kastan mining ltd vs luguruni mining ltd 3 others 2012 tzhccomd 13 22 march 2012

kastan mining ltd vs luguruni mining ltd 3 others 2012 tzhccomd 13 22 march 2012

A pending application for mineral rights is not transferable under Tanzanian law; only a granted license can be assigned. The Plaintiff's Option and Purchase Agreement was a contingent contract, enforceable upon grant of the license. The 1st Defendant breached the agreement by transferring the license to the 2nd Defendant before the closing date and without transferring it to the Plaintiff. However, the 2nd and 4th Defendants were bonafide purchasers without notice of the Plaintiff's rights. The Plaintiff is entitled to special and general damages from the 1st and 3rd Defendants, but not to the full amount claimed, as only certain expenses were specifically proved.

Citation
kastan mining ltd vs luguruni mining ltd 3 others 2012 tzhccomd 13 22 march 2012
Parties
Plaintiff: Kastan Mining Ltd; 1st Defendant: Luguruni Mining Ltd; 2nd Defendant: Abba Mining Ltd; 3rd Defendant: Unknown (3rd Defendant); 4th Defendant: Unknown (4th Defendant)
Court
TZHCCOMD
Jurisdiction
Tanzania
Judgment Date
22 March 2012
Procedural Posture
Commercial Case / Judgment
Outcome
Judgment for the Plaintiff against the 1st and 3rd Defendants jointly and severally.
Legal Topics
Transferability of Mineral Rights, Breach of Contract, Fraud, Bonafide Purchaser, Contingent Contracts, Damages
Source Language
English
Contract Law Mining Law Commercial Law Transferability of Mineral Rights Breach of Contract Fraud Bonafide Purchaser Contingent Contracts +1 more

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Parties

Kastan Mining Ltd

Plaintiff

Luguruni Mining Ltd

1st Defendant

Abba Mining Ltd

2nd Defendant

Unknown (3rd Defendant)

3rd Defendant

Unknown (4th Defendant)

4th Defendant

Procedural Posture

Commercial Case / Judgment

Legal Issues

  1. 1 Whether a pending application for mineral rights is transferable under Tanzanian law
  2. 2 Whether the transferee of mineral rights had residual legal rights/title to transfer to a third party the licence granted by the Minister for Energy and Minerals based on an already transferred pending application
  3. 3 Whether the purchaser (Abba Mining Ltd) of a licence issued on an already transferred pending application acquired a better title against the transferee (Kastan Mining Ltd) of a pending application

Ratio Decidendi

A pending application for mineral rights is not transferable under Tanzanian law; only a granted license can be assigned. The Plaintiff's Option and Purchase Agreement was a contingent contract, enforceable upon grant of the license. The 1st Defendant breached the agreement by transferring the license to the 2nd Defendant before the closing date and without transferring it to the Plaintiff. However, the 2nd and 4th Defendants were bonafide purchasers without notice of the Plaintiff's rights. The Plaintiff is entitled to special and general damages from the 1st and 3rd Defendants, but not to the full amount claimed, as only certain expenses were specifically proved.

Court Disposition

Judgment for the Plaintiff against the 1st and 3rd Defendants jointly and severally.

Orders

  • 1st and 3rd Defendants to pay the Plaintiff USD 6,200 and TZS 500,000 as special damages.
  • 1st and 3rd Defendants to pay the Plaintiff USD 10,000 as general damages.