CLAUDE DAVID

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

AT PAR ES SALAAM COMMERCIAL CASE NO. 146 OF 2023

BETWEEN CLAUDE DAVID HERSSENS........................................... ...1st PLAINTIFF JONNIES LIMITED...................................... 2nd PLAINTIFF

VERSUS ASM (T) LIMITED..................................................................... 1st DEFENDANT ISAACK LEKISONGO MEIJO..................................................... 2nd DEFENDANT

RULING Date of Last Order: 08/04/2024 Date of Ruling: 14/06/2024 GONZI, J. The parties herein entered into a Sale and Share Purchase Agreement dated 27th day of July, 2016. Under the agreement the 1st Defendant was obliged to pay the Plaintiffs and the 2nd Defendant the agreed amounts in three installments. The first installment payment was to be effected by 28/10/2016 and the last payment by 28/04/2017. Allegedly, the 1st Defendant did not Honour the agreement and the Plaintiffs and the 2nd Defendant instituted civil case No.3/2021 against the 1st Defendant in the High Court of Tanzania at Arusha sub-registry. In civil case No.3/2021, the 1 Plaintiffs were three namely Claude David Herssens, Isaack Lekisongo and Jonnies Limited and the sole Defendant was ASM (T) Limited. Claude David Herssens and Isaack Lekisongo are the Directors and shareholders of Jonnies Limited. The Plaintiffs' prayers in civil case No.03/2021 were as follows: (i) Payment of USD 2,584,131 being the remaining amount for purchase of three hundred (300) shares from the Plaintiffs as a result of breach of sales agreement. (ii) Payment of USD 506,588 being interest accrued from the debt. (iii) Payment of USD 1,914,000 being calculated as 66% loss of real estate market share of business by holding the plaintiffs company documents. (iv) Interest on the decretal sum at the rate of 20% per annum from the date of

Judgment to the date of full satisfaction of the decree. (v) General damages. (vi) Punitive damages." As the contract had an arbitration clause, the Trial Court stayed civil case No. 3/2021 and issued and order referring the dispute to arbitration. 2 Despite staying the suit for seven months and a half, the arbitration proceedings were never conducted as only one arbitrator was appointed by one party to the suit while the agreement required each party to appoint its own arbitrator before the two arbitrators could appoint an Umpire. On 26th June 2022, the parties executed a deed of settlement to compromise their suit. On 7th September, 2022, the parties duly filed the deed of settlement in Court. The 1st Plaintiff, however, is now disputing the validity of the Deed of settlement on the ground that the Second Defendant herein, as director, had no mandate of the board of directors of Jonnies Limited, to sign the deed of settlement for and on behalf of their company (Jonnies Limited). Subsequent to the filing in Court of the deed of settlement, the next relevant proceedings of civil case No.3/2021 are those of 21st February 2023 which depict that the following happened in Court and I quote verbatim: "Mr. Maro: I pray to apply under Order XXIII Rule 1(1), (2)(b) which allows if there is reason for plaintiff to withdraw then the Court may allow him to withdraw the case with leave to

refHe. I pray to remind you that on 02/10/2022 it was alleged that the 2Pd Plaintiff and the defendant have reached to the agreement to settle the other Plaintiff are objection of the alleged settlement. On that ground, 3 we pray to withdraw the case with leave to refiie subject to the law of limitation." COURT: Prayers are granted, the suit is hereby marked withdrawn with leave to refiie subject to the law of limitation." That marked the end of Civil Case No.3/2021. Subsequent to that order of withdrawal of the suit with liberty to refiie, the two Plaintiffs herein filed Land Case No.33/2023 in the High Court of Tanzania at Arusha sub-registry against the two Defendants herein over the same subject matter in dispute as was in Civil Case No.3/2021.What changed was that the Second Defendant herein who was earlier on the Plaintiffs' side, changed position and was impleaded as the Second Defendant in Land Case No.33/2023. Therefore, Land Case No.33/2023 was between the same 2 Plaintiffs herein as against the same 2 defendants herein. The relevant proceedings in Land Case No.33/2023 have been attached by the Plaintiffs as Annexture PO to the Plaint. They are proceedings of 16th October 2023. It is shown that the 1st Defendant in the land case had raised a preliminary objection on jurisdiction of the Court. The Plaintiffs conceded to the Preliminary Objection and the records show

that Mr. Gwakisa Sambo, learned Advocate, on that date appeared in Court for the Plaintiffs and prayed thus: 4 "Mr.Sambo: I have been engaged recently. After going through the 1st Defendant's WSD, we pray to concede on territorialjurisdiction. Because we have conceded we pray to be spared with costs and that the matter be struck out with no order as to costs. This has been procedure in this Court and Court of appeal that whenever a person has conceded on a P/O the costs may be waived so we pray that the matter be struck out with no order as to costs. That is all. 2Pd Defendant: I have no problem. Order: The 1st Respondent is absent with no notice. So long as the Counsel for the Plaintiffhas conceded to the P/O, the matter is struck out with no order as to costs". Subsequent to the order that struck-out Land Case No.33/2023, the present suit was instituted in this Court. By way of a Plaint filed in Court on 20th November 2023, the Plaintiffs sued the Defendants praying for Judgment and Decree against the Defendants for orders that: (i) An order for declaration that the substratum of the share sale agreement executed on 27th day of July 2016 between the parties herein which were 5 to result in the Second Plaintiff transferring her all paid up shares to the First Defendant has been washed out completely and beyond repair. (ii) An Order for Declaration that the advance payments

