rd June 2022 to 22nd June 2023 and the total sum insured was USD 250,000.00. He submitted that the

Cover Note was approved by one Victoria Saluta for the 2nd Defendant meaning that she was satisfied with the requirements met by the Plaintiff. Mr. Sanga, learned advocate argued that the 1st Defendant 20 was an agent of the 2nd Defendant as shown under Paragraphs 4 5,6,7,8,9 and 10 of the Witness Statement of DW1 Melchzedeck Muro. Mr.Sanga, learned advocate, argued that there is no way the 2nd Defendant can deny existence of an insurance contract while her agent, the 1st Defendant, explicitly admits the existence and validity of the same contract concluded by the 1st Defendant for and on behalf of the 2nd Defendant, who is the Principal. He cited section 178 of the Law of Contract Act CAP 345 for the position that contracts entered by an Agent will bind the Principal in the same manner. He cited the case of NIKO Insurance (T) Limited versus Hussein Athuman Mwaifyusi and GIN Insurance Brokers Limited, Civil Appeal No.168/2017 determined by the Court of Appeal of Tanzania, where the court held that payment of premium to the broker was payment to the insurer. On the second issue as to whether the defendants have breached the contract, the Plaintiff's learned counsel, Mr. Dickson Sanga, submitted that under the insurance contract, as evidenced by the Interim Cover Note Exhibit P-5, the 1st and 2nd Defendants accepted to indemnify the Plaintiff against perils of the sea and upon

the happening of the risk insured. Therefore, they were bound to pay the indemnity. He argued that the 1st and 2nd Defendants, 21 however, have refused to compensate the Plaintiff contrary to their contractual undertaking. He relied on the same case on NIKO Insurance (supra) for the rule that an Insurer has a duty to compensate a holder of a valid insurance cover issued by him. He reasoned that despite being notified of the accident, the defendants have refused to pay the plaintiff todate. On the 3rd issue as to whether the 2nd Defendant is entitled to indemnity from the 1st Defendant, in case the 2nd issue is answered in the affirmative, Mr.Sanga, learned advocate, was of the view that the acts of the 1st Defendant are deemed to be acts of the 2nd Defendant as the 1st Defendant was an agent of the 2nd Defendant. He argued further that under the Smart policy system, there was no way that the 1st Defendant could print the insurance interim cover note without authorization by 2nd defendant. Mr. Sanga argued that the 2nd Defendant has not reported in any authority any incident of forgeries and has not denounced to have ever been paid premium by the 1st Defendant who has tendered in court a Batch Statement showing deposit of the premium to the bank account of the 2nd defendant. Mr,Sanga relied on Exhibit DI, the Bancassurance agreement between the 1st and 2nd defendants. He argued

that the 1st Defendant as an agent of the 2nd defendant does not dispute that premium was paid and an interim cover 22 note was issued and therefore that the 1st Defendant was thereby admitting that the plaintiff had a valid contract of insurance with the Principal of the 1st Defendant namely the 2nd Defendant. On the fourth issue as to what reliefs are parties entitled, Mr.Dickson Sanga, learned advocate for the Plaintiff, argued that the insured sum of USD 250,000 should be paid by the 2nd defendant to the Plaintiff. He argued that the amount is a contractually agreed sum and that it has been specifically pleaded and strictly proved as special damages, in conformity with the rule in Strabag International (GMBH) versus Adinani Sabuni, Civil Appeal No.241/2018 decided by the Court of Appeal which held that special damages must be specially pleaded and strictly proved. The Plaintiff's learned counsel relied on Exhibit P-5 the interim cover note specifying the insured sum as well as paragraphs 17(i) and (iii) of the Witness Statement of the Plaintiff to substantiate that the Plaintiff is losing USD 1000 per day in loss of business from 10th August 2022 upon occurrence of the accident to the date of Judgment. Mr. Sanga, learned advocate, argued that the interests of 18% and 7% per annum claimed in the prayers in the Plaint based on commercial rate and court rate are justified by

the fact that the vessel was a business vessel used in commercial fishing. He argued that the 23 Plaintiff tendered a business licence in court. On exemplary or punitive damages, Mr. Sanga submitted that in Alfred Fundi versus Geled Mango, the Managing Director Sadhru Coach Limited and Phoenix of Tanzania Assurance (T) Limited, Civil Appeal No.49/2017 decided by the Court of Appeal, the court held that general damages are awardable at the discretion of the Court and reasons for the decision must be given. The Plaintiff's learned counsel called upon this court to consider such relevant factors including the plaintiff's loss of business investment opportunities, wasted time, disturbance, inconveniences, mental and psychological torture when determining the punitive and exemplary damages. Mr. Sanga also craved for costs arguing that costs would normally follow the event. He relied on Mohamed Salmini versus Jumanne Omary Mapesa, Civil Application No.4 of 2014 for that rule. He concluded by reiterating that the plaintiff is entitled to USD 250,000.00 being the sum insured in respect of the ship Malkia wa Bahari; USD 1000 daily from 10th August 2022 to the date of Judgment being loss of income; interest at 18% from 10th August 2022 to the date of Judgment as commercial rate and the interest at 7% on the decretal sum being court rate of interest as well as punitive and

exemplary damages and costs. 24 Contrary to what is contained in their pleadings and in their Witness Statement, in their written final submissions, the 1st Defendant through Mr. Phillip Irungu, learned Advocate, refuted the claims by the Plaintiff against the 1st and 2nd Defendants. On the first issue, Mr. Irungu, learned counsel, submitted that PW1 Ramzan Omar in his testimony did not tender any proof of occurrence of the accident and never testified to have reported the accident to the relevant authorities. He argued that PWl's testimony was merely the bare words of the mouth on occurrence of the alleged accident. He submitted that the burden of proving occurrence of the alleged accident involving the Plaintiff's insured vessel was upon he who had alleged that the accident had occurred, namely the Plaintiff. He relied on sections 110 and 111 of the Evidence Act. He supplied the case of Henry Rimisho Mtenga versus Airtel Tanzania Limited, Civil Appeal No. 145/2020 decided by the Court of Appeal for the rule that the burden of proof lies on he who alleges. For the same rule, Mr.Irungu, learned advocate, also cited the case of Paulina Samson Ndawavya versus Theresia Thomas, Civil Appeal No.45 of 2015. Mr. Irungu, learned advocate, submitted that although it is the stand-point of the 1st Defendant that no accident occurred involving the Plaintiff's insured 25 vessel namely MV

Malkia wa Bahari, the 1st Defendant does not dispute the fact that the Plaintiff had a valid insurance contract with the 2nd Defendant for whom the 1st Defendant acted as her agent. He submitted that consideration in the form of a premium for the said insurance contract was paid for by the Plaintiff through the 1st Defendant and the insurance interim cover note Exhibit P-5 was issued to the Plaintiff by the 1st Defendant as an agent of the 2nd Defendant. He argued that the Interim Cover Note (Exhibit P5) has a barcode reader which when scanned, shows that a premium of USD 1,342.24 which is equivalent to TZS 3,151,603.00 was paid for it. He argued that the barcode reader was found to be valid during the cross examination where DW 2 Neema Mathayo for the 2nd Defendant testified that the premium indicated in the Cover Note was paid and that the sum is seen on the TRA official legal receipt which can be activated and verified through scanning the barcode reader. On the second issue, Mr. Irungu, learned advocate, submitted that the 1st and 2nd Defendants have not breached the insurance contract because the Plaintiff failed to prove occurrence of accident by not bringing in court any documents verifying the occurrence of the alleged accident. He argued that 26 in absence of an accident involving the insured vessel, the Plaintiff is not entitled to indemnity benefits under the

