GSM ANOTHER VS ZANZIBAR INSURANCE CORPORATION CIVIL CASE NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA DAR ES SALAAM SUB-REGISTRY AT DAR ES SALAAM. CIVIL CASE NO. 18471 OF 2024 GSM GROUP LTD…………………………………………………..…. 1ST PLAINTIFF GSM FOAM COMPANY LIMITED…………………………..…..… 2ND PLAINTIFF VERSUS ZANZIBAR INSURANCE CORPORATION……………………..…… DEFENDANT CONSENT JUDGMENT Date of last order: 28/02/2025 Date of judgment: 28/02/2025 A.A. MBAGWA, J. This judgment stems from a deed of settlement duly signed and filed by the parties before the Mediator Deputy Registrar at the Mediation Centre on the 19th day of February 2025. The plaintiffs herein, GSM GROUP LTD and GSM FOAM COMPANY LIMITED instituted the present suit against the defendant praying for judgment and decree as follows; 1 a) An order for specific performance compelling the defendant to pay the plaintiffs the remaining settlement amount of TZS. 10,431,730,155/= being the balance of the agreed settlement amount as indemnity for the losses suffered by the plaintiffs from a fire accident at the plaintiffs’ manufacturing plant as prior agreed and committed by the defendant. b) An order for payment of compensation for the loss of business profit amounting to TZS 450,000,000/= for each year from the date of shutting down the factory to the date of judgment with interest at the current commercial rate. c) An order for payment of specific damages amounting to USD 692,277 and TZS. 1,779,367,050/= being bank interests and penalties accruals charged on accumulated loan installments resulting from the delay by the defendant to discharge his obligation to pay to the plaintiffs’ banker who was contracted as a loss payee in the insurance policy. d) An order for payment of general damages amounting to TZS. 5,000,000,000/= for loss of business opportunities. e) An order for payment of interest on the outstanding contractual 2 settlement amount of TZS 10,431,730,155/= at a commercial rate and the adjudged amount at the court rate. f) Costs of this suit. g) Any other relief which the Honorable Court shall deem fit to grant. In brief, the factual background of the matter goes as follows; On 16th February 2022, the 1st plaintiff entered into an insurance contract with the defendant to insure and cover all asset risks relating to manufacturing and non-manufacturing risks over all the 1st plaintiff’s buildings and assets located in various parts of Tanzania whose total insured value amounted to Tshs. 55,718,000,00g0/= for the period effective from 16th February, 2022 to 15th February, 2023. Among the insured assets was a commercial complex located at Plot No.2/2, Mikocheni Light Industrial area in the Dar-es-Salaam City commonly known as GSM Tower Mikocheni Industrial Park which is specifically used to house the foam factory plant. On 13th March 2022, the fire accidentally erupted and destroyed the whole manufacturing plant and the building where the foam factory plant was housed thereby causing multiple financial and property losses. On 22nd April 2022, the plaintiffs 3 lodged to the defendant formal claims for TZS 33,857,808,039 being indemnity claims for property damage and losses sustained as agreed in their insurance contract. The defendant acknowledged receipt of the claim and registered the same as Claim Number 020/156/9/220200431/05. Further, the defendant engaged M/s Mclarens Independent Adjusters Kenya Ltd who assessed the loss and adjusted the claimed amount from TZS 33,857,808,039 to a sum of TZS. 12,475,934,236. The plaintiffs were not happy with the assessed amount. However, to bring the dispute to an end, the parties hereto engaged in an amicable settlement of the plaintiffs' claims whereby on 3rd May 2023 the defendant finally committed to pay the plaintiffs a sum of Tshs. 15,431,730,155/= as a final settlement amount being the indemnity and compensation for the plaintiffs’ sustained loss. The plaintiffs acceded to the defendant's proposal by signing the Discharge Voucher on 8th May 2023 and directed the defendant to pay the agreed settlement amount through the bank account held at NCBA Bank Ltd, loss payee. On 2nd September 2023, the defendant made part payment of the agreed amount in the sum of TZS.4,000,000,000/=, and on 22nd February 4 2024, she further paid a sum of TZS. 1,000,000,000/= thereby making a total payment of TZS. 5,000,000,000/=. As such, a sum of TZS. 10,431,730,155/= remained outstanding to date. The plaintiffs contended that they incurred multiple financial losses including USD 692,277 and TZS. 1,779,367,050/= being bank interests and penalties on delayed repayment of the