made by the 1st Defendant has been consumed and accrued interest to date of filing this plaint and there is nothing the 1st Defendant owes the Plaintiffs and the 2nd Defendant. (iii) An Order of rescinding and or annulling the share sale agreement executed by the parties herein on the 27th day of July 2016 and return the parties to their original statues (sic) before the sale. (iv) For an order for immediate return of the second plaintiff company files and documents and a seal and the three titles to wit Title Numbers 121030, 121031 and 121032 entrusted with the 1st Defendant Company Secretary M/S Abenry Advocates in pursuance to the terms of the share 6 sale agreement, such properties be returned to the Second Plaintiff. (v) For an order that the properties comprised in Certificates of Titles numbers 121030, Plot No.l Block J, Kimbiji Dar es salaam, Certificate of occupancy Title No.121031, Plot No.2 Block J Kimbiji Dar es salaam and Certificate of occupancy Title No.121032, Plot No.3 Block J,Kimbiji, Dar es Salaam, remain lawful properties of the Second Plaintiff. (vi) For an order for payment of damages suffered by the second plaintiff for failure to trade on or developing its properties comprising in certificates of titles number 121030, 121031 and 121032 at Block J at Kimbiji Area which were meant to be acquired by the First Defendant. (vii) An Order for payment of

punitive and general damages to be paid to the Plaintiffs for the 7 suffering, stressful and painful moments spent all the way in Five years plus in an attempt to settle and see through the terms of the share sale agreement. (viii) An Order for payment of interest on the decretal amount and or from (vi) and (vii) at the Commercial rate of 9% per annum from 2016 to the date of Judgment and there after interest of the rate of 12% per annum from the date of Judgment till date of full payment. (ix) Interest and cost of the action. (x) Any other relief(s) which this Court deem fit in the circumstance of this case. The Plaint was served upon the Defendants and they filed their respective Written Statements of Defence. In the Written Statement of Defence filed by the 1st Defendant, two preliminary points of objection in law, were raised that: 8 (i) That this suit is bad in law for being time barred. The 1st Defendant shall pray this Honourable Court to dismiss it with costs. (ii) That the suit is incompetent, problematic and bad in law for inclusion of JONNIES LIMITED as the second Plaintiff while she, the 1st Defendant and the 2nd Defendant are all parties to the impugned Deed of Settlement. The 1st Defendant shall pray this Honourable Court to strike out this suit with costs. The Court ordered that the preliminary objections raised by the 1st Defendant be disposed of first and by

way of written submissions. The Plaintiff was represented by Mr. Elvaison E. Maro learned Advocate, while the 1st Defendant was represented by Mr. George Kato Mushumba, learned Advocate. Mr. Mushumba, learned Advocate for the 1st Defendant, submitted that the basis of the suit is Sale and Share Purchase Agreement dated 27th day of July, 2016. He argued that this fact is pleaded under paragraphs 5(a), (iii), 6,10(iii) and in the prayers clause, particularly, clause (i) of the Plaint. He argued that according to the annexed schedule of 9 payment as annexture PB to the Plaint, and paragraph 19 of the Plaint, the first payment was to be effected by 28/10/2016 and the last payment by 28/04/2017. The learned counsel for the 1st Defendant, therefore, argued that, going by the Plaintiff's pleadings, the 1st Defendant did not Honour the agreement and thus the cause of action arose on 28/04/2017 when the last installment was due while the present suit was filed on 20th November 2023, being after expiry of six years and six months as counted from the date of the last breach on 28/04/2017. He argued that all other claims of the Plaintiff have a root in, and emanate from, the non-observance of the sale and share purchase agreement. Mr. Mushumba, learned Advocate for the 1st defendant submitted that the suit violated Item 7 in the First Column of Part I of the Schedule to the Law of

