20120323 TZHC Dar es Salaam

., 1 lN THE HIGH COURT OF TANZANIA AT DAR ES SALAAM CIVIL CASE NO. 106 OF 1998 COVELL lVIATTHEWS PARTNERSHIP . . . . PLAINTIFF VERSUS 1~ANZANIA RAILWAYS CORPORA'rION ~ . . . DEFEND.A.NT Dede of last order- 16/12/2012 Date of Ruling-23/3/2012 RULING Sban~r~, J. This is a long time case. It was presented for filing on 20 th April., .1998. The s1.,1it was ready for hearing on 30 th April, 2007 v11hich is abol1t five years ago. Since then to the present date, the plaintiff co1npany has been struggling for reliefs arising from its contract with the defendant but in va1n. I • 2 On 3 rd August, 2011, Mr. Kalolo for the plaintiff prayed to arnend the plaint as the plaintiff company seized to exist and its assets shifted to Rail Assets Holding Company u.nder SS 5 & 6 of the Railvvays Act No. 4 of 2002. The prayer was granted. Consequently, the pleadings were accordingly amended. In its amended \Vritten state1nent of Defence vvhich was presented for filing on 12 th September, 2011, counsel for the defendant Mr. George Kiliri.du gave a notice of prelin1inary objection against the hearing of the suit on tl}e following grounds:- 1. That the action is barred by virtt1e of S.87 (b) of the Tanzania Railways Corporation Act Cap. 170 R.E. 2002 due to the fact that it "\Vas ncJt brou.ght· within 12 1nonths from 18 th 1..July, 1996 \,vb.en the alleged amount of money was claimed and ~ras to be paid. 3 2. That the signatories purporting to sign the contract referred to in the plaint had no pov;rer in terms of the Tanzania Railways Corporation Act to sign the contract. 3. That the Agreen1.ent referred to in the plaint was an Agreement for an investment in respect of which no approval has been granted as required by S.26 (3) of the Tanzania Railways Corporation Act. 4. That the Agreement referred to in the plaint is unstamped contrary to the provisions of the Stan:i-p Duty Act Cap. 189 R.E. 2002. 5. That the A.gree1nent referred to 1n the plaint 1s unregistered contrary to the Registration of Documents Act Cap. 117 R.E~ 2002. · 6. That contrary to the·terms of the Agreement referred to in the plaint this disp·ute has not been referred to 4 Arbitration precedent to con1mencement of this action. I have gone through this court's record and found that the above m.entioned points of prelin1inary objection were raised in the Written Statement of Defence filed by the defendant's predecessor namely Tanzania Railways Corporation on 24 th June, 1998. The defence counsel by then was Mr. P. C. Bakilana, Advocate. Those points of prelin1inary objection were argued by way of v.rri tten submissions and this cou.rt the late l(atiti, J. wrote a ruling and delivered it on 22 nd ,July, 1999. In his ruling, Kati ti, J. considered one point of prelintinary objection only. That is as to ·whether or not the dispute had been referred to Arbitration prior to corr1ing to this court. After finding that the dispute had not been referred to Arbitration in accordance with Article 16 of the Consultancy Agreement entered into by the parties on 18 th 5 August, 1995 Katiti, J. stayed the proceedings pending the Arbitration process. Article 16 of the said Agreement provides as fallows and I quote:- ."Article 16 ARBITRATION. Any disp11te or difference arising 011.t of this 1\greement whether before or after its termination shall be referred to the Arbitration of a person to be nrutually agreed upon or failing agreement, of some person appointed by the National Construction Council of Tanzania." Learned counsel for the plaintiff, Mr. Kalolo submitted that the objections were previously raised and overruled and that retrying them today is an ab1J.se of the court process as they are now res judicata in terms of S. 9 of the Civil Procedure Code Cap. 3.3 R.E. 2002. Upon reflection that various points of objection were not covered in the 6 ruling delivered by Katiti, J. l\1r. Kalolo contended that it· was up to the defendant to put it to the attention of the court so that it may prepare a ruling in respect of the unruled preliminary objection rather than re--raising them in the .(l\mended Vlritten Statement of Defence. From lVIr. Kalolo's contention above, it can be concluded that he concedes that various ,points of preliminary objection which were raised in the previous "'ritten Statement of Defence and re--raised in the Amended Written State1nent of Defence are not res judicata e~cept one point which relates to the req1.1irerrl.ent to refer the .,.. dispute to arbitration. In his reply, Mr. George Kilind.u subn1itted that this court may rely on the earlier sub1nissions filed by the parties to determine the points of preliminary objection that were not covered in the ruling by the late Katiti, J. so that it may satisfy itself as to whether or npt the plaint vvas 7 filed ,¥ithin the period of 12 months as provided by S.87 of the Tanzania Railways, Corporation Act Cap. 170 R.E. 2002. Whereas I agree ,¥ith Mr. George Kilindu that various points of. preliminary objection raised in the previous written staternent of Defence as well as in the Arnended Written Statement of Defence were not covered 1n the ruling of ICatiti, J. Delivered on 22 nd July.