matured bank loans. The plaintiffs further contended that they lodged a complaint to the Tanzania Insurance Regulatory Authority (TIRA) in an effort to make the defendant comply and implement the insurance contract and the discharge voucher but to no avail. The regulator granted an extension of time to the defendant up to 27th September, 2023 to have the settlement amount paid to the plaintiffs but the defendant still failed and ignored to pay the said amount. The plaintiffs lamented that despite repeated demand notices and an expression of intention to sue, the defendant denied in total to reimburse or indemnify the plaintiffs. Consequently, the plaintiffs resolved to institute the present suit claiming the reliefs from the defendant as indicated hereinabove. After the first pre-trial conference, this matter was referred to the Mediation 5 Centre. Luckily, on 19th February 2025 before Hon. Augustina Mmbando, Deputy Registrar, the parties successfully mediated the matter. The parties signed a deed of settlement which was filed in Court to form part and parcel of the consent judgment and decree of the Court. As the High Court Mediation Centre is not enjoined with powers to execute decrees, the parties were referred back to this Court for the recording of the deed of settlement and issuance of consent judgment and decree of the Court. The law is very clear on the disposal of cases by settlement where parties mutually agree to settle their dispute through amicable means. Order XXIII rule 3 of the Civil Procedure Code under which this settlement deed /was filed provides as follows; "Where it is proved to the satisfaction of the court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit, the court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the suit". 6 Again, in the case of Motor Vessel Sepideh and Another vs. Yusuph Mohamed Yusuph and two Others, Civil Application No.237 of 2013, CAT at Dar es Salaam, the Court clearly underscored the need for the courts to encourage and record a deed of settlement once it is arrived at by the parties. Besides, in the case of Jaffrey Indi. Sian Ltd vs M/s Beijing Construction Engineering Group Limited, Commercial Case No. 38 of 2021, the court remarked that the parties' mutual settlement of cases is a route encouraged all over the world. In the premises and without further ado, the deed of settlement reached by parties through mediation is hereby recorded and adopted to form part and parcel of the consent judgment. The matter is therefore marked settled with the following terms; 1. That, this settlement is made as to the result of insurance contract between the Plaintiffs and Defendant under ALL RISK POLICY Cover in policy No. 020/156/1/174132/2022, to which the period of insurance coverage was from 16/02/2023 (sic) to 15/02/2023. 2. That, to the date of signing this deed, TZS. 6,000,000,000/= has 7 already been paid as an indemnity amount resulting from the fire accident that damaged the plaintiffs’ industry, from TZS 15,000,000,000/= of the total indemnification amount agreed between parties. 3. That the defendant hereby agrees and undertakes to pay the Plaintiffs a total sum of TZS 9,431,730,155/= being the outstanding balance of the agreed indemnity amount as of the date of signing of this settlement deed by both parties. 4. That the defendant shall pay the agreed amount in monthly installments of Tanzanian Shillings One Billion (TZS 1,000,000,000/=) to be paid in every calendar month commencing from December 2024 until September 2025 when the outstanding amount shall have been fully paid. 5. That the plaintiffs agree to relinquish all the claim against the defendant and thereto the plaintiffs hereby withdraw and waive all other claims as stated in the plaint in Civil Case No. 18471 of 2024 and under the ALL RISK POLICY Cover in policy No. 8 020/156/1/174132/2022 subject to the claim made hereinunder against the defendant. 6. That pursuant to this deed of settlement, the plaintiffs and the defendant respectively do hereby mark a settlement over the suit and all other consequential claims save for disputes relating to enforcement of the court decree issued hereof. 7. That, it is agreed that each party shall bear its own costs so far incurred. 8. That this deed of settlement shall be recorded and marked as a decree of this Honourable Court. 9. That, should any party default on the terms herein agreed, the aggrieved party shall be at liberty to resort to this Honourable Court for enforcement. It is so ordered. Dated at Dar es Salaam on this 28th day of February 2025. A.A. Mbagwa JUDGE 28/02/2025 9