Limitation Act, CAP 89 which has fixed the time limit of 6 years for suits founded on breach of contract. He argued that in terms of section 3(1) of the Law of Limitation Act, CAP 89, a suit filed outside the prescribed period of limitation, should be dismissed. He relied on the case of Anderson Mwankusye versus Martin Ndunguru, Misc. Land Application No.119 of 2020 decided by the High Court of Tanzania at Mbeya as an authority that a suit filed outside the prescribed period of limitation should be dismissed. 10 On the second point of preliminary objection, Mr.Mushumba, learned Advocate, submitted that the Plaintiff is complaining of deed of settlement entered. He argued that the second Plaintiff is a signatory to the Deed of Settlement and that in the plaint that fact is not denied. He argued that it is the 1st Plaintiff who is not a signatory to the deed of settlement. He argued that the way the plaint has been drafted does not show whether or not the 2nd Plaintiff is repudiating the Deed of settlement. Also, he argued that whereas the 1st Plaintiff, as one of the Directors of the 1st Plaintiff Company, is contesting the deed of settlement entered into, the 2nd Defendant who is also a director in the 2nd Plaintiff, vouches the deed of settlement as having been validly entered into by the 2nd Plaintiff Company. Mr. Mushumba, learned Advocate, argued that the 2nd Plaintiff

should have been impleaded in this suit as among the Defendants rather as one of the Plaintiffs. He argued that the 2nd Defendant, as a director of the 2nd Plaintiff, signed the deed of settlement and all the details are with the 2nd plaintiff who does not indicate whether he denies or accepts validity of the deed of settlement. He argued further that there is misjoinder in this case as the parties to the deed of settlement should have all been joined and either sue or be sued, together 11 standing in one side of the case, on the validity of the deed of settlement. He argued that as it is, the 2nd Plaintiff is actually suing himself in this case. Mr. Mushumba, learned Advocate, concluded his submissions by praying that on the basis of the first preliminary objection the suit be dismissed or alternatively, on the basis of the second preliminary objection, the suit be struck out. Mr. Elvaison Maro, learned Advocate, filed reply submissions in Court. In the reply submissions, the learned counsel for the Plaintiff submitted that as it can be gleaned from paragraphs 6, 7,19, 20, of the Plaint, the contents of which are not disputed by the 1st Defendant in her WSD, the present dispute was earlier on filed in Court on 19th day of February 2021. The Plaintiffs and the Second defendant filed Civil case No.3 of 2021 claiming for, inter alia, the balance on the purchase price. He argued

that the Civil case No.3 of 2021 was stayed by the Court upon successful prayer by the 1st Defendant and was referred to arbitration on 17th November 2021 for a period of Seven and a half months. Therefore, Mr. Maro reasoned, as the objection by the 1st Defendant in respect of time limit is that the suit was filed late by six months, and as the time limit to file a suit based on breach of contract is six years, it follows that the present suit basically was filed out 12 of time for 6 months only minus the seven months and a half. He argued that when the period of 7 months and a half, that the Civil Case No.3/2021 was stayed, is deducted, then the outcome is to render the present suit as being filed in Court before the expiry of the six years period of limitation. Mr.Maro, learned Advocate, submitted that when the period of 7 months and a half, that the Civil Case No.3/2021 was stayed by order of the Court pending referral to. arbitration, is excluded in computing the period of limitation, it would make the suit at hand as having been filed in Court at least 1 month before expiry of the six years period of limitation. Mr.Maro, learned Advocate relied on section 22 of the Law of Limitation Act, CAP 89 which provides that: "in computing the period of limitation prescribed for a proceeding the institution, continuance or conclusion of which has been stayed by injunction or order,

the time during which the injunction or order remains in force, shall be excluded." Mr. Maro, learned Advocate, argued, that since Civil Case No.3/2021 was filed in Court between the same parties herein and in respect of the same subject matter; and that later on it was stayed by order of the Court for seven months and a half to refer dispute to arbitration, it follows 13 therefore that the period that the proceedings in Civil Case No.3/2021 remained stayed and suspended, should be excluded while computing the period of limitation for the purpose of the present case. He argued that if the period of seven months and a half is excluded while computing the period of limitation, the present suit ought to have been filed by 14th December 2023 which would have marked the expiry of 6 years limitation period. He submitted that the present suit was filed on 20th November 2023, hence within the period of limitation. Mr. Maro, learned Advocate, submitted that, actually, on 8th June 2023, the Plaintiffs instituted Land Case No.33/2023 as evidenced by the proceedings of that case attached as annexture P0 to the plaint. He submitted that Land Case No.33/2023 between the same parties on the same cause of action, remained pending in Court for 131 days and, ultimately, on 16th October 2023, it was struck out. The striking out was ordered by the Court upon a successful prayer by the 1st

defendant that the Court had no territorial jurisdiction, a prayer that was conceded by the Plaintiffs. He argued that if the 131 days, spent in Court corridors, are further excluded in computation of the period of limitation, the present suit will be found to have been instituted well before the expiry of the six-year period of 14 limitation. However, Mr.Elvaison Maro, learned Advocate for the Plaintiff, submitted that as the facts relating to Land Case No.33/2023 are disputed by the 1st Defendant in the Written Statement of Defence, the plaintiff shall not rely on those facts for the purpose of the present Preliminary objections, rather the facts have just been brought to the attention of the Court. Mr. Maro submitted in alternative, that during the pendency of Civil Case No.3/2021, the parties entered into a deed of settlement compromising the suit whose subject matter was similar to the present one. He argued that a deed of settlement is essentially an agreement. He argued that the 1st Plaintiff has challenged the validity of the deed of settlement but has not raised an objections on limitation of time in respect of the same claims as they arise from the contentious deed of settlement. He submitted that when the claims herein are taken to have emanated from the Deed of Settlement executed by the parties in June 2021 and filed in Court in September 2022, the contractual

