Goldrock Company Limited

The Judiciary of Tanzania IN THE HIGH COURT OF UNITED REPUBLIC OF TANZANIA SHINYANGA SUB REGISTRY AT SHINYANGA CIVIL CASE NO. 202405241000012156 GOLDROCK COMPANY LIMITED ............................................................... PLAINTIFF Versus JAMAL SULTAN MOHAMMED ..............................................................1ST DEFENDANT CRDB BANK PLC LTD ……………………………………………………..2 ND DEFENDANT RULING 23rd October & 29th November, 2024 F.H. MAHIMBALI, J. This ruling is trying to respond two main serious legal issues that emerged at the commencement of trial. The first main issue is to what extent as per current legal regime governing proceedings in courts within the Judiciary of Tanzania allows reception of evidence by a distant witness by electronic means vide video link/virtual court etc. Secondly, is whether in a 1 corporate entity, where there are only two directors can one director sue the other co-director under the umbrella of the same company? And whether this court is mandated to give a waiver right of the requirement of filing certificate of company’s board resolution prior to the institution of the company’s suit. The brief facts of the case go this way. One CHARLIE CAGLAYAN YUST and the first defendant formed an agreement to establish a company by name of GOLDROCK COMPANY LIMITED incorporated in the United Republic of Tanzania to conduct mining activities at Kahama. They therefore became co-directors of the company. For the monetary transactions of the company they opened two bank accounts at CRDB Bank Kahama: 0250757867000 for USD, and 0150757755600 for Tanzanian Shilling respectively. It appears that the bank accounts in question allow for withdrawals by either of the authorized signatories, namely CHARLIE CAGLAYAN YUST and JAMAL SULTAN MOHAMMED, who both serve as directors of the plaintiff company. It also appears that the Plaintiff’s other Director one Charlie Caglayan Yust who is also the majority shareholder and financier of the Plaintiff resides abroad. That director (PW1) who is living abroad claims to have credited several deposits to the company’s bank 2 accounts for initial assets of the company. He being abroad, the other co- director resident in Kahama (1st defendant) made several unauthorized withdrawals of the company’s bank accounts for his own personal use. The said director Charlie Caglayan Yust discovered that the first defendant Jamal Sultan Mohammed had withdrawn over $110,000 from the bank account between 16th June 2023 and 6th November 2023 without proper authorization, significantly exceeding the limitations agreed upon. This breach of trust resulted in considerable financial loss to the Plaintiff and violated the terms of their business partnership. Further that the money withdrawn was not used in the business of the Plaintiff but was squandered by the first Defendant. On breach of the trust and loss occasioned by the 1st Defendant, the said majority shareholder has assumed the power of the plaintiff company, filed this suit against the 1st defendant (co-director) and the second defendant – banker for concealing the unauthorized withdrawing transactions and prays for judgement and decree against the Defendants, jointly and severally, for the following reliefs: - (a) Payment of TZS 450,250,000 or USD 180,100/- being the outstanding principal amount, interest and charges; (b) Payment of compensation of TZS 3,000,000,000/- 3 or as the court may deem just; (c) Payment of interest at the contractual rate of 12% per annum from March 2023 up to the date of Judgment; (d) Payment of penal interest at the contractual rate of 2% per annum from March 2023 to the date of Judgment; (e) Interest on the decretal amounts at the court’s rate of 12% per annum from the date of judgement up to the date of full payment; (f) Costs of the suit; (g) Interest on costs of and incidental to the suit at the Court’s rate of 12% per annum from the date of judgement till the same are fully paid; and (h) Any further relief(s) and or orders as the Honourable Court may deem fit to grant for the interests of justice. Now, everything being okay, at the first day of hearing, the counsel for the plaintiff informed the court as his witness (first co-director) is abroad, he prayed that his evidence be recorded by remote proceeding pursuant to the Electronic Recordings and Remote Proceedings Rules –GN 637 of 2021. In response to this, it was defense concern (Mr. Chubwa –counsel for the 1st defendant) that, first the served pleadings lack court’s seal and the court’s official signature, how genuine is it. Secondly, since hearing of the plaintiff’s case involves video link from America, he is doubtful on the 4 execution of court’s orders on issues of costs and other orders in case this court makes necessary orders against the plaintiff, and how the same will be executed. He said this while looking at the plaint and the witness statement of the plaintiff, as they seem both to be signed at Dar es Salaam, but during the court session, it was prayed by the plaintiff’s counsel that, his client (the only witness) is in abroad, thus wanted to follow and participate the court proceedings by electronic devices vide video link. How then could the defendants be assured of their costs should the court order so? Thirdly, he was doubtful on the remoteness proceedings how the plaintiff’s witness will tender the documentary exhibits and its verification process before their reception. On his part, Mr. George Pesha learned advocate for the 2nd defendant while accompanied by Mr. Haruna, registered their doubt on the remote witness vide video link from abroad, that how are documents going to be verified in this process? In elaboration, Mr. Haruna learned for the 2nd defendant as well, submitted that he is aware of the Remote Proceedings Rules and the electronic recordings. It is this GN 637 of 2021 which has laid down the 5 foundation on how the remote proceedings can be conducted by the court. The today's hearing involves tendering of documentary exhibits by the plaintiff’s witness who is in abroad. In his digest to rule 5(2) of the said rules, provides for the restriction of use of video link when it involves documentary exhibits unless it is in the public interest to do so. Also under sub rule 3 of rule 5, provides that the court shall not under any