LABA CONTRACTORS LTD VS

IN THE HIGH COURT OF TANZANIA (DAR ES SALAAM SUB - REGISTRY) AT DAR ES SALAAM CIVIL CASE NO. 64 OF 2022 LABA CONTRACTORS LIMITED….…………………………………….……..PLAINTIFF VERSUS TANZANIA PORTLAND AND CEMENT PUBLIC LIMITED COMPANY……………………...….……………………..DEFENDANT JUDGMENT Date of last Order: 04th March, 2024. Date of Judgment: 12th April, 2024. E.E. KAKOLAKI, J. In this case the plaintiff, a registered labour based manpower supply Contractors Company is suing the defendant (TPCPLC), a company engaged in the manufacture and sale of cement and cement based products, claiming for several reliefs allegedly on breach of contract for provision of manpower dated 21/05/2021. It is contended by the plaintiff that, having won the tender and signed the contract kept available for supply more than 150 personnel to avoid breach of contract, borrowed ten (10) million to augment her capital and bought personal protection equipment (PPE) ready for provisions of service, but to her surprise no any number of the contracted 1 labour was ever called by the defendant in discharging his obligation under the terms of contract. It is from that breach of contract the plaintiff is claiming for the declaration order that, the plaintiff has breached the said contract and orders of payment of Tshs. 180,000,000/- being specific damages as salaries for the said mobilized causal labourers, Tshs. 60,000,000/- being salaries for support personnel, Tshs. 100,000,000/- being salaries for senior personnel, Tshs. 12,685,000/- as costs incurred to purchase Personal Protection Equipment (PPE), refund of borrowed money to the tune of Tshs. 10,000,000/- for resource mobilization, general damages to the tune of Tshs. 500,000,000/-, interest of 14% of the claimed money from the date they fell due to the judgment date save for the borrowed money and general damages and interest of 21% on the decretal amount from the date of judgment to the date of full payment as well as the costs of the suit and any other reliefs the court may deem fit to grant. In her Written Statement of Defence the defendant renounced all plaintiff’s claims contending that, she never breached any terms of contract given the fact that the same was framework contract/agreement implemented upon arising of emergency workforce need of manpower by the defendant and upon issue of a purchase order to the plaintiff. 2 Following that denial of plaintiff’s claims by the defendant and upon completion of pleadings and five issues were framed by the Court so as to determine parties’ dispute going thus: 1. Whether there was a contract between the parties. 2. If yes, what was the nature, scope and terms of the contract executed between the parties. 3. Whether the defendant breached the terms of contract. 4. If yes to issue No. 3, whether the plaintiff suffered the claimed damages. 5. To what reliefs are the parties entitled to. In a bid to prove his claims and respond to the above raised issues the plaintiff prosecuting under services of Mr. Peter Kibatala, learned advocate procured in court two witnesses namely Emmanuel Michael Mshana (PW1), as plaintiff’s managing director and Edwin Michael Kamugisha (PW2), a technical director in the plaintiff’s company while relying on eight (8) exhibits. The exhibits are the plaintiff’s company profile (exh. PE1), the Framework Contract for Industrial Support at TPCPLC (exh.PE2), Proforma Invoice for Tshs. 12,688,000/- (exh. PE3), three employment contracts of the plaintiff’s employees (exh. PE4 collectively), Staff payroll from May, 2021 3 up to December, 2021 (exh. PE5), Three identity card issued by the defendant to the plaintiff’s staff (exh.PE6 collectively), two company meeting minutes (exh.PE7), copy of Plaintiff’s application for tender No. TPCPLC/PD/024/21 for provisions of industrial support services (exh.PE8) and a tender document issued by the defendant for provision of industrial support services (exh.PE9). On her part the defendant represented by Mr. Rwekamwa Rweikiza, learned advocate paraded two witness without any tendered exhibit in disproving plaintiff’s claims. These were DW1- Saphiness Kikwesi, service category manager from the defendant’s company and DW2- Andrew Harry Chonjo from Metallurgical Engineering Works, a company offering services of provision of manpower and production of industrial spare parts. Having closed their cases both parties craved for leave of the court and filed their respective closing submissions, in which their efforts are highly appreciated as the same have been of much assistance in this decision. In this judgment I am not intending to reproduce all adduced evidence but rather make reference thereto in the course of determination of the above raised issues. To start with the first issue on whether there was a contract between parties, from both parties’ evidence and submission there is no dispute that contract 4 exhibit PE1 was freely executed between them. This is none but a framework contract for industrial support at PTCPLC date 01/05/2021. The first issues is thus answered in affirmative. As to the second issue on what was the nature, scope and terms of the contract executed between the parties, it is Mr. Rweikiza’s submission that, by its nature the contract under dispute is a framework