insurance contract. On the third issue, as to whether the 2nd Defendant is entitled to indemnity from the 1st Defendant as a third party, Mr. Irungu, learned advocate, was brief that since the Plaintiff is not entitled to anything from the 2nd Defendant due to absence of an accident and loss to be compensated for, it follows that the 1st Defendant has no duty to indemnify anything the 2nd defendant, in turn. On the fourth issue, Mr. Irungu, learned advocate, submitted that the only relief worth being granted is dismissal of the suit with costs. The 2nd Defendant through Mr. Makaki Masatu, learned advocate, made its final submissions in writing. Mr. Masatu learned counsel, submitted that there is no valid insurance contract between the 2nd Defendant and the Plaintiff in the present case for several reasons. The first reason advanced by Mr. Makaki Masatu, learned advocate, is absence of insurable interest on the Plaintiff. He argued that the Plaintiff did not tender certificate of Registry which in terms of section 29 of the Merchant Shipping Act, 2003 read together with Regulation 28 of the Merchant Shipping (Registration of Ships) 27 Regulations of 2005, proves ownership of a ship. He referred the court to the case of SAS Logistics Limited versus Usangu Logistics Ltd, Commercial Case No.28 of 2022 where this court held that for a party to insure its property, it must establish

insurable interest that is to say that the one seeking to insure the goods, must be the owner of the goods. Mr. Masatu, learned advocate, also referred the court to section 130 of the Insurance Act, 2009, as amended, which prohibits entering into an insurance contract by someone who does not have an insurable interest in the property. He relied also on the case of Bahari Foods Ltd versus Exim Bank and Another (Commercial Case No. 117 of 2022 where at page 27 this court had found the Plaintiff to have no insurable interest in the vessel (MV Hamu) and had dismissed the claim by holding that the insurance contract was voidab initio for lack of insurable interest. The second reason advanced by Mr. Masatu, learned advocate, to substantiate that the Plaintiff had no valid insurance contract is that the plaintiff breached the principle of utmost good faith. He cited the case of The Motor union Insurance Co. Ltd versus AK Ddamba (1965) EALR 271 where the High Court of Uganda held that a contract of insurance is one of utmost good faith where the insured knows everything about the risks 28 while the insurer knows nothing hence the insured is duty bound to disclose true statements in the proposal form. He argued that in the case at hand there was no disclosure by the Plaintiff of the crucial facts such as the fact that the Plaintiff was not possessing seaworthiness certificate, which

was one of the conditional warranties set out by the 2nd Defendant in the Insurance Premium Quotation (Exhibit D6.) He also referred to Exhibit D7 an e-mail from one Lucy Diyami an officer of the 1st Defendant bank to Ramzan Omar an officer of the Plaintiff Company requesting to be furnished with certificate of sea worthiness after the alleged accident had happened. In response to that request, the Plaintiff had supplied a Safety Certificate which means that indeed the Plaintiff was not in possession of the sea worthiness certificate as required. Mr. Masatu cited the case of Abdillahi Kassimu Mandepe versus Britain Insurance (Tanzania) Limited and CRDB Bank Insurance Broker Limited, Civil Case No.4 of 2020 where non­ disclosure of crucial facts invalidated the insurance agreement. The third reason advanced by Mr. Masatu, learned advocate, was that of non-payment of premium by the Plaintiff. He submitted that premium is the consideration to be paid by the insured to the insurer in absence of which the insurance contract would be void. He argued that Regulation 35 made 29 under the Insurance Act, read together with Section 137 impose the time limit of seven days for payment of premium, failure which the insurance contract becomes void. He cited the case of Registered Trustees of JHPIEGO versus Liason Tanzania Limited, Civil Appeal No.183 of 2018 decided by the Court of Appeal of

Tanzania to the effect that in absence of payment of premium, there is no valid insurance contract. He argued that section 137 of Insurance Act was enhanced by the Written Laws Misc. Amendment Act No.7 of 2017 that through section 39 thereof repealed section 72 of the Insurance Act and it now requires full premium to be paid by the insured person to the insurer prior to issuance of the interim cover note. He argued that the Plaintiff was supposed to prove payment of premium to the 2nd defendant and that the plaintiff has the burden of proof. He argued that the alleged payment through the 1st Defendant is disputed by the 2nd defendant. He relied on the case of Bahari Foods Limited and Exim Bank and another (Comm. Case No. 117/ 2022) for the rule that where the Plaintiff fails to prove that he has paid the premium, the court cannot hold that there was a valid insurance contract. He argued that the purported evidence brought by the 1st Defendant vide Exhibit exhibits D4 (b) and D 4 (c) being the transaction batch Statements, showing that there was 30 payment of premium by the plaintiff through the 1st Defendant, which deposit transaction was done by the 1st defendant by depositing the amount of premium directly in the bank account of the second Defendant, was not genuine. He reasoned that the deposit by the 1st Defendant was purportedly made by the 1st Defendant on 18th June 2022

while the Tax Invoice for the same premium was raised by the 2nd Defendant on 23rd June 2022. Also, the narrations for the payment "Cash Deposit MARIFRERS Company limited" Referred to another company and not the Plaintiff Company herein. He argued that the evidence of depositing payments for the insurance premium in the bank accounts is not valid and should not be believed by the court and it proves that, in fact, the requisite premium has not yet been paid by the Plaintiff to the 2nd Defendant despite the Plaintiff holding an interim cover note. Mr. Masatu, learned advocate, argued that even if the interim cover was issued in favor of the Plaintiff, still there was a requirement for payment of premium because payment of premium is a statutory requirement. He argued that the 2nd defendant cannot be estopped from denying payment of premium simply because the Plaintiff was issued with an interim cover note. He reasoned that there can be no estoppel against the requirement of 31 the law. He cited the case of the Republic versus MT29887 WOI Komba Gustavu, Criminal Appeal No.303 of 2011 for the rule that there can be no estoppel against a statutory provision. For the same rule Mr. Masatu, learned counsel also cited the case of CRDB Bank PLC versus Symbion Power Tanzania Limited, Civil Appeal No.371 of 2022 decided by the Court of Appeal of Tanzania. Mr. Masatu gave the fourth reason

for invalidity of the insurance contract that the interim insurance cover note had been suspended by the 2nd Defendant prior to the occurrence of the accident for want of seaworthiness certificate on the part of the Plaintiff in respect of the Plaintiff's vessel "MV Malkia wa Bahari". He referred to the Insurance quotation Exhibit D6 that was shared by the 2nd Defendant with the Plaintiff and which contained warranties inter alia that the plaintiff was supposed to possess a certificate of sea worthiness. Mr. Masatu, learned advocate, referred the court to exhibit D9, the reminder e-mails demanding sea worthiness certificate which were however still not complied with by the Plaintiff. The fifth reason for invalidity of the insurance contract which was advanced by Mr. Makaki Masatu, learned advocate for the 2nd Defendant was that there was breach of warranties contained in Exhibit D6, by the Plaintiff. He argued 32 the warranties required a certificate of sea worthiness and in addition for the vessel to operate in fair weather only. He relied on Exhibit D7- the weather report from Meteorological Department to argue that there was a warning of adverse weather conditions at sea on 10th August 2022 when the Plaintiff's vessel MV Malkia wa Bahari capsized at Nyamisati Channel. He argued that the Plaintiff should have kept his ship at safety of the harbour instead of sending it to

higher seas in bad weather. On the second issue framed by the Court, that is whether or not the defendants have breached the insurance agreement, Mr. Masatu, learned counse, argued that there is no proof that the Plaintiff's vessel ever left Dar es Salaam port and sailed to Nyamisati Channel on the material date of the alleged accident. He argued that Section 55(1), (2) and (3) of the Ports Act requires a ship to obtain a clearance from the Harbours Authority before it can sail out of the harbour. He argued that as the ship- "MV Malkia wa Bahari", had a captain and crew on board when it capsized, the Plaintiff ought to have brought the Ship's Captain and the Crew as key witnesses on the plaintiff's side but the plaintiff failed to do so. Mr.Masatu pressed for the court to draw an adverse inference against the Plaintiff for the plaintiff's failure to call the material witnesses. He relied on the case of Hemed Said 33 versus Mohamed Mbilu (1984) TLR 113z and the case of Omary Hussein@Ludanga and another versus R, Criminal Appeal No.547 of 2021 for the rule of drawing adverse inference against a party who does not call material witnesses in his case. Mr. Makaki Masatu, learned advocate, argued that the law regulating registration of ships requires notification of accidents but the Plaintiff in this case did not notify the authorities on the alleged occurrence of the accident. He