claims in the present suit will be considered and treated as having been filed in Court after about 3 years only and therefore within the 6-year period of limitation. With regard to the second preliminary objection, Mr. Elvaison Maro, learned Advocate for the plaintiff, submitted that as the 1st defendant is 15 disputing the validity of the deed of settlement, he cannot rely on it to raise a preliminary objection as that becomes a matter of evidence rather than a pure point of law. He relied on the case of Mukisa Biscuits Manufacturing Company Limited versus West End Distributors Limited (1969) pages 700 and 701, decided by the Court of Appeal for Eastern Africa, for the rule that a preliminary objection should consist of a pure point of law raised on the assumption that what is pleaded by the other side is correct. He submitted that the principle in that case has been followed with approval by the Court of Appeal of Tanzania several times like in the case of Loth Kalama versus Moshono Village Council, Civil Appeal No.95/2012. Mr. Elvaison Maro, learned Advocate referred to several paragraphs in the plaint where the 2nd Plaintiff is disputing the validity of the deed of settlement as the board of directors of the 2nd Plaintiff had not sanctioned the sale or purchase of Plot No.3 which forms the bedrock of the deed of settlement between the parties herein, except for the 2nd

Defendant. He relied on the case of Mount Meru Flowers Tanzania Limited versus Box Board Tanzania Limited, Civil Appeal No.260 of 2018 decided by the Court of Appeal of Tanzania holding that a preliminary objection cannot be raised on the basis of contested facts. 16 Mr. Elvaison Maro, learned Advocate, concluded that there is no violation of Order I Rule 1 of the CPC in joining the two Plaintiffs herein. He prayed, therefore, that the preliminary objections be dismissed with costs for being non-meritorious. The central issue for determination in respect of the 1st Preliminary Objection is whether or not the suit is time barred? The learned counsel for the 1st Defendant submitted that the suit is time barred because the alleged last breach of the Sale and Share Purchase agreement occurred on 28th April 2017 as pleaded under paragraph 10 of the plaint which indicates the schedule of payments which had been agreed upon by the parties in their contract. It is not disputed by both sides that, essentially, the suit was filed on 20th November 2023, hence, plainly and under natural course of events, about 6 months beyond the 6-year period of limitation for suits founded on breach of contracts. The learned Counsel for the Plaintiffs, however, has argued that the ordinary flow of the law of limitation should not follow its current because of four deviating factors which should be taken

to have halted the progression of the period of limitation. The first factor is that there is a period of 7 months and a half that the Civil Case No.3/2021 was stayed by order of the Court pending referral of the dispute to arbitration since 17 parties had an arbitration clause. The Plaintiffs want to have the 7 months and half excluded while computing the period of limitation in the present suit. If that can be legally done, the suit will not be time barred because the Plaintiffs had earlier on instituted in Court the Civil Case No.3/2021 very much within the period of limitation. Civil Case No.3/2021was eventually withdrawn on 21/02/2023 with leave to refile it, and that it has now been refiled. The Plaintiffs in this case rely on section 22 of the Law of Limitation Act, CAP 89 to discount the 7 months and a half when the civil case No.3/2021 was stayed in Court. The second factor advanced by the Plaintiffs' counsel, in an attempt to beat the ordinary course of the law of limitation, is that the Plaintiffs and the Defendants herein in September 2023 filed a deed of settlement in Court in respect of the dispute that was the subject of Civil Case No.3 of 2021 and which is the same like in the present case. The Plaintiffs consider the Deed of Settlement itself, as a contract between the two Plaintiffs and the 2nd Defendants herein, which constituted a new agreement between the

parties and that its terms are to be regarded as being enforced now by this suit hence the suit should not be considered time barred. The third reason advanced by the Plaintiffs to shield the present suit from the sword of the law of limitation is that although the last instalment 18 was payable by the 1st Defendant to the Plaintiffs and the 2nd Defendant on 28th April 2017, the 1st Defendant actually stopped to effect payments under the Share Sale and Purchase Agreement on 28th November 2019 whereby the 1st Defendant effected payment for the last time to the Plaintiffs and thereafter consistently defaulted. The fourth reason which the Plaintiffs' learned counsel brought to the attention of the Court is that subsequent to withdrawing Civil Case No.3/2021 with leave to refile, the Plaintiffs instituted Land Case No.33/2023 in the High Court at Arusha. Land Case No.33/2023 remained in Court for 131 days before it was struck out on a successful preliminary objection raised by the 1st Defendant that the Court had no territorial jurisdiction. If the 131 days are excluded further, the suit is not caught by the merciless sword of the law of limitation. In order to set the matter in its proper perspective and under the correct focus, the first question for determination should be ascertaining as to which agreement is the present suit emanating from? Was this suit filed to enforce the