contract which may be closed or open. And that the contract of this nature is implemented by the defendant by placing ‘call off orders’ whenever the goods or services are required. According to him the ‘call off order’ is placed by the procuring entity under general terms and pricing on a range of goods or services rendered under the said framework contract without necessarily renegotiating the terms every time. As to the scope and terms he said, in this case as per Part 1 of exhibit PE2 on general terms, the contract was to be implemented by issue of purchase order confined within the contractual terms and durations being its scope. That, under no any circumstances the plaintiff could supply manpower without receipt of any call off orders issued in the form of Purchase order as described under Part 1 of exhibit PE2 on general terms as ignition for performance of a contemplated contract as also well evidenced in PW1 and PW2’s testimonies. Mr. Kibatala in his submission held a contrary 5 view arguing that, since the defendant is a Public Company whose procurement processes are governed by the Public Procurement Act, [Cap. 410 R.E 2019] in which the provision of section 76(1) and 2(a),(b) and (c) provides that, no negotiations shall have effect of altering the terms and conditions stated in the tender document (exh.PE9) or the specification or details in the requirements in the tender, the contract could not contain contrary terms to that of tender and bid documents. In was his submission, the tender document in which the contract is derived specified exact number of personnel required in each section or department. According to him the evidence of DW2 in that, his company once worked with the defendant and the modus operandi on the execution of the service provision was by way of purchase order, was of no value as he failed to tender in court any contract executed between his company and the defendant nor any purchase order through which services were allegedly procured during existence of the contract between them. In the present contract (exh.PE2) he contended, its terms cannot be read selectively as the contract must be read as a whole since parties cannot change the law by contract which was inelegantly drafted. As to the scope of work he explained, clause 2 and 2.1 at page 16 of the contract state the contractor shall work as per the instruction of the 6 TPCPLC’s managers responsible for designated functions while in bullet No. 3 of clause 2.2 and 2.2.1 in particular talks of ‘Extra manpower during any stoppage which can be planned on both sides’. The learned counsel queried, if the services were envisaged to be by Purchase Orders, why would the same contract stipulate that the parties can plan for extra manpower during shutdown? In view of the above cited contradiction on the terms of contract Mr. Kibatala submitted it was intended that, personnel were to be available on daily and continuous basis, for ongoing daily activities such as rice husk feeding and physical stock taking since under clause 9 (9.1, 9.2 and 9.3) at page 9 of the contract, any variation to the works to be performed by contractor ought to be in writing and numerated over and above the contract price. He added, why stipulate in such a way if all works were to be requisitioned strictly by Purchase Order? The learned counsel thus called the court to find that, the nature, scope and terms of the contract between the parties was one for the plaintiff to provide a specific number of (support) or personnel to the defendant as per the defendant’s own tender advertisement and plaintiff’s responsive bid to the tender which bred the breached contract. He reiterated, the specific details were clearly set in the tender and bid documents and re-born into the contract. 7 I have given considerable thoughts the contending submission by the parties on this issue and took time to revisit the evidence adduced by both parties’ witnesses as well as consulted the relevant laws. As pronounced earlier on herein above, by its nature the contract under dispute (exhibit PE2) is a Framework Contract which as correctly submitted by Mr. Kibatala is governed by the Public Procurement Act, [Cap. 410 R.E 2019] (the PPA) and its Regulations of 2013 as amended by The Public Procurement (Amendment) Regulations, 2016, GN. No. 333 of 30/12/2016, given the undisputed fact that the defendant is a public company. A framework contract is defined by the Regulations under regulation 3 to mean ‘a contractual arrangement which allows a procuring entity to procure goods, services or works that are needed continuously or repeatedly at an agreed price over an agreed period of time, through placement of a number of orders.’ From the above provision of the law it is evident to this Court that, a framework contract for procurement of repeatedly or continuously needed goods, services or works must be on specified period of time, agreed price and executed through placement of orders in which under the law are referred as ‘call off orders’ as correctly submitted by Mr. Rweikiza. Now what is call off orders, the Regulations are responsive also under 8 Regulation 3 when defined it to mean,’ an order placed by a procuring entity under general terms and pricing on a range of goods under framework agreement, without having to negotiate terms every time.’ What is deduced from the exposition of the law cited above is that, a valid call off order capable of implementing a framework contract must have the following qualities, one, must be coming from the procuring entity, second, its contents or particulars must come from or reflect the general terms and thirdly, must be based on pricing on a range of goods under framework agreement and not otherwise and fourthly, the same need no renegotiation of terms every time. Now back to the contract at issue (exhibit PE2) by looking at its title ‘Framework Contract for Industrial Support at TPCPLC’ there is no doubt and therefore convincingly make this Court to arrive at a finding that by its nature is a Framework contract whose execution or implementation as per the above definitions is done through call off order which must strictly be placed by the procuring entity (defendant) basing on general terms and pricing on a range of goods procured under the said contract. In absence of call off order or purchase order as referred in Part 1 of exhibit PE2 on General Terms, I hold the contract is not executable. 9 Regarding to its scope and terms since the law under regulation 3 of the Public Procurement Regulation provides that, a framework contract shall be executed through call off order or for the purpose of the disputed contract Purchase Order, which must be restricted to the general terms of the contract and pricing of the procured goods or services, it is obvious the scope of the disputed contract (exhibit PE2) is limited to the provision of service or goods as specified in the call off order or Purchase Order and on the terms specified in the said contract, and I do hold. With that clear position of the law, I do not buy Mr. Kibatala’s proposition that, the nature, scope and terms of exhibit PE2 ought to be derived from the defendants tender advertisement and plaintiff’s bid documents exhibit PE8 and PE9 to mean that, the plaintiff ought to provide a specific number of support or personnel to the defendant as to interpret otherwise is to go against the provision of section 76(2)(a)(b) and(c) of the PPA prohibiting any negotiations to change specifications or details or alter materially the terms and conditions of contract stated in the tender documents or anything that substantially formed a crucial factor in evaluation of tender. I so differ with him on the understanding that, Mr. Kibatala seems to challenge through the backdoor the legality of the contract itself in which the plaintiff willingly entered, the contract which in my 10 considered opinion if successful challenged which is not the case, would lead to the court’s findings that there was not valid contract between the parties for contravening the PPA law. I further disagree with his proposition as the complained off terms of the contract were never pleaded in the plaintiff’s plaint, thus the plaintiff is estopped from raising them at the time of submission for failure to seek for amendment of pleadings before and include them in the plaint given the position of the law that, parties are bound by their own pleadings. See the cases of Charles Richard Kombe t/a Building Vs. Evarani Mtungi and 2 Others, Civil Appeal No. 38 of 2012 and Astepro Investment Co. Ltd Vs. Jawinga Company Limited, Civil Appeal No. 8 of 2015 (both CAT-unreported). It is also settled law that parties are bound by their terms of agreement they freely enter into. So once parties have entered into contract with specified terms it will not be open for the courts to change those terms but rather for the parties to renegotiate and freely rectify terms erroneously reached terms which was not the case in the present matter. This legal stance was adumbrated by the Court of Appeal in the case of Univeler Tanzania Ltd Vs. Benedict Mkasa t/a Bema Enterprises, Civil Appeal No. 41 of 2009 (unreported) when relied on a persuasive decision of the Supreme Court of 11 Nigeria in Osun State Government Vs. Dalami Nigeria Limited, Sc. 277/2002 in which the Court articulated that: "Strictly speaking, under our laws, once parties have freely agreed on their contractual clauses, it would not be open for the courts to change those clauses which parties have agreed 13 between themselves. It was up to the parties concerned to renegotiate and to freely rectify clauses which parties find to be onerous. It is not the role of the courts to re-draft clauses in agreements but to enforce those clauses where parties are in dispute." The assertion by Mr. Kibatala that, the plaintiff was to provide or supply to the defendant a specified number of personnel at all time of the period of contract as per the tender advertisement and plaintiff’s bid documents in my firm view is unfounded for two good reasons. One, the tender advertisement by the defendant and bid document by the plaintiff do not form part of the framework contract under scrutiny (exh.PE2) for not being annexed to it or form part of its addendum. Thus making any reference therefrom while knowing that they do not constitute part of the disputed contract this court will be leading its way astray since its duty is to interpret parties’ terms of agreement and not to redraft them as