relied upon the Merchant Shipping (Accident Reporting and Investigation) Rules GN. 61 of 2019 where the owner of a ship involved in an accident should notify the Registrar of ships as soon as practicable about occurrence of an accident. The learned counsel for the Plaintiff submitted further that the Plaintiff had no fishing licence and that the plaintiff's ship was not registered for shipping business. He cited section 22 of the Fisheries Act and Regulation 12 (1) of the Fisheries Regulations, 2005 which requires possession of a valid a licence by all commercial fishermen. Mr. Masatu argued that there is no report showing extent of damage suffered to the capsized fishing vessel of the Plaintiff. He referred the court to the 34 case of SANLAM General Insurance Tanzania Ltd versus Dennis Charles and another, Civil Appeal No.51 of 2021 for the rule that special damages must be pleaded and strictly proved. He cited the case of Alliance Insurance Corporation Limited versus Arusha Art Limited Civil Appeal No.297 of 2017 decided by the Court of Appeal for the rule that the sum insured does not necessarily represent the measure of indemnity in insurance but it indicates the maximum amount for which the insurer will be liable, and therefore, the insured must still prove the extent of the loss suffered. He argued that the plaintiff did not provide such evidence showing the extent of

damage to the capsized ship. Mr.Masatu, learned counsel, called upon the court to answer the 3rd issue in the affirmative that the 2nd Defendant is entitled to indemnity as against the 3rd Party (who is also the 1st Defendant) in case the Court finds the 2nd Defendant liable to indemnify the Plaintiff. He argued that the 1st defendant did not conform to its duties under the Bancassurance Agency Agreement between the 1st and 2nd Defendants. He argued that, for example, the 2nd defendant insisted repeatedly for the 1st Defendant to submit certificate of sea worthiness of the plaintiff but in vain. Also, he argued that the 2nd Defendant had told the 1st Defendant to communicate to the plaintiff that 35 the interim cover note had been withheld for the plaintiff's failure to submit a certificate of seaworthiness but the 1st defendant did not notify the Plaintiff on the suspension of the interim cover note until after the accident had occurred. Mr. Masatu, learned advocate, argued that the 1st defendant's act of withdrawing their second witness Lucy Diyami from testifying in court despite having duly filed her witness statement, warrants an adverse inference being drawn against the 1st Defendant. Mr. Masatu learned counsel for the 2nd Defendant concluded by submitting that the Plaintiff is not entitled to any reliefs and the suit should be dismissed with costs. I will start my

analysis with regard to the first issue as argued by the parties' learned counsel. The first issue reads that: i) Whether at the time of occurrence of the alleged accident the plaintiff had a valid contract of insurance with the defendant. The issue was framed in a way showing that .the very occurrence of the accident was also being disputed over and above the question of validity of the insurance contract between the Plaintiff and the 2nd Defendant. So, in order to resolve this issue exhaustively it is necessary to address its twin 36 limbs as to whether or not the alleged marine accident involving the Plaintiff's "MV Malikia wa Bahari" really occurred thereby causing loss to the Plaintiff; and if the accident actually occurred, whether or not at the time of its occurrence, the Plaintiff was possessing a valid insurance contract with the 2nd Defendant. I will start with the first limb of the issue. Did the accident really occur on 10th August 2022 involving the Plaintiff's ship MV Malkia wa Bahari at Nyamisati Channel in the India Ocean? Without flinching, my answer is in the affirmative. Yes, on the balance of probabilities, there is ample evidence to prove that the alleged marine accident involving the Plaintiff's "MV Malikia wa Bahari" really occurred on 10th August 2022 thereby causing loss of the vessel and attendant losses to the Plaintiff. I will substantiate my

finding. In the first place, there is an e-mail correspondence of 11th August 2022 at 9:58 hrs admitted as part of Exhibit P7 collectively written by one Omar Ramzan, the General Manager of the Plaintiff Company. The e-mail was written by the Plaintiff's General Manager to Lucy T. Diyami the Principal Officer of the 1st Defendant Company in which the Plaintiff stated: "As informed, another of our vessels has suffered sinking. Kindly start the process for the needful." The email by the plaintiff was promptly 37 responded to by the 1st Defendant through Lucy T. Diami at 10:04 hrs on 11th August 2022 who said "we are very sorry for the loss. Kindly assist to share sea worthiness certificate so as to proceed with the process". 5 minutes later at 10:llhrs, Omar Ramzan the General Manager of the Plaintiff company responded to the email from Lucy Diyami of Exim Bank Tanzania Limited. He explained that "for vessels with length as Malkia TASAC issues a safety certificate and not seaworthiness certificate. Please find attached certificate". Three minutes later, the said Lucy Diyami responded by email at 10:14hrs bn 11th August 2022 that "this is well noted. Kindly share date and location of the claim". To this e-mail, Ramzan Omar replied at 10:16 with the following details: "Date 10/08/2022. Location Nyamisati Coast". In my settled view, the foregoing email correspondence reproduced

related to an accident involving Malkia wa Bahari Fishing Vessel at Nyamisati Channel, on 10th August 2022. The present case is all about the same incident. The 1st Defendant was the first person to be informed of the occurrence of the accident and her response never doubted the existence of the accident. It only sought more details of location. The Plaintiff supplied the details requested. The 1st Defendant was an agent of the 2nd Defendant. The second Defendant was 38 thereby notified through her agent. On 3rd October 2022 at 08:51hrs Omar Ramzan the General Manager of the Plaintiff company wrote to Neema Mathayo, an officer of the 2nd Defendant: "ONCE AGAIN!! PLEASE SHARE POLICY." This was responded to 7 minutes later by Neema Mathayo of the 2nd Defendant who wrote: "We advise you proceed to liaise with the bank for the same and for all the correspondences we shall be sharing with the bank". The 2nd Defendant is therefore on records as telling the Plaintiff that all the correspondences between the Plaintiff and the 2nd Defendant should have been made through the 1st Defendant Bank._ The notification of the accident by the Plaintiff through the 1st Defendant bank was, therefore, the agreed norm. This is understood to be a further acknowledgment of the agency relationship between the 1st and 2nd defendants and a term in the Bancassurance agreement. The second reason proving

occurrence of the accident is the fact that the 1st and 2nd Defendants are on record that they had started investigation of the accident, but eventually no report thereof was given in court. Exhibit P6 shows e-mail correspondences which involved the Plaintiff, the 1st Defendant and the 2nd Defendant on 30th September 2022. On 30th September 2022, 39 at 9:51 hrs the Plaintiff through Ramzan Omar wrote to the 2nd Defendant's Principal Officer Neema Mathayo and remarked: "I don't understand what is going on here. The broker says he has already discussed with the insurer ad we can proceed. And Britam says that we have to wait for the final report. So, what are we doing? Are we removing the ship or not? Why have not received our policies for this while cover note has been issued months ago. Can Exim and Britam put their ACTS TOGETHER, we are running short of time". The Plaintiff was desperately seeking for assistance of the 1st and 2nd Defendants to remove the ship from where it had capsized at Nyamisati Channel. If the Defendants had doubted the existence of the accident, they could have responded by saying that there was no accident involving the Plaintiff's ship Malkia wa Bahari. They could have proved the Plaintiff wrong by simply going to the location to verify the existence of the capsized ship. They could have demanded reports of the accident. They could have confirmed with