circumstances direct hearing by tele conference where a witness intends to tender an exhibit. His insistence is on sub rule 3. The restrictions imposed there are mandatory. Pursuant to section 53 of the Interpretation Act, when the word "shall" is used, it imposes an obligation which must be complied with. He further humbly invited this court to consider the provision of Order VIII, Rule 5 of the Civil Procedure Code, on the amendment of the First Schedule by GN No. 761 of 2021 which provides to the effect that when a witness statement has been filed on behalf of a party, that party shall cause the attendance of his witness during the hearing purposely for the production of his exhibits and statement at the trial and subject himself for cross- examination. In that regard, the same law/rule imposes a mandatory obligation for a party to enter attendance before the court of law. That said, it is in the interests of justice that the hearing of this matter in the absence 6 of the plaintiff shall render the offending of the laws against the strict adherence to them. He submitted further that, reading the affidavit of authenticity of the electronic evidence and the witness statement, they both contravene the provision of section 7 of the Notary Public and Commissioner for Oaths Act, Cap 12 R.E 2019 which put a restriction upon an advocate or commissioner for oaths to attest the document to which he is interested. That, looking at the first witness statement of the plaintiff appears to be drawn and filed by Robert Kipingili learned advocate but attested by a fellow advocate in the same chamber by name of Abdulaziz Sinani Baisi. In his considered view, this is a legal defect as offending section 7 of the Notary Public and Commissioner for Oaths Act. Thus, it is conflicted. He made reference to the case of Monica Mabula and 3Others Vs. Mwasi Amoni Warioba and 4 Others, Civil Revision No. 7 of 2020, HC at Musoma at page 4, Kisanya J, which amongst othres had an occasion to interpret section 7 of the Cap 12. He concluded that, Mr. Abdulaziz is conflicted in the matter so long as Mr. Kipingili from the same firm is representing the same client. As regards to the affidavit's authentication, is quite clear that the same legal error has been committed as pointed above, that the drawing, filing and attestation 7 has been done by the same chamber though by different advocates. Kisanya, J clarified it very well on the same firm drawing, filing and attesting the document that renders it incompetent before the court for any use. In resisting the legal concerns posed by Mr. Muheza and that of Mr. Haruna, learned advocates for the defendants, Mr. Kipingili learned advocate for the plaintiff refuted that what has been submitted by Mr. Muheza on the authenticity of the witness statement lacking court seal, is a misconception. As the same was properly filed on line vide the electronic - case management system on the 9th day of October 2024, and that can only be verified by going through the appropriate electronic registry of the Court. The Judicature and Application of Laws Act, GN 148 of 2018 has done away with the physical delivery /submission of court’s pleadings. This has been the practice throughout the filing of this matter to date. That was for the plaint, WSDs and all the corresponding and subsequent documents filed in court. Had he any issue on the mode of filing for optical reasons may be, would have raised it at earliest stage possible and not now. 8 As to the issue raised by Mr. Muheza on the mode of attendance of the plaintiff’s witness, he submitted all this has been well cleared under GN No. 637 of 2021 in which rule 4(1) recognizes remote proceedings. That on none physical appearance of the plaintiff and his witnesses at trial can render to unenforceability of some court orders if issued against the plaintiff, Mr. Kitangiri made a remind to Mr. Muheza that the witness (PW1) is merely a director of the plaintiff, strictly different from the plaintiff. And that the plaintiff is located at Kahama who has properties over 50 million in the Bank Account in case of any execution of Court's orders. As regards to the language used in the WhatsApp/Text messages between the witness and the first defendant being Turkish, he submitted that given the fact that the language used is familiar by the two (1st witness for the plaintiff and the 1st Defendant), they can clearly interpret to the rest of the members in court, thought Mr Kipingiri. That notwithstanding, the context in the text in which parties are interested with, is written in English language. And that is what is contained in the said witness statement. As to the concerns raised by Mr. Pesha for the 2nd defendant on how a remote witness can verify on the documents to be tendered in court, he 9 made reference to the same GN No. 637 of 2021 under rule 13 and 14 which provides for the procedure of producing and tendering of documentary exhibits and objects in court during remote proceedings. That if proceedings are by way of video conference, the law is very clear and it will be demonstrated in the due course today if the hearing is to proceed, he said. On the issues raised by Adv. Haruna, with rule 5(3) of GN 637 of 2021 that it prohibits tendering of exhibits if the hearing is conducted by tele conference. Conversely, since this session is vide video conference and not by teleconference, the argument is misguided. Rule 14 of the same GN No. 637 of 2021 clearly provides how to tender documents via video conference - remote proceedings. Thus, it is his submission that, Mr. Haruna has misconstrued the rule or is misdirected by the law. As to the second concern by Mr. Haruna which emanates from Order VIII rule 5 of the CPC - amendment of the first schedule, he clarified that the key word there is attendance. According to rule 4(1) of the GN 637 of 2021 which recognizes attendance in remote proceedings can be in three categories: Virtually, via tele conference and electronic exchange. In that sense, there is a full compliance as to the law as provided (Order VIII, Rule 10 5 of the CPC). He added that, since the witness statement has been filed in court and exchanged between the parties and that the parties are now before the Court others being virtually, the law has been clearly complied with. Lastly, on the raised a legal concern