it was held in the cases of Univeler Tanzania Ltd (supra) and Mariam E. Maro Vs. Bank of Tanzania, Civil 12 Appeal No. 22 of 2017 (CAT) Tanzlii. Secondly, the assertion is not supported by any evidence be it the tender advertisement or bid documents that, the contractor shall at all time and without issue of Purchase Order, supply a certain number of personnel as the stated number of 173 causals per month in terms of sub-clause 2.3.2 under clause 2.3 of the tender document exhibit PE9 is the estimated manpower in which the Contractor would be contracted to supply and not the standby number to be supplied at all time of the contractual period of one year. Had the terms referred in sub-clause 2.3.2 under clause 2.3 of the tender document been intended so it would have specifically constituted a term of contract, which is not the case here. The issue as to why negotiation on the need of extra emergency personnel in the presence of specified terms for execution of contract through Purchase order in my opinion does not mean that, the plaintiff would supply labour to the defendant at all time without any issue of Purchase Order which is the perquisite condition for the implementation of the contract. In view of the above this court is satisfied that, the nature of the contract was a framework contract in which its scope was for supply of personnel for a period of one year at the request of the defendant through Purchase Order on the bases of contract general terms and pricing of 13 procured service as provided under Appendix B (Contract price) and any other terms contained in the contract. Next for determination is the third issue as to whether the defendant breached the terms of contract. It is Mr. Rweikiza submission in answer of the issue that, given the nature of the contract exhibit PE2 executable upon happening of emergency needs of workforce and raising of Purchase Order by the defendant, there is no way the defendant could breach its terms before raising any Purchase Order to the plaintiff. That, the purchase order could have stated the number of heads needed, their quality, the place of work and duration as stated by PW1 and PW2. Mr. Kibatala was of the opposite view in that, since the tender documents (advertisement), plaintiff’s bid agreement and contract itself set the requirements in which the plaintiff never breached, it’s the defendant then who breached the contract. I disagree with Mr. Kibatala’s proposition that, it is the defendant who breached the contract for two good reasons. One, as alluded to above the defendant’s tender advertisement document and plaintiff’s bid document never formed part of the terms of contract exhibit PE2 hence the requirements or obligations therein are incapable of being breached and could not have formed the breached terms of agreement under the 14 circumstances of this case. Secondly, since the terms of framework contract under scrutiny (exh.P2) were executable through Purchase Order as per clause 1 under Part 1 of the contract and given the fact that, no single Purchase Order dully issued and not executed by the defendant was tendered in Court by the plaintiff proving the alleged breach of the contract, I am satisfied and therefore arrive to a finding that, the defendant never breached any terms of contract. The third issue is therefore answered in negative. The determination of the fourth issue as to whether the plaintiff suffered the claimed damages is dependent on the response in the third issue. Since the third issue is answered in negative in that, the defendant never breached any term of contract in exhibit PE2 there is no way the plaintiff could have suffered damages arising out of contract in which the defendant did not breach and I so find. I so do as unlike general damages, specific damages claimed by the plaintiff in the plaint must be specifically proved as it was held in litany of authorities some of which are Zuberi Augustino Vs. Anicet Mugabe, (1992) TLR 137, Stanbic Bank Tanzania Limited Vs. Abercrombie & Kent (T) Limited, Civil Appeal No. 21 of 2001 and Reliance Insurance Company (T) Ltd and 2 Others Vs. Festo 15 Mgomapayo, Civil Appeal No. 23 of 2019 (both CAT-unreported). The same cannot be proved without first proving that the defendant breached the complained of contract. The issue is therefore answered in negative. Lastly is the fifth issue as to what reliefs are the parties entitled to. I think this issue need not detain much this Court as the plaintiff has failed to prove her claims on the balance of probabilities as per the requirement of the law. She is therefore not entitled to any relief than dismissal of her suit. In the premises and for the fore stated reasons this suit is wanting in merits and the same is hereby dismissed with costs. Order accordingly. Dated at Dodoma this 12th April, 2024. E. E. KAKOLAKI JUGDE 12/04/2024. The judgment has been delivered at Dodoma today on 12th day of April, 2024, via video conference in the presence of Mr. Gloria Ulomi, advocate for the plaintiff, Mr. Emmanuel Mshana, plaintiff’s director, Mr. Tumaini Michael, advocate for the Respondent and Ms. Eva Msuya, Court clerk, all appearing from Dar es salaam High Court Sub-Registry. 16 Right of appeal explained. E. E. KAKOLAKI JUGDE 12/04/2024. 17