the relevant marine authorities. They never did any of that. Infact, the 1st and 2nd Defendants are on record that they had even started an investigation of the accident by sending insurance loss assessors and 40 adjusters, but the 1st and 2nd Defendants ultimately never tendered in court their own independent investigation reports to prove that they had found that no accident had occurred on the material date at the given location involving the Plaintiff's MV Malkia wa Bahari. The 1st and 2nd Defendant did not call the investigators as a witness to prove that they had done an investigation and found out that there was no accident involving the MV Malkia wa Bahari fishing vessel. The fact that the 2nd Defendant undertook an official and professional investigation over occurrence of the accident, is captured in Exhibit P6 collectively where at 10:06hrs on 30th September 2022 Neema Mathayo, Principal Officer of the 2nd Defendant wrote to one Ramzan Omar a Principal Officer of the Plaintiff Company copying the e-mail to, amongst others, Lucy Diyami and other officials of the 1st and 2nd Defendant. She wrote: Dear Omary, we would like to clarify that our last email was responding on the limit payable which for now we cannot commit as we are vet sure on the investigation findings". The above e-mail leaves no doubt that the 2nd Defendant had initiated investigation of the alleged

accident. The same fact was confirmed by DW 2 Neema Mathayo during her oral testimony in Court in cross examination 41 where she confirmed that the 2nd Defendant had initiated an investigation of the accident and had hired Bridgeway Investigators to do the investigation on the accident. She testified that: The Plaintiff did not provide documents and therefore there is no investigation report. The investigation was done by Bridgeway. They started it but they did not complete the investigation. What prompted us to send the investigator is to verify the information given to us by the client as part of the requirements." From the above quoted testimony of DW 2, the 2nd Defendant had an opportunity to investigate the accident and find the truth about its occurrence and indeed, the 2nd defendant sent investigators to investigate the accident. The evidence of the investigators could have been valuable if brought to court by the 2nd Defendant to disprove the allegations of occurrence of the alleged accident made by the Plaintiff. The Investigator could have been called as a material witness for the 2nd Defendant to show what he found upon visiting the alleged scene of accident or upon his preliminary investigations about the accident. The investigator could have said what he had found on the accident scene and whether there had been 42 an accident at all or not. The argument that

investigation could not be completed due to lack of paperwork from the Plaintiff does not bring any certainty rather than creating a legal paradox. The 2nd Defendant was supposed to call material witnesses, in the form of Insurance Investigators to refute the allegations by the Plaintiff that the accident indeed occurred. The Plaintiff had done his part by disclosing relevant details of the accident scene as Nyamisati Channel and that date of capsizing the ship was mentioned as 10th August 2022. According to the evidence of DW 2 the investigator is shown to have been sent physically to the accident scene not to the Plaintiff to take the papers. If the Plaintiff did not hand over the necessary paperwork as alleged, the Investigator could have at least written a report on what he had found at the accident scene or in alternative the 2nd Defendant could have called the investigator as a witness to testify in court on what findings he arrived at after having visited the accident scene. That material witness was not called by the 2nd Defendant. Where a party fails to call a material witness in a case, the court can draw an adverse inference that if that witness had been called to testify he could have testified against that party on that issue and therefore that party decided not to bring the witness in court. I draw adverse inference here that had the Bridgeways 43 Investigators

been brought to testify orally or by writing a report and submitting it to Court, they could have testified that there was an accident involving the MV Malkia wa Bahari fishing vessel. The other reason establishing that the accident really occurred is the content of Exhibit P8 which is the Demand letter from the Plaintiff's lawyers addressed to the 2nd Defendant and copied to the 1st Defendant. The letter shows that it was received by the 1st Defendant on 24th October 2022. It must be borne in mind that the 1st defendant was acting as an Agent for the 2nd Defendant through whom the 2nd Defendant insisted that all correspondences between the 2nd Defendant and the Plaintiff should have been channeled. Receipt of the letter by the agent constituted receipt of the letter by the Principal that is the 2nd Defendant. In that letter the Plaintiff through A&D Law Attorneys was demanding for immediate indemnification of USD 250,000 being the value and sum insured of the fishing MV Malkia wa Bahari. Paragraphs 6, 7 and 8 of the letter are relevant and I reproduce them verbatim: "6. That according to the information that was supplied to our client by your broker, you were fully informed and you were processing the claim. The 44 fact that you were aware of the accident, you sent your loss assessor and insurance adjuster to visit the place of accident so as to come up with the loss report for the purposes of indemnification.

7. That our client has been making a very dose follow up since the date of intimating the claim but there has not been any response to his efforts from the brokers. In addition to the follow up, our client went ahead and shared two letters one from the Ministry Livestock and Fisheries dated 2&h August 2022 and another letter with reference No.GA.90/258/02/40 dated 2&h August 2022 from Tanzania Ports Authority which was a notice to remove the vessel since it had blocked other vessels from the channel.

8. That unfortunate even with the above concerns, according to Broker you have decided to remain silent. Our client did not give up he went ahead to inform you that if the vessel was to be remove by the government (TPA), it would cost you a lot of money than being removed privately. But as if that was not enough, you decided to remain silent."(underlining supplied). 45 From the contents of the Demand Letter as reproduced above, it is clear that the Plaintiff was confident enough to make it be known that the marine accident involving the Plaintiff's Marine Fishing Vessel "MV Malkia wa Bahari" had occurred and that the Government Authorities had been notified or were aware and that the relevant Government Authorities had formally written to letters to the Plaintiff insisting that he should remove his vessel from Nyamisati Channel as it was blocking other vessels. The sentence 'our client went ahead and shared two letters one from the Ministry Livestock and Fisheries dated 26th August2022 and another letter with reference No.GA.90/258/02/40 dated 2&h August 2022 from Tanzania Ports Authority which was a notice to remove the vessel since it had blocked other vessels from the channel", is worth the attention of the court. If the Defendants did not believe that the accident had occurred, they had a starting point to prove the plaintiff wrong. They had been given two letters from the

Ministry of Livestock and Fisheries and the Tanzania Ports Authority which had intimated that the Plaintiff's MV Malkia Fishing Vessel had indeed capsized and it was blocking the passage by other marine vessels to Nyamisati Channel. The Defendants could have followed up with the two government authorities to fetch inconsistent reports 46 with a view to disproving the allegations made by the Plaintiff. The Defendants could have called witnesses from the two Government offices to prove wrong the allegations by the Plaintiff on the occurrence of the accident. Also, the two letters referred to in the Demand Letter refute the allegations in the written submissions of the 2nd Defendant that the accident was not reported to any authority. The truth is that two relevant Government authorities are shown via Exhibit P8 to have been aware of the accident and to have demanded the Plaintiff to remove his capsized and sunken vessel MV Malkia wa Bahari from Nyamisati Channel as it was blocking passage by other vessels. I am of the settled view therefore that, in this case, it was a common ground and a consensual understanding by the Plaintiff, the 1st Defendant and the 2nd Defendant that the accident involving MV Malkia wa Bahari had indeed occurred on 10th August 2022. The only issue was whether or not at the time of occurrence of the accident, the Plaintiff was a holder of a valid contract

of marine insurance with the 2nd Defendant. Having found that the accident had indeed occurred, like it has been said above, the issue still remains as to whether at the time of occurrence of the accident, the Plaintiff had a valid Insurance contract? To this question, the 1st Defendant conceded that the Plaintiff had a valid insurance contract as 47 proved by the Interim Cover Note Exhibit P-5. The 1st Defendant was acting as an agent of the 2nd Defendant and it was the 1st Defendant who received the premium from the plaintiff and allegedly remitted the same to the 2nd Defendant by depositing it in the 2nd Defendant's bank account. It was the 1st Defendant who issued the insurance interim cover note that could not have been issued without the involvement and authorization of the 2nd Defendant. The 2nd Defendant, however, argued that there was no valid insurance contract between the 2nd Defendant and the Plaintiff at the time of occurrence of the accident. The 2nd Defendant's learned counsel advanced some reasons which in his view make the insurance contract void. The key reasons advanced by Mr. Makaki Masatu, learned advocate and my consideration thereon follows hereunder: i) Absence of insurable interest on the Plaintiff as the Plaintiff did not tender certificate of Registry which in terms of section 29 of the Merchant Shipping Act, 2003 read together with Regulation 28 of

the Merchant Shipping (Registration of Ships) Regulations of 2005 proves ownership of a ship. I do not find this argument legally relevant. In marine insurance, proof of insurable interest must be done at the time of occurrence of the loss insured 48 against and not necessarily at the beginning of the marine insurance contract. Absence of insurable interest on the part of the insured person, at the beginning of the marine insurance contract, was not mandatory. In terms of section 4(2)(a) of the Marine Insurance Act, 1906: "A contract of marine insurance is deemed to be a gaming or wagering contract, where the assured has not an insurable interest as defined by this Act, and the contract is entered into with no expectation of acquiring such an interest. This section means that an insured/assured person who does not have insurable interest at the time of commencement of the marine insurance contract, can still enter into a valid marine insurance contract without actually possessing an insurable interest, so far as he has expectations of acquiring such insurable interest in the future. If he enters into marine insurance contract without possessing insurable interest, however, the insured must make sure that at the time of occurrence of the insured risk, he is in possession of insurable interest in the insured property before he can be entitled to indemnity. The argument by Mr.

