20040102 TZHC Dar es Salaam

IN THE HIGH COURT OF TANZANIA AT DAR ES SALAAM MISC CIVIL CAUSE NO 135 OF 95 BLUE LINE ENTERPRISES LIMITED ....•...... APPLICANT VERSUS E.A. D. B... ..... ■ ■• ■ ■ ••••••••••••••• ■ 11 ■ ••••• ■ .I ••••••••••• RESPONDENT RU LING Ihema, l On 21 st October, 2002 East African Development Bank, hereinafter referred to as the applicant/Judgement/Debtor filed a Chamber Summons as a reference pursuant to Rule 5(2) of the Advocates Remuneration and Taxation of costs Rules 1991 and Section 95 of the Civil Procedure Code 1966 praying that:- (a) The decision of the Taxing Officer dated 24th October, 2001 be nullified for being baseless, excessive, unreasonable and unfair. (b) Costs of the application be provided for The application is supported by the affidavit of Victoria Lyimo Makani Learned Advocate for the applicant. At issue is the ruling of the taxing 1 ..., - -~. . .. t;.. .-<•. ,J ,.,.,.. :--,. •. '•, • officer Hon. Mutungi DR. dated 24th October, 2001 which taxed the bill of costs in favour of M/5 Blue Line Enterprises at T.Shs 114,720,120/= to be paid by the applicant/Judgement debtor. It is deponed by Mrs. Victoria Lyimo Makani learned advocate for the applicant inter-alia, there was no justification for the Taxing Officer to award costs in the sum of Tshs. 114,720,120/= because (1) the matter before the Court was a mere application to refer the dispute to arbitration . and (2) the reliefs sought were declaratory whereby the value of the subject matter was not at issue in the application/petition. In reply Mwezi Mhango Learned Advocate for the Respondent/decree holder has opposed the application for the reference. Counsel were granted leave to dispose of the application for reference by way of written submissions and I am grateful for counsel's lucid submissions. I think it is pertinent to state albeit briefly the history which has given rise to the reference under consideration. On ih March, 1990 the applicant and the respondent concluded a loan agreement amounting to Special Drawing Rights -SDR 1,924,000/= with elaborate terms and conditions. On 29th June 1992 the parties signed a supplementary loan agreement for SDR 355,000/= by way of a .supplemental debenture. Clause 8.03 of the Loan Agreement dated ih 2 March, 1990 provides that"any dispute or difference touching on the meaning of the Agreement, the rights or obligations of the parties or any other matter or thing in connection with this agreement shall be subject to arbitration in Dar Es salaam Under the provisions of the Tanzania Arbitration Ordinance or any statutory modification or re enactment thereof for the time being in force". In the course of implementation of the Loan Agreement a dispute arose and the decree holder/respondent requested for the matter to be referred to arbitration, but the applicant/Judgement - debtor moved for receivership, whereat a petition was filed to seek orders of the Court to comply with the provisions of Clause 8.03 of the Loan Agreement. It is on record that the petition was granted and a sole arbitrator was appointed, but this was after a series of litigations in the High Court between November, 1995 and January, 2001. It is quite . evident in my humble view that the subject matter of the petition is the Loan Agreement which amounted to US$ 12,877,437.00. It is further on record that at the termination of the proceedings ending with the grant of the petition to appoint a sole arbitration to deal with the dispute on the Loan Agreement the respondent/Judgement creditor presented a Bill of Costs claiming a total of Tshs 114,991,465/56 out of which Tshs 114,351,640/56 was itemized as instruction fees pegged at 1% of the subject matter i.e. the Loan Agreement. Argument in support of the itemized costs was to the effect that the scope of instruction fees was intended to cover among other things, the attendance of the 3 .' \ counsel when he takes his clients instructions, all his work in looking up the Law and preparing the case for trial etc. On its part the applicant/Judgement debtor vehemently opposed the item on the instruction fees as being fictitious and exorbitant for the reasons that the amount of USD 12,877,437/= could not have been the basis for determining instruction fees in a petition where no amounts of . money was pleaded. It was the case of the applicant/Judgement-debtor that the amount was exorbitant due to the fact that the right provision was rule 40 U) and not l(h) prescribing a minimal instruction fee of T.Shs 3100/= (subject to the taxing officer's discretion under the proviso to the said paragraph. In his ruling dated 23 rd October, 2001 the subject matter of the present reference under consideration, the Taxing Master (Hon. FSK Mutungi - DR) taxed the Bill of costs at T.Shs. 114,720,120/= pegging the instruction fee at T.shs 114,351,640/56 which he termed to be reasonable and fair. Subsequent to this decision the applicant/judgement debtor on · 25 th October, 2001 filed a Notice of Objection with intention to refer its objection for a decision of a Judge of the High Court in terms of Rule 5(2) of the Advocates' Remuneration and Taxation of Costs Rules 1991 among others. This was eventually done on 21 st October, 2002. As stated earlier on the thrust of the applicant/judgement