APPLICATION NO 1315 OF 2024 JUBILEE INSURANCE COMPANY OF TANZANIA LIMITED VS STANBIC BANK TANZANIA LIMITED

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM CIVIL APPLICATION NO. 1315 OF 2024 JUBILEE INSURANCE COMPANY OF TANZANIA LIMITED............................................................ — ■APPLICANT VERSUS STANBIC BANK TANZANIA LIMITED.......................................RESPONDENT (Application for Stay of Execution of the Decree of the High Court of Tanzania (Dar es Salaam Sub Registry at Dar es Salaam) (F.H. Mahimbali, J.) dated the 31st day of July 2023 in Civil Appeal No. 222 of 2019 RULING 26th & 28th March, 2025 MANSOOR, 3.A. The applicant filed a Notice of Motion praying for stay of execution. The application is premised under Rule 11 (3), (4), (5) (a) and (b), (7) (a), (b), (c) and (d) and Rule 4(2) (a) and (b) of the Tanzania Court of Appeal Rules, 2009. The Notice of Motion is accompanied by the affidavit deponed by Mr William Evance Mwankusye, the applicant's Secretary. The application is uncontested as the respondent did not file an affidavit in reply. Summarily, the grounds upon which the Notice of Motion is based is as follows; 1. That, substantial loss may result to the Applicant if execution of the decree is not stayed; 2. That, the applicant undertakes to furnish security for the due performance of the decree as may ultimately be binding upon her. As depicted from the applicant's affidavit and the records filed, the background of the case which led to the present application goes as follows; The Applicant, identified as an insurance company, is involved in a legal dispute where the respondent initially filed a suit against LAND MASTERS COMBINE LIMrTED on November 29, 2019, under Civil Case No. 222 of 2019. The applicant was joined as the 1st Third Party, with the allegation that they were the insurer of LAND MASTERS COMBINE LIMITED, thus liable for indemnification. The trial court, in its judgment delivered on July 31, 2023, held that the Applicant should cover the liability totalling TZS 241,790,257.16, explicitly stating no interest was to be charged. Dissatisfied with this outcome, the Applicant lodged a Notice of Appeal on August 21, 2023, and subsequently instituted Civil Appeal No. 1315 of 2024 on November 22,2024, challenging the judgment on several grounds, including jurisdiction, maintainability, insurance cover extension, conspiracy, and the decree's quantum. While the appeal is pending for hearing at the Court, on February 18, 2025, the respondent served to the applicant an application for Execution No. 2790 of 2025, seeking to execute a monetary decree amounting to TZS 414,065,815. This amount comprises the principal sum of TZS 241,790,257 and an additional TZS 172,275,558, calculated as 19% per annum interest for 45 months. The hearing date for an application for execution was scheduled for February 25, 2025, at 10:00 AM before Hon. Mushi-DR. In response, the applicant, aware of the pending appeal, convened a management meeting and instructed Mr. Audax Kahendaguza Vedasto, the learned Advocate to apply for stay of execution pending the determination of the appeal. The Applicant argues that if the execution of the decree initiated by the respondent before the High Court would be left to continue, taking into account the enormous sum involved, would disrupt their operations as an insurance company, affecting their ability to satisfy claims for insured persons and third-party beneficiaries. They emphasize that their funds are essentially those of the insured, and removing TZS 414,065,815 (or even the principal TZS 241,790,257) could destabilize their financial operations. To mitigate concerns, the Applicant offers to furnish a bank guarantee or other sufficient security as directed by the court, undertaking full responsibility for the decree if it is ultimately binding. Upon the application called for hearing, the applicant was represented by Mr. Audax Kahendeguza Vedasto, the learned Advocate whilst on the other hand, Mr. Paschal Kamala, the learned Advocate appeared for the respondent. At the very outset before the car hit the road, the respondent's counsel declared that the respondent does not contest the applicant's application. He thus, leaves to the Court to decide on whether the application is worthy to be granted. As it has already been provided in the law and clarified in plethora of authorities, two conditions must be met in order for the application of this nature to be granted. Rule 11 (5) of the Rules provide for the said conditions to be: 1. The court must be satisfied that the applicant would suffer substantial loss if the stay is not granted. 