terms of the agreement contained in the Deed of Settlement (attached as annexture PH to the Plaint) or the terms of the Sale and Share Purchase agreement? If the suit was filed to enforce the settlement agreement, which was executed by the 2 plaintiffs and the 2 Defendants 19 herein on 26th June 2022, and presented for filing in Court in Civil Case No.3/2021 on 7th September 2022, this suit will surely escape the sword of the law of limitation, but in turn, such a finding would raise entirely new and different legal issues apart from time limit issues. If the suit is to be considered as one for enforcement of the Sale and Share Purchase agreement (Annexure PA to the Plaint), then since that agreement was executed on 27th July 2016 and as the last instalment thereon was payable by the 1st Defendant to the Plaintiffs and the 2nd Defendant on the 28th April 2017, surely, naturally and ordinarily, it will be caught by the law of limitation, unless there are justifications to divert the natural course of the law of limitation from sweeping off this suit. The Sale and Share Purchase agreement (Annexure PA to the Plaint) under clauses 3.1 to 3.5 thereof read together with paragraph 10 of the Plaint stipulated 28th April 2017 as the date of payment by the 1st Defendant of the last installment under that agreement. From that date, ordinarily, the Plaintiffs were vested with a complete

cause of action as against the 1st Defendant in respect of all the three installments agreed. I am decidedly of the settled view that the agreement that the present suit is seeking to enforce is not the Settlement Agreement executed by the 20 2Plaintiffs and the 2nd Defendant on 26th June 2022 and filed in Court on 7th September 2022, rather the current suit is attempting to enforce the Sale and Purchase of Share agreement entered into by all the parties herein on 27th July 2016.1 have several reasons for this finding. The first reason is the nature of the cause of action that is explicitly stated by the Plaintiffs under Paragraph 5 of their Plaint. In describing their cause of action in the plaint, the Plaintiffs are very straight in terms of paragraph 5(i), (ii), (iii) thereof that that the present suit is based on the Sale and Purchase of shares agreement. They do not state that they are suing the Defendants for breach of the terms of the Deed of Settlement (Agreement) executed between the Plaintiffs in one hand and the 2 Defendants on the other hand on 26th June 2022. The second reason is that the validity of the Deed of Settlement is being disputed by the 1st plaintiff and herein throughout. The 1st and 2nd Plaintiff are disputing to have authorized the 2nd Defendant as a director to execute that deed of settlement. It would be inconceivable for the 2nd Plaintiff to be

relying on the disputed deed of settlement to enforce her rights against herself and the 2nd Defendant while at the same time disputing the validity of the very deed of settlement. This is, partly, the essence of the second preliminary objection by Mr.George Kato Mushumba, learned 21 Advocate for the first defendant. Thirdly, even if it were to be agreed that the plaintiffs herein were suing on the basis of the deed of settlement, that move could not be tenable nor available to them in law. This is because the deed of settlement did not end as a mere contract between the parties, but it was actually filed in Court vide Civil Case No.3/2021 in the High Court of Tanzania at Arusha on 7th September 2022. Civil Case No.3/2021, it is undisputed by both parties, dealt with the same matters in controversy like the case at hand. Therefore, if this suit was to be considered as having been brought seeking, once again, to enforce the terms of the same deed of settlement which was filed in Court, expressing their mutual and amicable final settlement of the matters in dispute between and among the same parties in Civil case No.3/2021, then the present case would automatically become res judicata as against the Plaintiffs and the Defendants herein. It would entail re-litigating over and again the same subject matter in dispute for which the same parties are involved and in respect of which

they entered into a deed of settlement and filed it in a competent Court, thereby finally determining on merit the same issues now in dispute. Filing the deed of settlement in Court, transformed it into consented judgment and decree upon endorsement by the Court and now it forms part of record in Civil Case 22 No.3 of 2021 in the High Court of Tanzania at Arusha Sub-registry. Fourth, if the Plaintiffs or the 2nd Defendant do not recognize the validity of, or are not happy with the terms of, the deed of settlement filed in Court, they were supposed to challenge the consent judgment and decree emanating from that deed of settlement rather than suing each other afresh on the basis of the deed of settlement itself. Fifth, to cap it all, if the suit were based on the breach of the terms of the deed of settlement, it could be a non-starter since the deed of settlement culminated into and ultimately was superseded by the Court order allowing the Plaintiffs to withdraw the suit with leave to refile. Effectively, in the place of deed of settlement, there was a Court order replacing it. If the Court order was entered as a result of the deed of settlement filed in Court, it is the Court order incorporating the terms of the deed of settlement that is enforceable by the Plaintiffs and not the deed of settlement itself any longer. The present suit, therefore, for all practical purposes was