debtors contention is that there is no basis upon which the instruction fee could be 4 computed and assessed for lack of value of the subject matter in the proceedings in the High Court since the petition before the High Court was · not based on a pecuniary value. The reliefs sought in the petition were for orders to appoint a Sole Arbitrator and not otherwise notwithstanding the interlocutory application that arose there from. Furthermore the applicant/Judgement debtor contends that interms of the arbitration rules, 1957, a petition filed under the said Ordinance is an application and for purpose of taxation is governed by paragraph lU) Scheduled XI of the· Rules. I must say the applicant/Judgement debtors argument is quite narrow hence oblivious of what rules 5 and 12 provide as correctly pointed out by Mr. Mhango learned advocate for the respondent/Judgement creditor. The two rules do provide and I quote. " Rules 5. Save as is otherwise provided all applications made under the Ordinance shall be made by way of petition" This is to say the rule provides for the procedure to be followed in filing of a petition and not an application (emphasis is mine). " Rule 12(1) fees shall be payable in respect of proceedings under the Ordinance in accordance with the table of fees payable for similar proceedings in civil suits in the Court, as near as circumstances will permit and if any doubt arises as to 5 .... the correct fees payable, the decision of the Registrar in that shall be final. (2) For purposes of paragraph (1) of this rule, a petition shall be deemed to be a plaint." It follows in my considered view that the clear provisions in sub-rule · 2 of Rule 12 put the argument that the petition filed is not an application beyond doubt. It is rejected. As regards the contention that there is no value of the subject matter in the proceedings in the High Court, I would like to join hands with Mr. Mhango learned counsel and affirm my earlier finding that it is more than evident that the subject matter of the petition to be referred to arbitration is the loan agreement in its totality. It is therefore idle for Mr. Makani learned advocate to contend otherwise. The next point for consideration is the quantum for the bill of costs as instruction fee taxed at TZS 114,351,640/= calculated at 1% of USD 12,877,437/=. It is argued by learned counsel for the respondent that 1991 Advocates Remuneration and Taxation of costs Rules Schedule IX puts the fee chargeable at a percentage of the subject of the subject matter, whereat a subject matter above 3,000,000/= the fee is 3%. 6 Like the Taxing officer, I hold the view that the proceedings to which . the bill of costs relates hav~ a pecuniary value and the Taxing Officer on the facts before him found in his discretion the instruction fee pegged at 1% of the subject matter to be reasonable and fair. Likewise on the evidence on record before me and the submissions presented I will uphold the bill of costs taxed by the Taxing officer to be fair and reasonable and I confirm it. . In the event the application by applicant/Judgement debtor is dismissed with costs. I order accordingly. S. Ihema JUDGE Court: Ruling delivered in Chambers today ih May, 2003 before Mrs. Makani and Mr. Mhango learned counsel for the parties Mrs. Makani: My Lord I pray for the leave to appeal to the Court of Appeal. Court: Let there be a formal application for leave to appeal 7 S. Ihema · JUDGE 7.5.2003 Coram: Ihema, J Upori reading application for execution of decree dated the 8th · day of May, 2003 and filed in this Court on 8th day of May, 2003 applying for attachment and payment of the Judgement Debtor's Account No. 6901000034 or any other account with the National Bank of Commerce, Corporate Branch, Dar Es salaam. Order: Let execution of decree to issue as prayed. S. Ihema JUDGE th 8 May, 2003 Coram: S.A. Lila - DR Upon reading a letter from Bwahama & Company Advocates dated the 25th day of September, 2003 and received by this Court on 25th day of September, 2003, requesting for release of the sum of T.Shs 116,000,000/= deposited in this Court and be paid to M/S BLUE LINE ENTERPRISES LIMITED. 8 .- . Order: Let the sum of Tshs 116,000,000/= deposited in this Court vide E.R.V. No 1789917 dated 30th day of May,· · 2003 be released and paid as follows:- . 1. M/5 Blueline Enterprises Limited Tshs. 115,995,000/= 2. Court Commission Tshs. 5,000/= Total. .. Tshs. 116,000,000/= (S.A. Lila) DISTRICT REGISTRAR 7/10/2003 Coram: Ihema, J Upon going through the record and upon reading application for Execution of decree which is filed herein dated the 31 st day of October,2003, applying for attachment of T.Shs 39,503,497/26 Account No. 6901000034 or any other Account with the National Bank of Commerce, Corporate Branch, Dar Es salaam. Being the amount remaining unpaid from the Total Balance of Tshs. 155,503,497/26 as per orders of this Court dated 8th May, 2003 \ and 8th May, 2003. 9 Order: Let attachment to issue as prayed and the claimed Amount be paid to the Registrar High Court of Tanzania, Dar Es salaam. S. lhema JUDGE 7/11/2003 2.1.2004: Coram: Ihema, J Parties Absent Order:· Hearing on 25/03/2004 Parties to be notified. S. Ihema, JUDGE 2/1/2004. I certify that this is the true copy of the original DISTRICT REGISTRAR 10