MCA NO 20262 OF 2024 SARENS VS EFFCO

IN THE HIGH COURT OF TANZANIA (DAR ES SALAAM SUB-REGISTRY)

AT DAR ES SALAAM MISC. CIVIL APPLICATION NO. 20262 OF 2024 (Originating from Civil Case No. 27827 OF 2023) EFFCO TANZANIA LIMITED…………………………….....…………… APPLICANT

VERSUS SARENS N.V. …………………………………...………...………….1ST RESPONDENT SARENS SOUTH AFRICA (PTY)….…………...……...………….2ND RESPONDENT

RULING 17th October & 22nd November, 2024 BWEGOGE, J.: The above-named applicant instituted an application herein praying this court to be pleased to order the respondents to furnish security by depositing in Court USD 150,000 being security for costs incurred and likely to be incurred by the applicant in defending Civil Case No. 27827 of 2023 (the Suit), among others. The application is made under the provisions of Order XXV, rule 1(1); XLIII, rule 2 and sections 68 (e) and 95 of the Civil Procedure Code [Cap. 33 R.E. 2019] and supported by the affidavit of Mr. Gerald Nangi, the applicant’s counsel. 1 The applicant was represented by Mr. Gerald Nangi, learned advocate; and Ms. Catherine Kiiza, learned advocate, entered an appearance for the respondents. In substantiating this application, Mr Nangi submitted that the law is clear in that when the litigant is a foreigner without movable properties in this land, security of costs should be granted, in terms of Order XXV, rule 1 of the Civil Procedure Code. That the relevant provision imposes two conditions for grant of application for security of costs; one, that a sole plaintiff is, or all the plaintiffs are residing out of Tanzania; and two, that such plaintiff does not, or that no one of such plaintiffs does, possess any sufficient immovable property within Tanzania. The counsel asserted that they satisfied both conditions

aforementioned for grant of the sought order based on the following grounds: First, based on the plaint, it is obvious that the plaintiff is a foreign entity which was not incorporated in Tanzania. That the deponent namely, Michael Dewart deponed in the counter affidavit what he considers to be falsity as the name SARENS TANZANIA Co. LTD found in the attachment to justify that the respondents were registered in Tanzania, is not a party to this application. Secondly, the respondents lack immovable properties within Tanzania. The same failed to establish in their counter affidavit that they 2 possess immovable properties in Tanzania. The counsel directed the mind of this court to the cases: SIRCO Engineering Ltd vs. Construction Equipment Africa Ltd, Commercial Case No. 33 of 2005, HC (unreported); Tanzania Port Authority & Another vs. Leighton Offshore PTE Ltd, Misc. Commercial Application No. 44 of 2021, HC (unreported); and Mohamed Iqbal Haji Mohamed and Others vs. Marwan Al Zaeim, Consolidated Misc. Land Case Application Nos. 679 & 680 of 2016, HC (unreported) to reinforce his argument. Based on the above premises, the counsel prayed this court to grant the application herein. Conversely, Ms Kiiza contested this application. She contended that the provisions of Order XXV, rule 1 of CPC imposes two conditions for grant of order sought to the effect that the plaintiff should be

residing out of Tanzania; and such plaintiff doesn’t possess any sufficient immovable property within Tanzania. Pertaining to the 1st condition, the counsel contended that the deposition made by the applicant that the respondents reside outside of Tanzania was not satisfied as this fact was bound to be proved. The case of The Registered Trustees of Tanzania Presbyterian Church vs. Jung 3 Hwan Kim and Another, Misc. Civil Application No. 183 of 2022, HC DSM (unreported) was cited to bring home the point. Further, the counsel argued that in the counter affidavit, the deposed facts ascertain that the respondents reside in Tanzania; hence, not required to own immovable properties in this country. The case of George Ngolla Mbwambo vs. Birgit Wellner, Misc. Civil Application No. 81 of 2022, HC (unreported) was cited to validate the point. Moreso, the counsel asserted that though the respondents are foreigners, they have a registered office in Tanzania which is as good as residing in Tanzania. And the respondents have also invested in this land. Thus, the purported incurred costs should not be justification for grant of security of costs. The case of Advatech Office Supplies vs. Ms. Farhia Abdullah Noor and Another, Civil Application No. 354/16 of 2017, HC (unreported) was cited to augment the point. The counsel added that no proof has been made in that the respondents are incapable