on the attestation part of the affidavit of authentication of the electronic evidence and witness statement saying that it has been attested by a conflicted person, he countered it arguing that, Mr. Haruna’s concerns are misconceived for want of tangible proof. To the best of his knowledge, advocate Abdulaziz Sinani Baisi is not interested in the matter nor is he an advocate in this suit but an advocate from Proxima Attorneys. The address used though is shareable by many of them, but does signify that they are working in the same firm. He insisted that theirs is RK Attorneys and Bais is from Proxima Attorneys. On those serious allegations, he expected a full establishment of the allegations from Mr. Haruna in which he had failed, winded up Mr. Kitangiri. In his rejoinder submission while still resisting the authenticity of court’s pleadings to be also stamped, as a matter of good practice and assurance of the court’s electronic procession, Mr. Chubwa maintained his 11 stand that the same is important otherwise it is doubtful if it is a genuine document. So today being the first hearing day after the final PTC, he is a confident that he was not late to raise it as a matter of law. As regards to the fear of execution of court's orders against the plaintiff, he insisted that it is hard in the circumstance of this matter simply because the 1st defendant being also a co-director of the plaintiff's company has an interest over it. So Mr. Charlie as a matter of law is not the plaintiff but just a co- director so he cannot operate under the umbrella of the plaintiff’s company in exclusion of the first defendant. As far as the issue of interpreter is concerned, he cautioned that it cannot be substituted by the knowledge of the parties or superseded by it. He insisted that, court’s interpreter is important for the common understanding of all parties present. As far as the remote proceedings are concerned, Mr. Pesha co- counsel in his keen follow-up of Mr. Kipingiri's submission, he had quenched his thirst and satisfied that the remote proceedings rules as submitted, have clearly given a solution in the alleged challenging situation. He had no more. 12 On his part, Mr. Haruna for the second defendant, despite a close follow up of Mr. Kitangiri’s detailed and convincing submissions, he had some reservations on his rejoinder submission. He disputed being misdirected by the law. That despite his detailed submissions, but as per rule 5(2) of the GN 637 of 2021, it is clear as it is prohibitive on the tendering of exhibit by remote proceeding unless it is on the public interest. In the current matter, he has not seen the said public interests waiving the physical attendance of the plaintiff’s sole witness. He added that as per Order XVIII, Rule 5 of the CPC (as amended) provides for an issue of a witness statement but the counsel in his reply has made reference to Order VIII, Rule 5 of the CPC which is out of context to what he had submitted. As to the third concern of the contravention of section 7 of Cap 12, that Mr. Abdulaziz is nowhere interested on the matter, is strongly opposed and maintained his submission in chief insisting that they share the same office. Thus, they are legally interested as earlier submitted. Since the attestation is not disputed, then it is defective as submitted. That said it is liable for being struck out and he maintains so. 13 Having heard the learned minds on the alleged uncertainties as far as hearing of the case by video link and tendering of exhibits is concerned, a conflicted advocate, and unstamped electronic court’s pleadings, I had also tasked the legal minds to address me on the competence of the suit for want of the plaintiff company’s board resolution and the plaintiff’s prayer under paragraph 21 of the plaint that the same should be waived. The learned legal minds were tasked to address the court whether the suit is competent and maintainable by the court and whether this court is by law authorized to grant the sought exemption. Following the limitation of time, the parties had, the learned legal minds prayed for time to file their written submissions on this. Seven days were given in that respect for each side’s counsel. To start with, I will spend some time responding to the electronic filing system and the remote proceeding issues as worries raised by the defense counsel. Firstly, I am grateful to Mr. Kitangiri, learned counsel for the plaintiff who seems to be so familiar and eloquent with the two enabling laws (rules) which are Government Notice No. 148 of 2018 (The Electronic Filing Rules) and Government Notice No. 637 of 2021 (The Electronic Record Proceedings 14 and Remote Proceeding Rules). The former staged the electronic filing processes we see in court today, and the latter has enabled the electronic recording proceedings and the remote proceedings we see taking its acceleration in our courts today. The twin rules I may name them as brother and sister in the digital procession of our court business we see them today. The former improved the semi developed judicial statistical data base system popularly known as JSDS I to JSDS II. The latter rules made the court doing away with the manual operation of the court business to full digital. Perhaps it is good also to know why the latter rules got a full force of the law in late 2023 by the order of his Lordship, the Hon Chief Justice while the Rules were promulgated since 2021. History has always been a good tutor and reminder to the world and our country at large. The Court of Appeal of Tanzania under the chairmanship of his Lordship the Chief Justice (Prof Ibrahim Hamis Juma) in the case of Yusuph s/o Mbululo vs Republic (Criminal Appeal No.405 of 2018) [2023] TZCA 17511 (21 August 2023), at page 1 of the judgment bears this preamble: “More than twenty-three years ago, on 28/01/2000, the High Court at Iringa (Mwipopo, J.) in Criminal Sessions Case No. 9 of 15 1995, convicted the appellant YUSUPH MBULULO of murder and sentenced him to suffer death by hanging. Before us today, the appellant, who has so far spent thirty years in custody, is still waiting for the Registrar to supply him with the record of appeal. Today is the fifth attempt by the appellant to reach this apex Court to seek his fundamental right to appeal against his conviction on 28/01/2000”. Having heard