Masatu, learned counsel, therefore holds no water. At any rate, the size of the fishing vessel owned by the Plaintiff "MV Malkia wa Bahari" was one for which the ship owner could only be issued with a licence certificate by the Registrar of Ships 49 and not a certificate of registration of a ship. The categorization of Tanzanian ships for the purposes of licencing and registration, is based on the length and tonnage of the ship or vessel. In terms of section 53(1) and (2) of the Merchant Shipping Act, 2003, every ship under 50 Gross Tonnage (GT) shall be licensed under the Act. A ship registered under the Act shall be exempted from being licensed. This means that a licenced ship is not registrable ship and a registered ship is not licensable ship. Due to its small size, the Plaintiff's ship was licenced and hence not registrable. Again, Regulation 75 read together with Regulation 2 (definitions regulation) of the Merchant Shipping (Registration and Licencing of Ships) Regulations GN No. 198/2003, categorize Tanzanian ships and vessels into those which could be registered and those which could only be licenced. Tanzanian Ships or vessels weighing less that 50 gross tonnes and measuring lesser than 24 meters are licenced not registered. Holding of the Licence certificate issued by the Registrar of Ships in one's name is therefore a sufficient proof of ownership of a small ship or

vessel under the laws of Tanzania. The Plaintiff produced a Licence Certificate issued by the Registrar of Ships as Exhibit Pl. It was issued by the Registrar of Ships on 18th February 2022 in respect of MV Malkia wa Bahari which is shown as being owned by Bahari Foods Limited (the Plaintiff 50 herein). Exhibit Pl describes the vessel to be 18 meters in length and 4 meters beam, made of fibre with a tonnage of 33 gross tonnes. Such a ship is legally, categorized as a small ship under the foregoing Merchant Shipping Act and its Regulations. Its registration in Tanzania, is by way of issuance of licence certificate and not a registration certificate. Mr. Masatu, learned counsel for the 2nd Defendant did not prove or even argue that at the time of occurrence of the accident, the Plaintiff had parted ownership with the MV Malkia wa Bahari. Further, even if the Plaintiff had parted ownership of the insured vessel at the time of occurrence of the accident, the insurance contract would not thereby be terminated or become void since insurance is a personal contract (of utmost good faith). It attaches to the person insured and not the property. Parting ownership with the insured property at the time of the accident could only render the insured person lack the requisite insurable interest in the insured property by being no longer interested in its value. ii) Breach of the principle of

utmost good faith because there was no disclosure of crucial facts of the Plaintiff not possessing seaworthiness certificate, which was one of the warranties set out in the quotation (Exhibit D6.) I find this argument to be weak. The Plaintiff could not legally possess 51 a certificate of sea worthiness for his fishing vessel MV Malkia wa Bahari which is a small ship because in law such certificate could only be issued to owners of ships not categorized as small ships. A warranty requiring a person to confirm to it in violation of the law would be void as parties cannot contract the law out by their agreement. It is a legal fact that the Plaintif's ship "MV Malkia wa Bahari" was a small ship in respect of which TASAC could only issue safety certificate and not certificate of sea worthiness. The Plaintiff tendered as Exhibit P2 a Local Safety certificate issued on 18th February 2022 by Tanzania Shipping Agencies Corporation (TASAC) at Police Marine Dar es Salaam. This certificate was in possession of the Plaintiff long before occurrence of the accident and it is the only document that could have been legally issued to the Plaintiff under the relevant laws given the small size of the Plaintiff's ship. The Local safety Certificate is with reference No. TASAC/MSE/P/QMS/804-A and shows that a surveyor named Ghadaf H. Chambo had surveyed the vessel in accordance with the regulations

under the Merchant Shipping Act (Small Ships, Local Cargo Ship Safety, Small Ship safety, Surveys and Inspection for Vessels Engaged on Local and Coastal Voyages, Inland Waters) Regulations of 2006. The inspected parts of the vessel such as Hull external and hull internal, keel, beams and floor are all 52 marked as "good" with the manning of the vessel described as "Experienced Crew." The Plaintiff also submitted this certificate by email to the 1st Defendant who is an agent of the 2nd defendant when he was asked to do so. Exhibit P7 collectively contains e-mail correspondences between the Plaintiff and the 1st Defendant who was an agent of the 2nd Defendant. The e-mail was written by the Plaintiff's General Manager to Lucy T. Diyami the Principal Officer of the 1st Defendant Company in which the Plaintiff stated: "As informed, another of our vessels has suffered sinking. Kindly start the process for the needful." The email by the plaintiff was promptly responded to by the 1st Defendant through Lucy T. Diami at 10:04 hrs on 11th August 2022 who said "we are very sorry for the loss. Kindly assist to share sea worthiness certificate so as to proceed with the process". 5 minutes later at 10:llhrs, Omar Ramzan the General Manager of the Plaintiff company responded to the email from Lucy Diyami of Exim Bank Tanzania Limited. He explained that "for vessels with length as Malkia TASAC

issues a safety certificate and not seaworthiness certificate. Please find attached certificate", (underlining supplied). Whereas under the Merchant Shipping Act (Small Ships, Local Cargo Ship Safety, Small Ship safety, Surveys and Inspection for Vessels Engaged on 53 Local and Coastal Voyages, Inland Waters) Regulations of 2006, a small ship like the one owned by the Plaintiff can only be issued with Sea Safety certificate, the 2nd Defendant insists on possession by the Plaintiff of a sea worthiness certificate, something not possible in law. The Merchant Shipping (Survey, Inspection and Certification) (Amendment) Government Notice No. 66 published on 25/1/2019, maintained the definition of a small ship that: "a small ship" means a ship of less than 24 meters in length or less than 50 gross tonnage." It is apparent that the 2nd Defendant was demanding from the plaintiff a certificate of sea worthiness in respect of a small ship owned by the Plaintiff weighing only 33 gross tonnage and measuring only 18 meters in length while the position in law is that no certificate of sea worthiness would be issuable to a small ship like the Plaintiff's MV Malkia wa Bahari. Every person is presumed to know the laws. The 2nd Defendant as an insurer who opted to provide an insurance cover to the Plaintiff's vessel ought to have known better the laws regulating the marine industry in Tanzania.