plainly not filed to enforce the Deed of Settlement executed on 26th June 2022 and filed in Court on 7th September 2022. The suit at hand is for all purposes, patently, one emanating from, and seeking enforcement, of the Sale and Purchase of shares agreement of 27th July 2016. I find that the effort by the learned counsel for the Plaintiffs to peg the cause of action 23 in this suit to the Deed of settlement, a purported cause of action which legally, would not be available to the Plaintiffs as against the Defendants herein, was an unnecessary attempt at escaping from the Plaintiff's own shadow. At best it only operated to mystify the cause of action in this suit making it liminal between and betwixt the Sale and Purchase of shares agreement of 27th July 2016 and the Deed of Settlement executed on 26th June 2022 and filed in Court on 7th September 2022. Looking at the case from the true perspective of the Sale and Purchase of shares agreement of 27th July 2016, the suit appears to be time barred as it was filed after the expiry of the period of limitation by 6 months. The time is calculated from the date the cause of action arose. There were three installments in the contract. The 1st Defendant was allegedly in a continued breach of the three installments. For each instalment, when it became due but not paid for by the 1st Defendant, a separate cause of action arose in favour

of the Plaintiffs and the 2nd Defendant as against the 1st Defendant, and immediately the period of limitation started to run in respect thereof. Section 7 of the Law of Limitation Act, is relevant in this regard. As the last installment under the Sale and Purchase of shares agreement of 27th July 2016 was payable on 28th April 2017, but the same was not paid, the period 24 of limitation for the latest cause of action started to run on 28th April 2017. The Plaintiffs' learned counsel argued that time should start to run from the date that the 1st Defendant effected the last payment to the Plaintiff under the agreement and that was on 28th November 2019 whereby the 1st Defendant effected payment for the last time to the Plaintiffs and thereafter consistently defaulted. I do not accept that argument. Section 5 of the Law of Limitation Act, CAP 89 is clear that the right of action in respect of any proceeding, shall accrue on the date on which the cause of action arises. In terms of section 4 of the Law of limitation Act, CAP 89 the period of limitation prescribed by the Act in relation to any proceeding shall commence from the date on which the right of action for such proceeding accrues. On every due date of payment where payment was not done by the 1st Defendant, a right of action arose to the Plaintiffs and 2nd Defendant against the 1st Defendant in terms of their contract of

Sale and purchase of shares. Therefore, for practical purposes, as the three installments were set at intervals, the latest date on which the period of limitation in this suit started to run was 28th April 2017 while the present suit was filed on 20th November 2023 after the lapse of about 6 years and 6 months. 25 I will now consider the Plaintiffs' arguments why the period of limitation should not be calculated ordinarily in this case as to make the suit time barred as it appears on the face of it. As the grounds related to Deed of Settlement and date of accrual of the right of action, have already been addressed, the Plaintiffs have two remaining grounds in this regard. The first is exclusion of 7 months and half under section 22 of the Law of Limitation Act, CAP 89 when their Civil Case No.3/2021 was stayed by the Court pending referral to arbitration. The second one is exclusion of 131 days during which the Plaintiffs and the Defendants were in Court proceedings in Land Case No.33/2023 which was ultimately struck out for want of territorial jurisdiction by the Court. Did the period of limitation for the institution of the present suit legally stop to run at any time because of pendency of the civil case No.3/2021? To answer this question, the fate of Civil Case No.3/2021, should be glanced at. The proceedings of Civil case No.3/2021 which it is undisputed that it involved

the same parties herein for the same subject matter in controversy, dated 21st February 2023, indicate that the suit was withdrawn under Order XXIII Rule 1(1),(2) (b) of the CPC and subject to the law of limitation. It is trite that when a suit is withdrawn with leave to refile, under that provision, 26 the period of limitation does not stop to run and the refiling of the suit will only be subject to the law of limitation. The leave to refile only operates to make the suit not res judicata when, and if, it is eventually refiled but not to stop the hands of clock for the purposes of the law of limitation. Record of proceedings in civil case No.3/2021 for 21st February 2023 depict the following and I quote verbatim: "Mr. Maro: I pray to apply under Order XXIII Rule 1(1), (2)(b) which allows if there is reason for plaintiff to withdraw then the Court may allow him to withdraw the case with leave to refile. I pray to remind you that on 02/10/2022 it was alleged that the 2Pd Plaintiff and the defendant have reached to the agreement to settle the other Plaintiff are objection of the alleged settlement. On that ground, we pray to withdraw the case with leave to refHe subject to the law of limitation." COURT: Prayers are granted, the suit is hereby marked withdrawn with leave to refHe subject to the law of limitation." This means that the Plaintiffs counsel while withdrawing Civil