the submissions from both parties on the matter, the Court was almost perplexed on what to do. They said this in their perplexing mood (at page 18)! “The record of appeal before us is unique in that it is incomplete. It has a certificate from the High Court dated 28/01/2000 informing the Regional Superintendent of Iringa Prison that the High Court had convicted the appellant of the offence of murder and sentenced him to suffer death. It has a Notice of Appeal which the appellant dully filed …... The record of appeal does not carry the charge sheet with the statement of offence and particulars of murder. The judgment of the trial High Court which convicted and sentenced him to death is also missing. Without a 16 charge sheet, we cannot at very least know, the nature of the unlawful death the appellant caused or where and when he caused it. We do not even know the deceased’s name for whose death the High Court at Iringa convicted the appellant….” After all this, the Court ultimately while making references to similar incidences in the country (Tabora etc) and also making a judicial hunching from other jurisdictions such as India was impressed with the issued directions to Registrars of the High Courts of India through the India’s Apex Court to ensure that the digitization of records duly takes place promptly at all District Courts in all cases of criminal trial and civil suits. They quoted the relevant paragraphs of the Supreme Court in 3ITENDRA KUMAR RODE VS UNION OF INDIA [2023] 4 S.C.R. 512,state: "39. Before parting with the present leave petition another important issue must be dealt with, i.e., the digitization of records. Technology has, in the present time become increasingly enmeshed with the systems of dispute resolution and adjudication with the trends leading to all the more interplay, both supplementary and complimentary between technology and law. 17 40. On 24.9.2021, the learned E-committee of the Supreme Court of India issued a STANDARD OPERATING PROCEDURE (an SOP) for digital preservation. Step-by-step implementation of the digitization process involves eighteen steps therein. Primarily, it requires all High Courts to establish Judicial Digital Repositories (JDR) as well as the standardized system therefor; A digitization cell at each of the High Courts is to be established to monitor the progress on day to day basis; It is the work of the ceil to manage contracts with vendors for specialized services; an online data tracking system to keep track of the data transferred to the High Courts and to facilitate the receipts for each set of transferred records to the District Courts as well; District Courts to have backups of all data transferred to the High Court on a monthly basis while maintaining an independent record thereof. 41. It cannot be doubted that had there been properly preserved records of the Trial Court, the issue in the present appeal as to whether the High Court could uphold a conviction having not perused the complete Trial Court record, would not have arisen. 18 Judicial notice can be taken of the fact that, in accordance with the SOP issued, private entities providing specialized service have been contracted, and therefore considering the importance and essentiality of such record, a robust system of responsibility and accountability must be developed and fostered in order to ensure the proper protection and regular updation of all records facilitating the smooth functioning of the judicial process. 42. Therefore, this court finds it fit to issue the following directions: 1. The Registrar General of the High Courts shall ensure that in all cases of criminal trial, as well as civil suits, the digitization of records must be duly undertaken with promptitude at all District Courts, preferably within the time prescribed for filing an appeal within the laws of procedure. 2. The concerned District Judge, once the system of digitization along with the system of authentication of the digitized records is in place in their judgeship, to 19 ensure that the records so digitized are verified as expeditiously as possible. 3. A continually updated record of the Register of Records digitized shall be maintained with periodic reports being sent to the concerned High Courts for suitable directions. 4. Interlocutory applications), if any, shall stand disposed of [Emphasis added]. As way forward to the matter, our Apex Court of the land had this to remark from page 24 to 25 of the case: The appellant Yusuph Mbululo's 23-year delayed right to appeal to this Court on account of missing appeal record is an urgent wake-up call to the Chief Registrar of the Judiciary of Tanzania, Registrar of the Court of Appeal, High Court Registrar, and all the Deputy Registrars. The Chief Registrar should ensure that Registrars and Deputy Registrars all heed the Supreme Court of India's directives to the Registrar General of the High Courts of India. They should realize that technology and 20 digitalization are a way forward for Court registries in Tanzania on how to eliminate or -minimize incidents of missing court records. They should realize directives The Supreme Court of India's directives to the Registrar General of the High Courts of India Technology and digitization is a way forward for court registries in Tanzania on how to eliminate or minimize incidents of missing court records. The Caribbean Court of Justice website describes court registries as engine rooms fhttps:l/cci.ora/about- the-cci/court-registry/1). For Tanzania, the Registrars, Deputy Registrars, and all registry staff who work in the engine rooms of the courts must digitize their registries to maintain public trust in the administration of justice in the digital age. The website of the Caribbean Court of Justice states: "The Registry is the 'engine room' of the Court. It manages all cases from filing to disposition. It is responsible for the receipt, transmission and custody of documents filed in the Registry and sub-Registries. It is 21 the conduit for the flow of information between the Court and the parties before it. The Registry is also responsible for service of all documents filed in the original jurisdiction. To provide greater access to justice documents may be filed in the sub- Registries and transmitted to the Registry." https://cci.ora/about-the-cci/court-registry So, the current active use of electronic filing and remote proceeding by the Judiciary of Tanzania as brought by JALA vide the GN No. 148 of 2018 and GN. 637 of 2021, are the necessary means engineered by the Hon. Chief Justice – Professor Ibrahim Hamis Juma and his top management team of the Tanzanian Judiciary to make sure that we go away with such unexplained judicial shames of case record loss as reflected in the Yusuph Mbululo's appeal case -a 23-year delayed appeal to the Tanzanian Apex Court on account of missing appeal record. I thought it was important to preface this ruling on the electronic transactions of Tanzanian Courts’ business being not just a matter of fashion but modernity and high demand of confidence to judicial business. 