of paying costs of this case. Concerning the 2nd condition on whether the plaintiffs (respondents herein) do not possess immovable properties in Tanzania, the counsel contended that the applicant was obliged to prove this fact, which he failed to. The case of Global Agency Limited vs Tarbim Tarim 4 Tekstill Gida San Vetic Ltd., Misc. Commercial Application No. 79 of 2021, HC (unreported) was referred to persuade this court. In sum, the counsel opined that the respondent herein has invested and carries business in Tanzania; and the same has a registered office in this land; hence, the application for security of costs made by the applicant herein lacks legs to stand. The counsel prayed the application herein to be dismissed with costs. In rejoinder, Mr Nangi, prayed this court to take salutary note of paragraph 3 of the plaint filed hereto. That contrary to the assertions made by the respondents’ counsel in that the respondents have an established office in Tanzania, the averment in paragraph 3 of the plaint negates the purported assertion. That the names of the respondents in the annextures to the counter affidavit are different from the name in the plaint. That the difference in company names infers that the same are two and different entities. The case of Christina Mrimi vs. Coca- Cola Kwanza Bottlers Ltd (Civil Application 113 of 2011) [2012] TZCA 1 was cited to buttress the

point. Further, the counsel submitted that it was alleged in the submission in reply that they failed to prove that the respondents have no immovable 5 properties in this land. However, to the contrary, the counter affidavit is silent pertaining to the possession of immovable properties on the part of the respondents. That the case of Advatech Office Supplies vs. Ms. Farhia Abdullah Noor and Another (supra) is not applicable in this case as the provision under scrutiny herein was not discussed therein and the circumstances in the cases referred by the respondents’ counsel are different from the case herein. The counsel concluded by asserting that the case before this court is complicated, requiring expertise and evidence crossing over this land. Hence, they feel that the applicant’s costs be secured by the grant of security for costs. The question to be resolved by this court is whether the application herein has substance. The application herein is pegged on the provision of Order XXV, rule 1 of CPC. For clarity, I find it pertinent to reproduce the relevant provision verbatim as under: 1.-(1) Where, at any stage of a suit, it appears to the court that a sole plaintiff is, or (when there are more plaintiffs than one) that all the plaintiffs are residing out of Tanzania, and that such plaintiff does not, or that no one of such plaintiffs does, possess any 6 sufficient im m

ovable property w ithin Tanzania other than the property in suit, the court may, either of its own motion or on the application of any defendant, order the plaintiff or plaintiffs, within a time fixed by it, to give security for the payment of all costs incurred and likely to be incurred by any defendant. [Emphasis mine]. See also the cases; Enterprises Limited vs. Islam Balhabou and 2 Others, Commercial Case No. 77 of 2007 (Unreported) and Maasai Wanderlings and 2 Others vs. Viorica Ilia and 2 Others, Misc. Civil Application No. 19 of 2021 (HC- unreported); Global Agency Limited vs. Tarbim Tarim Tekstill Gida San Vetic Ltd (supra); Mohamed Iqbal Haji Mohamed and Others vs. Marwan Al Zaeim (supra), among others, in this respect. Thus, as rightly submitted by Mr. Nangi, the above provision imposes two conditions for grant of application for security of costs; one, that the plaintiff/plaintiffs are residing out of Tanzania; and two, that such plaintiff/plaintiffs do not, or that no one of such plaintiffs does, possess any sufficient immovable property within Tanzania. The pertinent question arising herein is whether the conditions imposed by the law revisited above have been satisfied by the applicant herein. 7 As aforementioned, Ms Kiiza contended though the respondents are foreigners, they have a registered office in Tanzania which is as good as residing in Tanzania. And the

same have also invested in this land. Likewise, Ms Kiiza contended that pertaining to the allegation that the plaintiffs (respondents herein) do not possess immovable properties in Tanzania the applicant was obliged to prove this fact, of which he failed. In respect of the 1st condition imposed by the law revisited above for grant of an application of security for costs, I have directed my mind to the averment in the 1st and 2nd paragraphs of the plaint. I have the following observations: One, It is glaring on the averment made in the 1st paragraph thereof that the 1st plaintiff herein is the multinational parent company dealing in renting of cranes and providing heavy lifting solutions, incorporated in Belgium; headquartered in Wolvertem, as per the laws of Belgium. Further, the 2nd paragraph thereto bears the averment that the 2nd defendant is a subsidiary company to the 1st plaintiff “handling the operations in Africa” incorporated under the laws of South Africa, located in Johannesburg, in South Africa. No mention has been made in the plaint pertaining to the purported registered company of the plaintiffs in this country. 8 Two, the certificate of incorporation issued by BRELA purports that SARENS TANZANIA CO. LIMITED was incorporated in this land on 05th October, 2010. The suit instituted in this court by the plaintiffs was registered on 18th December, 2023. Thus, I am at