case No.3/2021 with leave to refile was aware that the suit would be withdrawn subject to the law of limitation in the event of refiling the suit withdrawn. 27 However, Mr.Maro, learned Advocate for Plaintiffs has submitted that even if the refiling was subject to the law of limitation, when the period of 7 months and half of the Court order staying the proceedings pending referral to arbitration in the Civil Case No.3/2021 is discounted, this suit falls within the prescribed time of limitation. I proceed to consider that argument. The legal basis for Mr.Maro making that argument is section 22 of the Law of Limitation Act. Section 22 of the Law of Limitation Act, CAP 89 provides that: "in computing the period oflimitation prescribed for a proceeding the institution, continuance or conclusion of which has been stayed by injunction or order, the time during which the injunction or order remains in force, shall be excluded." The learned counsel for Plaintiffs has argued that Civil Case No.3/2021 was stayed pending referral to arbitration and hence the plaintiffs are entitled to benefit under section 22 of the Law of Limitation Act by that period of stay being excluded in computing the period of limitation. I have considered the above provision in light of judicial interpretation of a similar provision in the Limitation Act of India, of 1877 which had a similar provision under

section 15 providing that: 28 "In computing the period oflimitation prescribed for any suit, the institution of which has been stayed by injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn shall be excluded." (The 1963 Indian Limitation Act, has a similar provision under section 15(1) thereof but a slightly different content). The rationale and scope of that provision was explained in the case of Kandaswami Pillai vs Kannappa Chetty Alias Arunachala, AIR 1952 MAD186 that: The term "period of limitation" means the time prescribed by law at the end of which a right ceases to be enforceable in a Court whether by a suit or application. Some provisions of law not only bar rights of action after the lapse of a prescribedperiod but even extinguish rights and title altogether. But the common features of all statutes of limitation is that they ax a certain period after the expiry of which an action is not maintainable....If by an act of Court over which the decree-holder has not control he is prevented from recovering the fruits of his decree during the full period of twelve years, It appears to me to be highly unreasonable that by the mere lapse of twelve years from the date of the decree, his 29 rights should become extinct rights which he was prevented from enforcing for a part at

least of the period of twelve years. It is clear from the above case that the section has been interpreted as referring to exclusion of the period where there is an order of stay of execution of a decree for the purpose of counting the 12 -year time limit within which a decree should be executed. The section has not been interpreted as referring to stay of a suit pending referral to arbitration. In the case of PEAREY LAL and Another Versus KRISHAN SARUP and Another, PUNJAB SERIES [VOL. XVI-(2) page 598 it was held that: "As stated in Chitaiey's Limitation Act (3rd Edition), Volume I, page 524, the words "stayed by an injunction or order" have reference to an order of a Court and not to a disability to sue or to apply arising from the other causes..... section 15 is not confined to cases of direct stay or injunction, but also applies to orders which indirectly, but very proximately and, effectually, cause a stay. In order to determine whether execution has been staved, the substance (and not the mere form) of the order must be looked at. In other words, the Court must ascertain whether 30 the execution of the decree has in effect been stayed." Under the doctrine of precedent and stare decisis, it is desirable that similar provisions of the law should be interpreted in a similar way. I am persuaded to interpret the provision of section 22 of the Law of Limitation Act of Tanzania

CAP 89 in line with its counterpart in the Indian Law of Limitation Act from which our law traces its origin. It goes without saying therefore that the staying of the case envisaged under section 22 of the Law of Limitation Act of Tanzania which the Plaintiffs have relied upon, does not exclude the period of stay of a suit by the Court pending referral of the dispute to arbitration under section 15 of the Arbitration Act, as it was the case in Civil Case No.3/2021. In a further attempt to understand the applicability of section 22 of the Law of Limitation Act, CAP 89,1 consulted yet another decision interpreting section 15 of the Indian Law of Limitation Act, the version of 1877. In Hulas Singh.v. Data Ram (A.I.R. 1943 All. 291), Iqbal Ahmad, C.l, delivering the judgment of the Bench observed as follows:- "A mass of case law has clustered round section 15. It has been held in a series of cases that section 15 31 applies only to those cases in which the institution of a suit has been directly or indirectly stayed by an order of a Court and does not apply to cases where the institution of a suit or other proceedings is forbidden by a statute: It has, however, been laid that there need not be a direct order by a Court staying the institution of a suit and it is enough if such an order is implied. In other words, section 15 is applicable to cases in which either as a direct or

as an indirect consequence of an order of a Court a plaintiff is debarred from instituting a suit. Before the amendment introduced by Act 11 of 1939, the institution of a suit by a creditor, after the Collector had passed an order under section 6, Encumbered Estates Act, was absolutely barred by clause (b) of section 7. It follows that after an order by the Collector under section 6, no creditor could, during the pendency ofproceedings under the Encumbered Estates Act, institute a suit for the recovery of the debt due to him from the landlord. The direct consequence of an order under section 6, was, therefore, to bar the institution of a suit by a creditor. It is, therefore, correct to say that the Collector's order in the present case was tantamount to an order staying the institution of a suit by the plaintiffs. In this view of the matter the order of the 32 Collector under section 6 attracts the provision of section 15, Limitation Act, and the period intervening between the date of that order and the conclusion of the proceedings under the Encumbered Estates Act, must, therefore, be excluded in the computation of the period of limitation fora suit by a creditor. The foregoing authority is clear that section 22 of the law of limitation Act is applicable to cases in which either as a direct or as an indirect consequence of an order of a Court, a plaintiff is debarred from