22 Back to the matter at hand, with the issue raised by Mr. Chubwa, firstly on the served pleadings lacking court’s seal and the court’s officer’s signature, thus doubting their genuineness. I think Mr. Chubwa is not very conversant with the Electronic Filing Rules as promulgated by JALA vide GN No. 148 of 2018. I would recommend that he revisits the law on the enacted rules squarely for his better working on the digital error. The Chief Justice established these rules vide rule 4(1) of the said GN 148 of 2018. The law is, all original pleadings or documents other than annexures or attachments shall be prepared electronically using MS Word. The formatting style of the text for the documents are as prescribed in the Third Schedule to these Rules. After the preparation is due, the documents shall be converted to PDF (Portable Document Format) using any compatible PDF converter. Where the document is not a text document and has to be enclosed with the petition, appeal or application or other pleadings, the document shall be scanned using an image resolution of 300 dpi (dot per inch) and saved as a PDF document. The law now (under rule 9 of the GN 148 of 2018) recognizes the existence of electronic case file as full and complete record of the case record. Therefore, upon just filing, admission, assignment and service, the filed document becomes a digital file (electronic file) with unique security features 23 in compliance with the security procedures of the electronic filing service within the meaning of the Electronic Transactions Act. Therefore, even if the said pleading lacks the requisite court seal or court officer’s signature, is by law a genuine document provided it has undergone the filing, admission and assignment processes. For his good knowledge, I refer Mr. Chubwa to revisit his law on the provisions of Rule 10 to 13 of the GN 148 of 2018 on procedure for preparing electronic filing, preparation and formatting of documents in MS Word, convention to PDF, and signing of electronic documents. For example, the rules provide for the formatting style of the text shall be as prescribed in the Third Schedule to these Rules of the GN. No. 148 of 2018. These rules are very prescriptive and make a mandatory requirement of paper size to be A-4, margins – top, bottom and right to be “1.5”, left margin – “1.75”, the recommendable font is – Times New Roman and Font size is 12. Line spacing is 1.5 (see the Third Schedule of the GN No. 148 of 2018). If all this is complied with, then that forms the electronic file in the digital form. But the stake holders’ practice including Mr. Chubwa himself has been different as pleadings are prepared out of the e-cms but uploaded into the e-cms as a document instead of auto-filling, converting and signing as provided. It is high time that stake holders make a strict compliance with the rules’ 24 requirement before vigilant judicial officers do striking of the pleadings for none compliance of the strict rules. I think this tone’s volume reaches the sound ears of the service providers and the stake holders as well. Secondly, since hearing of the plaintiff’s case involves a video link from America, that is not a strange phenomenon as per law. Our Evidence Act under section 3 (1) is guiding that oral evidence means statements of material which the court permits or requires to be made before it by witnesses being physically present at the time of making the statement or by use of other means of communication including teleconference or video conference, in relation to matters of fact under inquiry. That means, a fact can be established either by being physically in court or vide other means of communication as by law provided including teleconference or video conference. Rule 3 of the GN No. 637 of 2021 gives a definition of what is teleconference, video conferencing etc. That notwithstanding, the Remote Proceedings and Electronic Proceedings Rules, provides when and how the such a proceeding can take place. In essence it is not automatic right but subject to fulfilment of some conditions. Unless it is impracticable and not in the interest of justice to do so, the court may direct remote hearing where a party, his representative or a witness lives outside or within the jurisdiction 25 of the court and his attendance cannot be procured without undue delay or unreasonable cost; for security reasons of the witness; for health reasons; and for any other reason that the court considers necessary and appropriate (See rule 5). However, where a witness intends to tender an exhibit, the court shall not direct hearing by video conference, unless it is in the interests of justice to do so. Moreover, the Court shall not, under any circumstances, direct hearing by teleconference where a witness intends to tender an exhibit (rule 5(3)). The above notwithstanding, the same rules provide the manner how the documents can be tendered as exhibits (rule 13) and also how objects can be tendered as exhibits (rule 14). So generally speaking, as a matter of law, proceedings before a court of law must be in the presence of the parties before the court and not otherwise. The remote proceedings as per the rules are only permissible in the explained circumstances/situations such as living abroad, health reasons, security reasons, costs implications or any other reason as the court may deem necessary and appropriate. In the permissible circumstances, the restrictions put under rule 5 (2) of not tendering exhibits is watered down. That notwithstanding in the current matter, that has not 26 been stated as to why that should happen. My take is, a