Interestingly, the 2nd defendant argued that the Plaintiff breached the duty of uberimae fidei in that the plaintiff did not fully disclose the fact that the plaintiff was not in possession of a certificate of sea worthiness in respect of the Plaintiff's small ship named MV Malkia wa Bahari. 54 This argument is against all odds. The insured's duty to disclose has limitations. The fact that the ship to be insured was a small ship, was so notorious a fact that the 2nd Defendant, as an insurer, could have it seen with the naked eyes. The Insurer had the capacity to see and know that the ship subject to the proposed marine insurance contract was a small ship and therefore it fell into the category of small ships under the law. The size of a ship measuring 33 tonnes and 18 meters in length was so conspicuous a fact that the Plaintiff needed not to disclose those patent facts and the fact that it fell into the category of small ships. The fact that small ships were not being issued with certificates of seaworthiness, was a matter of law which everyone is presumed to know and one that the 2nd Defendant, with due diligence, could have known. There was no breach of the duty of disclosure by the Plaintiff for not stating that he was not possessing a certificate of seaworthiness which, in law, it was obvious that he could not possibly possess given the small size of his ship. This is a

fact which was reasonably supposed to have been in the knowledge of the insurer (the 2nd defendant). iii) Non-payment of premium by the Plaintiff hence rendering the insurance contract void. This argument does not stand at all. Exhibit DI is a Bancassurance agreement by which the 1st Defendant acted as an agent (not 55 a broker), of the 2nd Defendant. Whereas an insurance broker might be considered as an agent of the insured person, an insurance agent is indeed an agent of the insurer. The 1st Defendant has conceded repeatedly and loudly that he received the premium from the Plaintiff in respect of the insurance cover issued by the 2nd Defendant to the Plaintiff. As it was argued by the Plaintiff's learned counsel, receipt of the premium by the 1st Defendant as an agent for the 2nd Defendant, in law constituted receipt of the premium by the 2nd Defendant as the Principal. If the Agent did not ultimately remit the amount received as premium to the Principal, it would be their own contractual issue to sort out as between the 2nd Defendant who is the Principal and the 1st Defendant who is an Agent. So far as the 1st Defendant is admitting to have received the premium for and on behalf of the 2nd Defendant, and so far as between them there is an undisputed valid agency contract, the Plaintiff was home and dry in so far as payment of the insurance premium is concerned, when he paid

the same to the 1st Defendant as an agent of the 2nd Defendant. iv) The interim cover had been suspended for want of seaworthiness certificate. This argument does not hold water as well. The suspension of the interim cover note in this case was never communicated to the Plaintiff 56 at any given time. The e-mail communication between the 1st and 2nd Defendant only shows that the suspension of the interim cover note was communicated to the 1st Defendant by the 2nd Defendant as agent and Principal respectively. Even upon the occurrence of the accident and when the Plaintiff initiated claim for compensation, the 2nd Defendant did not raise the issue of the interim cover note having been ever suspended. V) Breach of warranties stipulated in Exhibit D 6, the quotation. That the warranties therein required a certificate of sea worthiness and a restriction that the vessel should operate in fair weather only. The 2nd Defendant tendered Exhibit D7 the weather report from Meteorological Department to show that there was adverse weather condition at sea. This argument is unfounded for the reasons already explained above that in law the plaintiff's small ship could not be given a certificate of seaworthiness. The 2nd defendant as an insurer had access to inspect the Plaintiff's ship interms of its tonnage and length. Additionally, Exhibit Pl showed it all in terms of measurements and

weight of the ship. The legal position that small ships could not have been issued with certificates of sea worthiness, is presumed to have been in the knowledge of the 2nd Defendant as a prudent marine vessels insurer. The weather report from the meteorological department 57 does not show that the seas were bad or that there was a bad weather warning issued on 10th August 2022 when the marine accident involving the Plaintiff's MV Malkia wa Bahari occured at Nyamisati channel. It follows therefore that all the major grounds of attack advanced by the 2nd Defendant in an attempt to invalidate the marine insurance contract between the Plaintiff and the 2nd Defendant in this case, do not hold water. However, that is not the end of the story. Issue number 1 is still yawning for answers in this case. The issue framed by the court after consultations with learned counsel for both sides was whether or not the Plaintiff had a valid insurance contract at the time of occurrence of the alleged accident. Both sides to the case were heard on this issue. They tendered evidence, cross examined witnesses and made their written final submissions in respect of this issue, hence they were sufficiently heard on the issue and said whatever they had to say on it. However, the real gist of the issue was left "unscathed". Having framed the issue and having heard the parties on it, the court is

mandated to resolve that issue exhaustively in its proper perspective in law. In determining the issue as to whether or not the Plaintiff had a valid insurance contract at the time of occurrence of the alleged accident, it is necessary to underscore one critically important fact which appears to have 58 been underestimated by counsel for the Plaintiff, the 1st Defendant, the 2nd Defendant and the Third Party in this suit. The counsel in their submissions generalized the treatment of the alleged marine insurance contract between the Plaintiff and the 2nd Defendant in this case, like the other types or classes of insurance contracts. In law, the different classes of insurance have different legal treatment and at times the same legal principles and rules governing insurance in general, may apply differently to the different categories of insurance. The principles of insurable interest, utmost good faith, indemnity, the legal implications of an interim cover note and proof of payment of premium, for example, which were the subject of heated arguments in the case at hand, would apply differently to the different categories or classes of insurance. Actually, some of those principles do not apply to some categories of insurance at all. In this context a contract of marine insurance, like the one under consideration in the present case, stands apart from the other categories of

insurance in many respects of critical legal consequences. The different issues arising in this case therefore ought to have been dealt with without losing focus to the fact that the alleged insurance contract in question was a marine insurance contract. Perhaps the most effective way 59 to describe what constitutes marine insurance contract is by borrowing and fully subscribing to the words of the learned author Captain Bendera, I.M, in his Book titled Admiralty and Maritime Law in Tanzania, Published by Law Africa in 2017, who at page 154 of the book writes that: Marine insurance contracts cover four major types of property interest, that is, the vessel or hull; cargo; freight; and third party legal liabilities, (a) The vessel or hull insurance covers losses to the vessel itself from specified perils. This cover usually contains a geographical limitation to the trade area that the vessel trades. (b)The cargo insurance covers loss or damage to the cargo usually as specified in the Bill of Lading. (c)The freight revenue-the ship-owner or charterer may insure against the loss of revenue due to perils of the sea. (d)Third party liabilities-these may arise either due to negligence or otherwise that the ship owner or charterer may insure against." In the present case, there is no dispute that the same stems from marine insurance contract. It is an insurance contract in respect of

Marine Hull including machinery and equipment and Third party and passenger liability in respect of MV Malkia wa Bahari Shipping vessel owned by the Plaintiff. Exhibit P-5 which is the Cover Note tendered in this case shows that the 60 vessel covered is described as "Malkia wa Bahari" owned by Bahari Foods Limited (the Plaintiff). The items covered by insurance are described as_"Hull limit, including machinery, equipment" which is insured at the sum of USD 200,000.00 and "Third party and passengers liability" which is insured at USD 50,000.00. Further, Exhibit D6 (Quotation) shows that the Plaintiff was being quoted for insurance for 6 months by the 2nd Defendant from 04th April 2022 to 3rd October 2023 for the Plaintiff's Fishing Boat christened "MV Malkia wa Bahari" The quotation (Exhibit D6) has two components of the Insurance classes. For "Marine Hull Insurance," the Insured Sum is USD 200,000.00 in respect of "Marine Hull including machinery and equipment/' For the "Third party and passenger liability" the Quotation shows that the risk was insured at USD 50,000.00. Exhibit D6 further stipulates that "the territorial limit of the Marine Hull Insurance Policy shall be in Tanzanian Waters". Exhibit D6 further shows another category of insurance quoted is in respect of "personal accident covering only crew on MV Malkia wa Bahari." The insured sums are TZS 80,000,000/= for

annual earnings and TZS 25,000,000/= for medical expenses @TZS Imillion. Reading Exhibits P5 and D6, therefore, I have no doubt that the insurance contract leading to the present dispute was one for Marine Insurance. 61 Therefore, its legal treatment ought to have been focused as such. From this foundation, henceforth, I will continue to deal with the dispute specifically under the principles of marine insurance law. The issue of validity of the contract of insurance at the time of occurrence of the alleged accident should be determined alongside the law governing marine insurance in Tanzania. So, what does the law say about marine insurance contracts in Tanzania? The first port of calling is the Insurance Act, 2009. The Insurance Act, 2009 (as amended) under section 51 classifies the Insurance business into two major classes. There is long term (life assurance) and other Policies whose provisions are amply provided under Part VIII of the Act. The long term insurance business means insurance business of any of the classes specified in Part A of the Second Schedule to the Insurance Act. There is also General Insurance which consists of insurance business of any of the classes specified in Part B of the Second Schedule to the Act. I reproduce section 51 of the Insurance Act, 2009: 51.-(1) For the purpose of this Act, insurance business shall consist of long term business