instituting a suit. Reading the two cases above, it can be said that section 22 of the Law of Limitation Act CAP 89 applies to exclude the period of limitation where either as a direct or as an indirect consequence of an order of a Court a plaintiff is debarred from instituting a suit and where execution of a decree has been stayed by direct Court order of stay or by injunction, or where there is an order which indirectly, but very proximately and, effectually, causes a stay of execution of a decree. The plaintiff's case in Civil Case No.3/2021 was not barred by Court order of stay or injunction from being instituted in Court. Actually, the Plaintiffs were able to institute that case and ultimately, they withdrew it. The Plaintiffs in the present case, in which the preliminary objection has been raised, were 33 not debarred by any Court order directly or indirectly from instituting this suit against the Defendants. The institution, continuance or conclusion of their present case has never been directly or indirectly stayed by Court order staying execution or by injunction actually there is no decree yet to be executed. Section 22 of the Law of Limitation Act cannot be resorted to salvage the situation at hand and exclude the period of seven Months and a half during which the Court referred the matter in Civil Case No.3/2021 to arbitration. The alleged period of 7 months and a

half therefore cannot be excluded in computing the period of limitation for filing the present suit which was otherwise, filed out of the prescribed time. From another angle, and for the sake of completeness, it is strange that whereas the Plaintiffs are arguing in essence that the Court order of stay of proceedings pending referral to arbitration prevented them from filing the present suit on time, their own records refute this allegation, factually. The Plaintiffs filed Land Case No.33/2023 in the High Court of Tanzania at Arusha against the same Defendants over the same subject matter in dispute. Land Case No.33/2023 was between the same 2 Plaintiffs herein against the same 2 defendants herein. The relevant proceedings in that case have been attached by the Plaintiff as Annexture PO to the Plaint. They are 34 proceedings of 16th October 2023. It is shown that the 1st Defendant had raised a preliminary Objection on jurisdiction of the Court. The Plaintiffs conceded to the Preliminary Objection and the records show that Mr. Sambo, learned Advocate, on that date appeared in Court for the Plaintiff and prayed thus: "Mr.Sambo: I have been engaged recently. After going through the 1st Defendant's WSD, we pray to concede on territorialjurisdiction. Because we have conceded we pray to be spared with costs and that the matter be struck out with no order as to costs. This has been

procedure in this Court and Court of appeal that whenever a person has conceded on a P/O the costs may be waived so we pray that the matter be struck out with no order as to costs. That is all. 2nd Defendant: I have no problem. Order: The 1st Respondent is absent with no notice. So long as the Counsel for the Plaintiff has conceded to the P/O, the matter is struck out with no order as to costs". 35 In my settled view, therefore, the proceedings in Land Case No.33/2023 presented by the Plaintiff as "annexture PO" to the plaint, are to the effect that the plaintiffs had utilized their right to refile the withdrawn suit (Civil Case No.3/2021) after it had been withdrawn, even before instituting the present suit. The present suit was filed after the immediate past similar proceedings in Land Case No.33/2023 were struck out. It is not true that the present proceedings were filed subsequent to the withdrawal of Civil Case No.3/2021 with leave to refile. By refiling their withdrawn Civil Case No.3/2021 as Land Case No.33/2023 the Plaintiffs utilized and exhausted that right. Also, it should be noted that the land case No.33/2023 was struck out. When it was struck out, in law, again, time did not stop to run against the Plaintiffs. The consequence of a suit being filed after expiry of the period of limitation was stated in Mathew Martin versus Managing Director Kahama Mining

Corporation, Civil Case No.79 of 2006 the Court held that: "However unfortunate it may be for the petitioners, the Law ofLimitation on actions knows no sympathy or equity. It is a merciless sword that cuts across and deep into those who get caught in its web." 36 The present case faces a similar doomed fate. Section 3(1) of the Law of Limitation Act provides that: "Every proceeding described in the first column of the Schedule to this Act and which is instituted after the period of limitation prescribed therefore opposite thereto in the second column, shall be dismissed whether or not limitation has been set up as a defence." In the end, I sustain the preliminary objection raised by the 1st Defendant and find that the present suit was filed outside the prescribed period of limitation. I hereby dismiss the suit with costs. With this outcome of the first preliminary objection that finalizes the case at hand, it is not necessary to consider and determine the second preliminary objection on misjoinder of the 2nd Defendant. It is so ordered. 14/06/2024 37 Ruling is delivered in Court this 14th day, of June 2024 in the presence of Mr. Gwakisa Sambo, learned Advocate for the Plaintiff and Mr. George Kato Mushumba and Ms. Mercy Kassa, learned Advocates for 1st Defendant and in absence of the second Defendant who was duly notified of date of Ruling. A. H. GONZI

JUDGE 14/06/2024 38