loss as to why the purported plaintiff’s company registered in this land is not part of the plaintiffs in the main suit or otherwise mentioned as a subsidiary company to the 1st plaintiff handling the operations in Tanzania. Three, the nature of the business carried by the plaintiffs herein is well articulated in the plaint thus; “renting of cranes and providing heavy lifting solutions.” None of those activities are articulated in the business activities in the Register of Companies Details Information issued by BRELA and brought to the attention of this court. To the contrary, the purported plaintiff’s company registered in this country deals with myriads of businesses ranging from wholesale construction materials, motor vehicle spare parts/accessories to retail electrical household appliances. Thus, based on the foregoing, I am constrained to agree with Mr. Nangi in that the so-called “SARENS TANZANIA CO. LIMITED” by design, is a different entity from the plaintiff herein. 9 Regarding the 2nd condition imposed by the law for grant of an application of security for costs, I need not belabour much in delving into this issue. As rightly contended by Mr Nangi, it was plainly alleged in the affidavit supporting the application herein that the respondents, foreigners in this country, do not possess immovable properties in this land. This charge was not categorically countered by

the respondents in their counter affidavit. Likewise, Ms Kiiza didn’t controvert the alleged fact during her submission in reply, though contended that the applicant failed to prove the respective allegation. Thus, I am of the settled view the plaintiffs herein having failed to category controvert the charge in that they have no possession of sufficient immovable properties in this land, cannot be heard contending that the fact needs further proof. Failure to controvert the alleged fact amounts to admission. I would subscribe to the opinion made by Mr Nangi in that the case of Global Agency Limited vs Tarbim Tarim Tekstill Gida San Vetic Ltd (supra) cited by Ms Kiiza doesn’t fit in the circumstances of this case. To the contrary, in the respective case, the respondent contended that she had immovable properties in this land; hence, shouldering the burden of proof to the applicant to negate the claimed ownership. Likewise, in the case of George Ngolla Mbwambo vs. Birgit Wellner (supra), contrary to the circumstances in this case, this court found that the respondent was a 10 resident of this land. Moreso, in the case of Advatech Office Supplies vs. Ms. Farhia Abdullah Noor and Another (supra), the Apex Court found that though the respondents were foreigners, yet the respondents owned sufficient investments and involved in business undertakings in the country, contrary to the

circumstances of the case at hand. At this juncture, suffice it to conclude that I am of the considered opinion that the applicant has demonstrated that the plaintiffs are residing outside Tanzania; and the same do not possess any sufficient immovable property within the country. Hence, the applicant is entitled to grant of order for security for costs sought herein. The applicant prayed for payment into court for a sum of USD 150, 000 as security for costs which is equivalent to TZS. 398,603,850.00 based on the current exchange rate. It is obvious that the prayed amount far exceeds 3% prescribed rate of the claimed principal sum (USD 1,500,060,000/=) which would be paid as instruction fees to defend the suit in terms of the 9th Schedule to the Advocates, Remuneration Order, 2015 (GN 263 of 2015). Thus, I consider the amount prayed for as security for payment of costs on the high side. The rationale for grant of order for payment of security for costs is reimbursement of the successful 11 party; not punishment to the loser or enrichment of the successful party [Wambura Chacha vs. Samson Chorwa [1973] LRT 4]. Moreso, the payment of security for cost should not be employed to bar an honest litigant from approaching the temple of justice, regardless of his financial status [Abdallah vs. Patel & Another [1962] E.A.

447. Taking into consideration the nature of the claim in the main suit, the amount of liquidated sum claimed and the intricacies surrounding the suit in question, I am of the view that payment for security of costs to the tune of TZS 100,000,000/= in the form of bank guarantee would suffice. Given the foregoing, I find the application herein meritorious. I hereby grant the application. The respondents are hereby ordered to deposit in court the bank guarantee for security of costs to the tune of TZS 100,000,000/. The bank guarantee to be deposited in court prior to the scheduled date for the Final Pre-Trial Conference in Civil Case No. 27827 of 2024. Costs shall be in the main cause. I so order. O.F. BWEGOGE

JUDGE 12