or general business and the term a) "long term business" means insurance business of any of the classes specified in Part A of the Second Schedule to this Act; and. 62 (b ) "general business" means insurance business of any of the classes specified in Part B of the Second Schedule to this Act. (2) For the purpose of this Act, the effecting and carrying out the contract whose principal object is within one class of insurance business, but which contains related and subsidiary provisions within another class, or classes, shall construed as constituting the carrying on of insurance business ofthe first mentioned class, and no other, if subsection (3) or (4) applied to the contract. (3) This subsection applies to a contract whose principal object is within any class of long term business but which contains subsidiary provisions within general business Class I or Class 2 if the insurer is authorized to carry on long term business Class 1. (4) This subsection applies to a contract whose principal object is within one of the classes of general business but which contains subsidiary provisions within another of those classes, not being general classes. Marine Insurance is prescribed under Part B of the Second Schedule to the Insurance Act, 2009 alongside other general insurance businesses such as accident, sickness, land vehicles, railways, aircrafts, goods in transit, fire, motor

vehicle liability, legal expenses and the like. In particular Item No.6 on Ships describes it thus: 63 Effecting and carrying out contracts of insurance upon vessels used on the sea or inland water, or upon the machinery, tackle, furniture or equipment of such vessels. A marine insurance was broadly defined in the Indian case of New India Assurance Co. Ltd vs M/S. Hira Lal Ramesh Chand & Ors on 13 June, 2008 as follows: Marine Insurance is a contract whereby the insurer undertakes to indemnify the assured in the manner and to the extent thereby agreed, against marine losses, that is to say losses incident to marine adventure. The instrument in which the contract of marine insurance is generally embodied is called a policy. The thing or property insured is called the subject matter of insurance and the assured's interest in that subject matter is called his insurable interest. That which is insured against is the loss arising from maritime perils and casualties, and these are called the perils insured against or the losses covered by the policy. When the insurer's liability commences under the contract, the policy is said to attach; or in other words, the risk is said to attach or to begin to run from that time. 64 Now, a striking feature of the classes of insurance falling under the Part B of the Second Schedule to the Insurance Act, 2009, including marine insurance contracts

is that most of them are, additionally, regulated by specific statutes of the insurance class. The Insurance Act, 2009 of Tanzania does not have specific provisions regulating marine insurance. Like I have said, Part VIII of the Act which contains special provisions, applies to long term (life assurance) and other Policies falling under Part A of the Second Schedule. There is no Part of the Act that has special provisions concerning the general insurance classes falling under Part B of the Second Schedule including therefore marine insurance. Part XI of the Act contains general provisions applicable to both classes of long term and general insurance. The Specific provisions relating to the specific categories of general insurance business like health insurance, motor vehicle insurance and marine insurance, are to be found in specific statutes regulating those classes of insurance and they are to be read together with the general provisions under Part XI of the Insurance Act and the general principles of insurance law. As the other classes of general insurance like health insurance and motor vehicles insurance have their much known statutes, the pertinent question is, therefore, which statute particularly regulates the marine insurance business in Tanzania? None has been directly enacted by the Parliament of Tanzania. In that regard, the Judicature and Application of Laws Act

under section 2(3) comes in to fill the lacunae. It provides: 2(3) Subject to the provisions of this Act, the jurisdiction of the High Court shall be exercised in conformity with the written laws which are in force 65 in Tanzania on the date on which this Act conies into operation (including the laws applied by this Act) or which may hereafter be applied or enacted and, subject thereto and so far as the same shall not extend or apply, shall be exercised in conformity with the substance of the common law, the doctrines of equity and the statutes of general application in force in England on the twenty-second day of July, 1920, and with the powers vested in and according to the procedure and practice observed by and before Courts of Justice and justices of the Peace in England according to their respective jurisdictions and authorities at that date, save in so far as the said common law, doctrines of equity and statutes of general application and the said powers, procedure and practice may, at any time before the date on which this Act comes into operation, have been modified, amended or replaced by other provision in lieu thereof by or under the authority of any Order of Her Majesty in Council, or by any Proclamation issued, or any Act or Acts passed in and for Tanzania, or may hereafter be modified, amended or replaced by other provision in lieu thereof by or under any such Act

or Acts of the Parliament of Tanzania: Provided always that, the said common law, 66 doctrines of equity and statutes of general application shall be in force in Tanzania only so far as the circumstances of Tanzania and its inhabitants permit, and subject to such qualifications as local circumstances may render necessary. It follows therefore that marine insurance in Tanzania is specifically regulated by Common law, equity and statutes of general application in use in England on the reception date namely 22nd July 1920, The received law is applicable to the extent it has not been modified, amended or replaced by other provision in lieu thereof by or under the authority of any Order of Her Majesty in Council, or by any Proclamation issued, or any Act or Acts passed in and for Tanzania, or may hereafter be modified, amended or replaced by other provision in lieu thereof by or under any such Act or Acts of the Parliament of Tanzania. By virtue of section 2(3) of JALA, the Marine Insurance Act,1906 of the United Kingdom is applicable to govern marine Insurance business in Tanzania as a statute of general application in use in England on 22nd July 1920, the reception date. My finding is also in line with what the learned author Captain Bendera, I.M., in his book Admiralty and Maritime Law in Tanzania (supra) says at page 154 that: 67 Marine insurance practice in Tanzania is provided

by the British statute, the Marine Insurance Act, 1906. This is an Act of general application applicable in Tanzania as a received law. Therefore a study in marine insurance law practiced in Tanzania resembles the British marine insurance practice at that time. Under this Act, marine insurance is defined as a contract whereby the insurer undertakes to indemnify the assured, in a manner and to the extent thereby agreed, against marine losses, that is to say the losses incident to marine adventure. In consideration of payment of premium the underwriter agrees to indemnify the assured against loss or damage caused by maritime perils defined by the Act as perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints, and detainments of princes and peoples, jettisons barratry, and any other perils, either of the like kind or which may be designed by the policy. Under the Marine Insurance Act, 1906 a valid marine insurance contract must be embodied in policy as per section 22 thereof which provides: 68 Subject to the provisions of any statute, a contract of marine insurance is inadmissible in evidence unless it is embodied in a marine policy in accordance with this Act. The policy may be executed and issued either at the time when the contract is concluded, or

afterwards, (emphasis supplied) Commenting on the implications of the above section, an online article: Marine Insurance Act 1906 - Detailed Overview, (https://www.qian.co.in/blog/marine-insurance-act-1906-detailed- overview/) Qian Insurance Broking LLP, state that: Section 22 of Marine Insurance Act 1906 provides that a contract of Marine Insurance is inadmissible in evidence unless it is embodied in a Marine Policy in accordance with this Act. The policy may be executed and issued either at the time when the contract is concluded, or afterwards. This section makes it clear that a Marine Insurance Policy is a must for the Assured to avail protection under Marine Insurance Policy, (emphasis supplied) Marko Pavliha, in his work Overview of Marine Insurance Law, IMO International Maritime Law Institute, Malta, January 11-15, 2010 observes that: 69 The contract must be embodied in a policy: the absence of a marine policy means that the contract can only operate voluntarily without the aid and remedial powers of the courts or arbitrators, (emphasis supplied) Captain Bendera, I.M, in Admiralty and Maritime Law in Tanzania, (supra) also writes at page 162: Marine insurance policy is basically a contract where the insurer agrees to indemnify the assured in case of a loss due to a specified risk. However, although the terms can be increased, basic terms are contained in a standardized