remote proceeding is not by fashion but by compelling circumstances. The next issue to consider is whether there is a relationship between a remote proceeding and giving evidence by witness statement. As stated earlier that oral evidence can either be made orally by being physically present in court or by remote proceeding (see Section 3(1) of the Evidence Act). What is now guided under Order VIII, Rule 22(1) of the CPC as amended is adding the requirement of stating during the First Pre-Trial Conference Scheduling whether a particular suit shall proceed orally or by witness statement. However, both ways make a requirement of mandatory presence in court unless the court by compelling circumstances directs otherwise by remote proceeding. Therefore, a person who files his witness statement in court pursuant to Order XVIII, Rule 3 and 5 of the CPC can only appear in court virtually where the court so permits but it is not by party’s choice. That means, as far as giving testimony in court is concerned, either it is done orally or by witness statement, both ways dictate the presence of the witness in court. That means, giving evidence in court, primarily is by appearance before it physically. By remote proceedings only appears as a matter of last resort 27 and in permissible circumstances as by law and therefore it is not by a party’s pleasure, fashion or choice, it being not a party’s automatic right. That said in my considered view, a filing of witness statement is not a substitute of physical appearance in court for one’s testimony but only a reduced way/modified manner of oral testimony as both ways require a witness to be present in court. In my considered view, the witness statement as brought by Order VIII, rule 22(1) and Order XVIII, Rule 3 of the CPC is not by itself a full and complete evidence as it must be complemented by court’s oath and post legal procedures such as tendering of exhibits and cross examination and re-examination as the case may be while it is not necessarily the case with affidavit evidence. That said, my conclusion is, the witness statement is not a substitute of physical appearance in court for a witness’s testimony. Regarding the issue of one advocate being conflicted with the matter, that is purely a question of fact. For it to stand it must be strictly proved that the said advocate is conflicted with the matter. I have not seen that established fact by the defendants that the said Abdulalazi Sinai Basi has offended section 7 of the Notary Public and Commissioner for Oaths Act. 28 Therefore, as I agree with the principle set on conflicted interests as stated in the case of Monica Mabula and 3Others Vs. Mwasi Amoni Warioba and 4 Others, Civil Revision No. 7 of 2020 (supra) by my humble brother Kisanya J in interpreting section 7 of the Notary Public and Commissioner for Oaths, a mere mention by an advocate that he uses the similar postal address with the plaintiff’s counsel is by itself not a conflicting interest as per meaning under section 7 of the Notary Public and Commissioner for Oaths Act. There ought to have been a full and strict evidence that the said Abdulaziz Sinai Basi not only works with the Plaintiff’s advocate in the same building but in the same firm. As it has not been established, this legal objection is misconceived. On the issue of text messages being in a foreign language or another language not known to the rest of the parties and, or the court, the issue of interpretation is inevitable for fairness, confidence of court’s records and integrity of the court’s proceedings. As to the issue of the said witness being abroad, I think Mr. Kitangiri has made it all that there must be a distinction between a party to the case and a witness. In this case, the plaintiff is a legal entity (registered company). 29 The one to testify on her behalf resides abroad who is a co-director. Legally, that is not a problem. So the issue of security for costs will not arise so long as the said plaintiff is a registered entity operating her business in Tanzania with her known assets. The important question which is vital in the matter is whether can one director assume the power of a company and sue a co- director in his personal capacity in the absence of a company’s board of resolution to sue? The both defendants’ counsel are unanimous in their submissions that reading section 147 of the Company Act, the requirement of Board Resolution certificate prior to the commencement of a suit involving a corporate plaintiff is a mandatory requirement so long as the dispute involves internal conflicts of a corporate entity. The submission by the plaintiff’s counsel that their company has only two directors and thus impossible by Coram to hold the said meeting for statutory board resolution certificate is impracticable, they submitted that it is a typical lie, unestablished and contradictory to the plaint and its annexure. As the court’s jurisdiction is derived from the statute, it is nowhere in the statute either the Company Law or any other written law has a provision granting this Court power to waive the mandatory legal requirement. In giving legal breath to their submissions, they made 30 references to various case laws: SM Holdings Ltd vs NBC Ltd & Another (Commercial Case No. 134 of 2022) [2024] TZHCComD 192 (16 August 2024). Further submitted that as per documents forming part of the Plaintiff’s company (Minutes of extra ordinary meeting of Directors of Goldrock Company Limited), there are three directors: 1. Charles Caglyan Yust 2. Jamal Sultan Mohamed and 3. Ahmet Alp Ugurlu. It has been unfortunate that the plaintiff in her reply to the WSDs did not attack or counter this fact. From the submission of the learned advocates for the defendants as well as that of the plaintiff, the issue for determination is whether or not this suit is incompetent in terms of section 7 of the CPC for lack of company’s resolution or board resolution in commencing this suit pursuant to section 147 of the Companies Act, Cap 212, R.E 2002. The latter section is coached: 147.