~ 1999, I do· not think that it is proper for this court to consider them even now.' This is because the matter so far has not been referred to Arbitration as ordered by Kati ti, J. in his ruling which was given over eleven years ago or so. I am quite aware that this court was informed by fv1r. l{alolo through his letter dated 10th April 2002with Ref. CC/ 1161 / 97 ~JK addressed to the Registrar rligh Co11rt of Tanzania, Dar es Salaam that Arbitration has failed. In order to sho~N that Arbitration has failed, Mr. Kalolo did not 8 produce any proceedings by the Arbitrator in vvhich it is shown that Arbitration has failed, instead, he based on a letter by PC Bakilana dated 3 rd March, 2000 addressed to the plaintiff wherein P.C. Bakilana asserts that the contract which was entered into between the parties is not valid and that as the contract is not valid there is no valid dispute to refer to Arbitration. It is plain therefore that the dispute has not yet been referred to Arbitration in accordance with Article 16 of the Consultancy Agreernent entered into by the parties on 18 th August, 1995. In my op1n1on, Mr. P.C. Bakilana had no moral authority to-assert that the contract between the parties is invalid action has ever been taken to rescind it and it rnust be understood that the only authority to decide on the validity of the contract between the parties is a. court of law and not any one else. As far as this court is concerned, the 9 Consultancy Agreement between the parties is valid and is binding upon the parties. It shall contin·ue to be binding upon them until when it will be invalidated by a court of law in case it will be called upon to do so by the defendant. The position in this case is that the defendant has no choice but to submit to Arbitration. Moreover, the defendant is the one who prayed the colJ.rt ·am.ong other things to strike out the suit as the dispute arisin.g out of I -: the Consultan.cy Agreement in issue has not been referred to Arbitration. In fact, it 1s ridiculous and self contradictoty for the defendant to resist going to Arbitration on any ground .,.Nhats<;>ever~ In my view, the late . Kati ti, J. was wise for not considering various points of prelirnina.ry objection raised by counsel for the defendant in the prevint1s Written Statement of Defence. He was v.rise · for not doing so not only after finding that the paramount point in the N·otice of ' . 10 Prelin1inary objection was the one concerning the 01nission to refer the dispute to Arbitration but also after finding that the rest of the points are not points of la~T but are points of facts which need to be proved by evidence. Like Katiti, '-J. I also find that apart frorn the point concerning the ornission to refer the dispute to Arbitration, the rest of the points are points of facts which need to be proved by evidence during the trial of the suit in case arbitration fails and' therefore are pre""rnature to be dealt T"vith now. In other words, evidence will be required to . , -'t prove that the purported suit was not bro11ght within ." · ..,. ,t t\velve months from 18 th July, 1996 which was the date hen the alleged amount was claimed and was to be paid. \ \7 That is one. T~To, that the signatories purportin.g to sign the contract referred to in the plaint had no ·power in terms of the Tanzania Railvvays Corporation Act to sign the contract. :ll.1 Three, that no approval of the investm.ent 1.1nder Agre em en t referred to in the plaint had been granted in terms of S.26 (3) of the Tanzania Raih\rays Corporation Act. Four, that the Agreement referred to in the plaint is unstamped contrary to the provisions of the Sta1np D1.1ty Act Cap. 189 l~.E. 2002 . Five, that the Agreen1ent referred to in the plaint is unregistered contrary to the provisions of the Registration of Documents Act Cap. 117 R.E. 2002. That is all. Taking into consideration the fact that this case has been pending in court for so long, I strike it out in favour of the Atbitration process. Article 16 of the Consultancy Agreernen t refers. Each party to bear its ovvn costs. ~ l\.. Shangwa JUDGE 23/3/2012