format known as policy. Under the MIA it is stated that a contract of marine insurance is inadmissible as evidence unless it is embodied in a marine policy in accordance to the Act. This means it is only a policy made in adherence with the Act that is valid evidence of insurance in courts. Hence slips, cover notes and certificates are not acceptable, (emphasis supplied) I get similar message in reading C. H. Spurin (2002) INTERNATIONAL TRADE LAW, Chapter 8, posted in Nationwide Mediation Academy for NADR UK Ltd's online forum, that: 70 Initialling of the slip is deemed to be the conclusion of the contract with that underwriter: of importance regarding sl8,19 & 20. [Eagle Star v Sprat (1971) 2 Lloyd's Rep 116]. Although the slip evidences the conclusion of the contract vet it can't be produced in evidence until a formal insurance policy has been issued. There is no legal duty to issue a policy merely because a slip had been signed. Once the policy is issued the slip is of limited importance but it can be produced in evidence to explain certain matters regarding the insurance s89 Marine Insurance Act 1906. reference may be made to the slip or cover note in legal proceedings - to rectify some matter in the policy. It may be necessary to produce the slip to clarify the true intent of the parties for example to rectify a wrong description or to correct the policy where the risk and

its commencement is incorrect. See for example Motteux v Governor & Co of London Assurance [ 1739] Slip produced : to show that the insurance ought to have been "At and From" whereas the policy insured the subject matter "From". The slip may not contradict express terms of the policy unless it can be shown that the error was caused by a common mistake of the parties. See 71 American Employers v St Paul [1978] 1 Lloyd's Rep 417]. (emphasis supplied) In CIVIL CASE NO. 138 OF 2022 ABDULAZIZ HASSAN MBUTU VERSUS HERITAGE INSURANCE CO. (T) LTD, High Court of Tanzania Dar es Salaam sub registry, Hon. Mwanga, J., observed that: In support of his contention, the counsel cited Section 22 of the Marine Insurance Act, of 1906 to support his contention. The relevant cited provision reads; "a contract of marine insurance is inadmissible in evidence unless it is embodied in a marine policy in accordance with this Act. The policy may be executed and issued either at the time when the contract is concluded, or afterward". I have carefully examined the submissions of the learned counsel agitated before me. However, I do not agree with his contention. First, the learned counsel is reiving his submission on marine insurance laws while the present case is related to fire insurance. In my understanding Hon. Mwanga, J., refused to apply section 22 of the Marine Insurance Act in that case because the

case before him was not founded on marine insurance but rather on fire insurance. In the same vein, I would not have extended section 22 of Marine Insurance Act to fire 72 insurance or other types of insurance. However, by way of induction, deduction and analogy, I take it that had the case before Hon.Mwanga, J., been one based on marine insurance, he could have applied section 22 of Marine Insurance Act. The case before me is purely one founded on marine insurance contract and section 22 of the Marine Insurance Act, 1906 is the explicit statutory provision applicable to the issue at hand. I cannot ignore the statutory legal requirement. Exhibit P5 is not a marine insurance Policy. It is an interim cover note. All the cases cited by the Plaintiff's learned counsel related to motor vehicle insurance only and not marine insurance. Hence, they are inapplicable to the issue at hand. I find that in absence of a policy of marine insurance issued by the insurer to the insured, there can be no valid marine insurance contract between the insurer and the insured. In effect therefore, the Plaintiff and the 2nd Defendant in this case had no valid marine insurance contract despite the fact that the Plaintiff possessed an insurance cover note. The position could have been different if the insurance in question was of another category apart from marine insurance. I therefore, answer the first

issue in the negative from this perspective of absence of a marine insurance policy. It is not disputed that the Plaintiff was not issued with a Marine Insurance Policy at all times from the time when he 73 proposed for insurance to the time of occurrence of the accident. Therefore at the time of occurrence of the accident, the Plaintiff was not holding a valid (marine) insurance contract. Whereas the accident occurred on 10th August 2022, the e-mail dated 3rd October 2022 at 08:51hrs from Omar Ramzan the General Manager of the Plaintiff company to Neema Mathayo, an officer of the 2nd Defendant, shows that the Plaintiff was not yet in possession of a marine insurance policy and was still craving for issuance of marine insurance policy in vain. In that e-mail the Plaintiff wrote loudly thus: "ONCE AGAIN!! PLEASE SHARE POLICY." That confirms that the Plaintiff was never issued with a marine insurance policy by the Plaintiff. In absence of a policy, there was no valid marine insurance contract in existence. The Marine Insurance Act, 1906 under sections 23 to 26 stipulates the contents of the Marine Insurance Policy that: 23 What policy must specify. A marine policy must specify— (1) The name of the assured, or of some person who effects the insurance on his behalf.

24. Signature of insurer. 74 (1) A marine policy must be signed by or on behalf of the insurer, provided that in the case of a corporation the corporate seal may be sufficient, but nothing in this section shall be construed as requiring the subscription of a corporation to be under seal. (2) Where a policy is subscribed by or on behalf of two or more insurers, each subscription, unless the contrary be expressed, constitutes a distinct contract with the assured.

26. Designation of subject-matter. (1) The subject-matter insured must be designated in a marine policy with reasonable certainty. (2) The nature and extent of the interest of the assured in the subject-matter insured need not be specified in the policy. (3) Where the policy designates the subject-matter insured in general terms, it shall be construed to apply to the interest intended by the assured to be covered. (4) In the application of this section regard shall be had to any usage regulating the designation of the subject-matter insured. 75 To date no marine insurance policy conforming to the above terms has been issued by the 2nd Defendant to the Plaintiff. No marine insurance policy was tendered in court. In effect, the Plaintiff remained uncovered by the purported marine insurance by the 2nd Defendant throughout the period from when he proposed for marine insurance to the occurrence of the accident. The second issue was whether the defendants have breached the terms of the contract of insurance. The answer to this issue is very brief. Since there was no valid marine insurance contract between the Plaintiff and the 2nd Defendant through the 1st Defendant (also the Third party), the Defendants have not breached the terms of the marine insurance contract. The suit was founded on breach of marine insurance contract on the assumption that there was a valid marine insurance

contract. Now that it has been held that there was no valid marine insurance contract, there cannot be any breach of a non-existent marine insurance contract. The third issue was that if issue No.2 is answered in the affirmative, whether the 2nd defendant is entitled to indemnity or compensation from the 1st defendant/ 3rd party in respect of liability arising out of the alleged breach of a contract of insurance? Like the second issue, this issue cannot arise since it was conditioned on the 2nd issue being answered in the affirmative, that 76 is, it could have become relevant only if the defendants had been held liable for breach of valid marine insurance contract. The issue therefore collapses naturally. The last issue framed was to what reliefs are parties entitled? Reliefs are founded on the cause of action. The present suit was founded on breach of marine insurance contract. It has been held already in determination of issue number 1 that there was no valid marine insurance contract. It follows therefore that the Defendants are not liable for breach of contract since they could not breach a non-existent marine insurance contract. If the Plaintiff has other grievances against the Defendants herein, surely the same cannot be premised on non-existent breach of marine insurance contract as the same did not and does not exist. The claims and prayers by the Plaintiff

were premised on the presupposed existence of a valid marine insurance contract, which I have already held that it did not exist. In the premises, I dismiss this suit (which has otherwise taken longer time due to re-assignment processes), in its entirety. I grant half costs to the 1st and 2nd Defendants (not the third party as such). I award half costs on the reason that the decisive point in this case was raised by the court and not by the parties or their counsel. Also, given all the circumstances of the case, 77 parties herein might end up being engaged in other legal proceedings. If that happens, more costs will likely be incurred by both sides. In the upshot, I hereby dismiss the suit in its entirety. I grant half costs to the 1st and 2nd Defendants. It is so ordered. Mr. Timoth Mwamakimbula, learned Advocate holding brief for Mr.Dickson Sanga, learned advocate for the Plaintiff; Mr. Denis Machui learned Advocate for the 1st Defendant and the Third Party and Ms. Kulwa Shilemba, learned Advocate for the 2nd Defendant. 78