-(1) Anything which in the case of a company may be done - 31 (a) by resolution of the company in general meeting, or (b) by resolution of a meeting of any class of members of the company, may be done, without a meeting and without any previous notice being required, by resolution in writing signed by or on behalf of all the members of the company who at the date of the resolution would be entitled to attend and vote at such meeting: Provided that, nothing in this section shall apply to a resolution under section 193(l) removing a director before the expiry of his period of office or a resolution under section 170(7) removing an auditor before the expiry of his term of office. This is not the first time this Court and our Apex Court of the land deliberated on such a legal issue. There are several tastes by the Courts interpreting what is the actual meaning of this provision. Whereas many have the similar position suiting Mr. Chubwa and Mr. Haruna/Pesha’s line of argument, some are in a different opinion saying that was not the intention of the legislature. 32 Our Court of Appeal which is the Apex Court of the land is not silent on this. Had in several occasions dealt with a similar situation in matters such as this interpreting that the provision as deriving its objective from the principle that, institution of legal proceedings by a company must be authorized either by a company or Board of Directors' meeting (See the case of Bugerere Coffee Growers Ltd v Sebaduka and another [1970] lEA 147 which was cited with approval by the Court of Appeal in the case of Pita Kempap Ltd v. Mohamed I.A Abdulhussein, Civil Application No. 128 of 2004 c/f No. 69 of 2005 (unreported), and Ursino Palms Estate Limited V. Kyela Valley Foods Ltd and 2 Others, Civil Application No. 28 of 2014, CAT at Dsm, where the High Court of Uganda held that: "when companies authorize the commencement of legal proceedings a resolution or resolutions have to be passed either at a company or Board of Directors' meeting and recorded in the minutes....” In order for a suit by a company to be validly instituted as per law, it must be preceded by its resolution and dully appoints who to represent it before 33 the court of law. Short of that, the suit before the court becomes incompetent for its determination. I have sufficiently digested the legal dictum in the case of Simba Papers Convertes Limited (supra) I am in agreement that in this latter case, the Court of Appeal mainly dealt with a situation where the Company itself is in internal conflict with its one director or member. However, the Court of Appeal emphasized and asked this question at page 15: “Therefore, could the company which according to the record before us had 5 directors, commence a suit without the authority of the company? We do not think so. On this, we borrow a leaf from the case of BUGERERE COFFEE GROWERS LTD VS. SEBADUKA [1970] 1 EA 147 (HCU) which dealt with an akin situation”. The Court of Appeal went on to state that in that case, an advocate instituted a suit in the name of the company challenging the appointment of new directors following the removal of old directors. As the Court found that there was no evidence adduced to prove authority of the company to institute the 34 suit, it held the suit defective. In particular, it states: "When companies authorize the commencement of legal proceedings, a resolution have to be passed either at a company Board of Directors' meeting and recorded in the minutes; no such resolution had been passed authorizing these proceedings" The Court of Appeal in this latter case though was faced with a situation involving an internal conflict of a company, in my digest didn’t depart from the principle enunciated in the cases of Bugerere, Pita Kempap Ltd or Ursino. I am of the opinion that, in this case of Simba Papers the Court was making insistence of the same principle for a company to sue, it must have a legal backup by resolution reached by it for the said suit to be valid in court. Otherwise, the rule is not only restricted between a company and its member but extends between that corporate body and an individual or against another corporate body. In the case of Pita Kempap and Ursino Palms Estate Limited (supra), the Court of Appeal clarified well on that. 35 Narrowing the rule to apply only between a company and its member, makes it an understandable in the eyes of the law. On this, the Court said: We subscribe to the said position to the extent that it relates to the institution of a suit by one or more directors in the name of the company whereas in the present matter, it revolves on the internal conflict within the company, in any other case we will be hesitant to extend the rule any further mindful of the legal position relating to the power of the company to be sued in its own name. This position is well summed up by Pennington's Company Law, 15th edition, London, Butterworths by Robert Pennington thus: "The intention of the legislature was undoubtedly that the Court should assist the Company to achieve its expressed objects by implying all powers necessary for it to do so... On the whole the Courts have been liberal in implying powers. Thus, powers have been implied to do acts obviously appropriate 36 to the carrying out on of any business such as appointing agents and engaging employees; and instituting, defending and compromising legal proceedings..." The above reflects a correct legal position to which we fully subscribe.”[Emphasis added]. That is equally my position and understanding of the law as far as suit by a company is concerned. That being the correct position of the law, I have no privilege to close my eyes in disrespect of it. I had a similar view in the case of Stanbic Bank Tanzania Limited V. Sumry Bus Services and Company Limited and 4 Others, Civil Case No 125 OF 2018, HC – DSM. Since jurisdiction of the court is statutorily provided, I have not seen a single provision of the Company Act or any other written law hinging the heed by the plaintiff’s counsel that this court is mandated to grant what has been prayed. By the way, I find the said prayer as misplaced for want of legal power. That notwithstanding, since parties are bound by their pleadings, it is good that I reproduce what the plaint at para1 says: 37 That, the Plaintiff is a limited liability company incorporated in the United Republic of Tanzania to conduct mining activities. By way of special resolution the Plaintiff has authorized the institution of this suit, its address for service for the purpose of this suit shall be in care of; RK Attorneys Green Acres House, 1 ST FLOOR, New Bagamoyo Road, Victoria Area P.O. Box 72632, DAR ES SALAAM. Meanwhile under para 21 of the plaint, the same drafter says the following, I quote: THAT the plaintiff respectfully requests the court to waive the requirement for filing a board resolution for the institution of this suit, given that the company in question has only two Directors, one of whom is the First Defendant in this case. Due to this unique circumstance, it is impracticable to secure a board resolution in favour of initiating the suit, as it would require the approval of both Directors. This request is made to ensure that the interests of the company and justice are not compromised by the procedural inability to obtain the requisite board resolution……….. 