2. The applicant must provide security to ensure the decree will be complied with. Having considered the affidavit in support of the motion, particularly paragraph 8, where the deponent averred that the applicant is an insurance company which holds funds that belong to its client and the money revolves for settlement of the claims of the insured, if such huge amount of money i.e. TZS 414,065,815 as claimed in the application for execution would be cashed , the business of the applicant company would be shaken, thereby disrupting the company's ability to fulfil the claims of the insured or third-party beneficiaries. I have considered the affidavit of the applicant in support of the application and I am aware that no order for stay of execution shall be made under sub rule (5) of rule 11, unless (a) the court is satisfied that substantial loss mayresult to the applicant unless the order is made and that the application has been made without unreasonable delay and that it was filed within 14 days from the date the applicant was made aware of execution; and (b) such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant. Granted that the power of the court to grant or refuse an application for a stay of execution is discretionary but the discretion must be exercised judicially and the aim is to prevent the subject of an appeal from being rendered a nugatory. The Court should not refuse a stay if there are good grounds for granting it. More importantly, the Court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances and its unique requirements. The court in exercising its powers under Rule 11, can order security upon application by either party or on its own motion. Failure to put security of costs as ordered will cause the order for stay of execution to lapse. As to whether the Application has been filed within the prescribed time. From the facts deposed in the affidavit of the applicant, this court finds that the notice of appeal and this application for stay of execution has been filed within the prescribed time. On the issue of substantial loss, I gather that there is no specific mathematical formula to measure the loss but refers to any loss, great or small and the applicant is required to substantiate it by showing that execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory. Where execution of a money decree is sought to be stayed, in considering whether the applicant will suffer substantial loss, the financial position of the applicant and that of the respondent becomes an issue. The court must be satisfied of the ability of the respondent refunding the decretal sum in the event that the applicant is successful in her appeal whereas the applicant is required to show that it will suffer an irreparable loss if the decree is left to be executed before the appeal is finalised and that in case the appeal is unsuccessful, she is able to fulfil it on time. The court has to balance the interest of the applicant who is seeking to preserve the status quo pending the hearing of the appeal so that her appeal is not rendered nugatory and the interest of the respondent who is seeking to enjoy the fruits of her judgement. Guided by the above, and taking into account that the application was not opposed, as the respondent did not file a replying affidavit to rebut the averments made by the applicant in the supporting affidavit, and before the court, the respondent's counsel did not oppose the application, there remains the un-rebuttable position that the applicant would suffer loss if the decretal sum would be taken from her bank account and that will affect her insurance business. I find that the applicant has satisfied this court that she will suffer substantial loss if the entire decretal sum is paid to the respondent before the appeal is heard and determined. As regards to deposit of security, it is apparent that the applicant has shown and is able to meet the condition of payment of security for due performance of the decree. Counsel for the applicant submitted that the applicant is ready to provide a bank guarantee as security for due performance of the decree and the applicant is ready to cover only the decretal sum without the interests as the decree sought to be executed did not provide for interests. The aim of the court to order security for due performance of the decree is to make sure that the appeal would not be prejudiced and that the decretal sum would be available if the appeal is unsuccessful. The respondent is not entitled to any amount more than what was decreed. In the case of Mantrac Tanzania Limited vs Raymond Costa, Civil Application No. 11 of 2010 (unreported), the Court clarified that a firm undertaking by the applicant to provide security is sufficient, as long as the court sets a reasonable time frame for the security to be furnished. Taking all relevant factors into consideration and in order not to render the intended appeal illusory, I do grant stay of execution of the decree in Civil Case No. 222 of 2019 dated 31st July 2023, on condition that the applicant shall give and deposit a bank bond guarantee of sum of TZS 241,790,257.16 into the Court as security for the due performance of the decree. This condition is to be met within 45 days from the date of this ruling or in default, this application shall be deemed to have been dismissed with costs and the respondent shall be at liberty to execute. It is so ordered. DATED at DAR ES SALAAM this 28th day of March, 2025. L. A. MANSOOR JUSTICE OF APPEAL The Ruling delivered this 28th day of March, 2025 in the presence of Mr. Joseph Rugambwa, learned counsel for the Applicant and Ms. Esther Msangi, learned counsel for the Respondent, through visual court is hereby certified as a true copy of the original. A. L. KALEGEYA DEPUTY REGISTRAR COURT OF APPEAL