38 Whereas under paragraph 1 of the plaint, the plaintiff makes a declaration of the authority given on the institution of the suit, under paragraph 21 of the same plaint, the plaintiff seeks for the court’s leave to waive the statutory obligation of the legal requirement of annexing or accompanying the company’s board resolution, in a commencement of a suit. When I had tasked the counsel to address the court on the authority of waiver bestowed to this court that, none pointed out the mandating provision of law or case law authority on that legal position. I am afraid to set that precedent for lack of relevant material clothing me with that legal mandate. The legal requirement provided under Order XXVIII, Rule 1 of the CPC is only applicable on subscription and verification of pleading and not to an extent of exemption/waiver on the mandatory rule of a company’s sanction before commencement of a suit as sanctioned by section 147 of the Company Act. As also the plaintiff has failed in her reply to the WSDs countering the fact that the company has three directors (Charlie Caglaynan yust, Jamal Sultan Mohamed and Ahmet Alp Ugurlu), then the averment under paragraph 21 of the plaint is wanting. Above all it is contradictory to 39 paragraph one of the plaint that there is company’s board resolution authorizing the institution of the suit. The submission by the plaintiff’s counsel that I should be guided by Section 95 of the Civil Procedure Code, Cap 33, R.E. 2019, as the Court is vested with inherent powers to make orders necessary to prevent injustice, which includes waiving procedural requirements where strict adherence would obstruct justice. He further persuaded me on the legal approach taken in Chandrakant Joshubhai Patel vs Republic (Criminal Application 8 of 2002) [2003] TZCA 37 (29 April 2003), the Court of Appeal held that: “Inherent power of the court are not really a creature of a statute but a natural phenomenon, therefore can grant orders which are not expressly provided under any law for the interest of justice”. He is of the view that this precedent supports waiving the board resolution requirement in the current case, as enforcing it would unjustly bar the Plaintiff from pursuing its claims against a director accused of fiduciary breaches and fraud. He added that in the current matter, securing a board resolution is practically impossible. The Plaintiff company has only two directors, one of 40 whom, the First Defendant, is accused of substantial misconduct and misappropriation of corporate funds. He kept on convincing this court, that courts in similar circumstances have found that requiring a resolution would be unjust and unfeasible. He placed reliance to an English decision in Automatic Self-Cleansing Filter Syndicate Co Ltd v. Cunninghame [1906] 2 Ch 34 supports this position, which in my considered view is quoted out of context, noting that courts should prioritize substance over procedural technicalities when adherence to procedure is impracticable and risks unjustly dismissing valid claims. In my considered view and respectful opinion, I don’t think if this submission holds any meaningful legal substance. It is more an appeal of mercy to court. My careful reading of the Company Act, Cap 212 R.E 2002, I have come across section 137 which I think provides refuge in a situation the plaintiff is facing on the power of court to order a special meeting. The same provides: 137. (1) If for any reason it is impracticable to call a meeting of a company in any manner in which meetings of that company may be called, or to conduct the meeting of the company in the manner prescribed by the articles or this Act, the court may, 41 either of its own motion or on the application of any director of the company or of any member of the company who would be entitled to vote at the meeting, order a meeting of the company to be called, held and conducted in such manner as the court thinks fit. (2) Where any such order is made, the court may give such ancillary or consequential directions as it thinks expedient; and these may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting. (3) Any meeting called, held and conducted in accordance with an order under this section shall for all purposes be deemed to be a meeting of the company duly called, held and conducted. It was therefore important for the plaintiff first to exhaust all the available remedies provided by the Company Act under this provision before the said institution of the suit was preferred. It is important that this procedure is first executed by the plaintiff before the said suit is filed. 42 In essence I agree with Mr. Kitangiri, learned advocate for the plaintiff that it is a principle that a company, being a separate legal entity, has the locus standi to sue and be sued as emphasized by the case of Salomon v. Salomon & Co Ltd [1897] AC 22, that a corporation possesses legal standing independent of its shareholders and directors, underscoring the necessity of protecting the company’s rights as an autonomous legal entity. Therefore, it must be lucidly clear that the action being taken by the company is not one director’s pleasure but purely for Company’s interests. Having discussed that much, that said, in the wholesome, I agree with the submissions by the defendants that the suit is legally improper before the court for want of the plaintiff’s company board resolution sanctioning the filing of a suit. Consequently, the suit is hereby struck out without costs. It is very sorry to the plaintiff but is dully advised. DATED at SHINYANGA this 29th November, 2024. F.H. Mahimbali Judge 43