sao hill industries ltd vs nipo group ltd 2023 tzhccomd 204 6 july 2023

IN THE HIGH COURT OF UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION)

AT PAR ES SALAAM (ARISING FROM EXECUTION PROCEEDINGS IN RESPECT OF COMMERCIAL CASE NO. 80 of 2023)

BETWEEN SAO HILL INDUSTRIES LIMITED.......................... DECREE HOLDER Versus NIPO GROUP LIMITED.................................. JUDGEMENT DEBTOR Date of Last Order: 19th June, 2023 Date of Ruling: 6th July, 2023

RULING MKEHA, J. Through Mr. Simon Barlow learned advocate, the decree holder is moving the court for an order of arrest and detention of the judgement debtor's Director, Mr. Hodrum Benedict Suleiman for failure to satisfy a decree. It is important to note that, in the decree sought to be executed, the judgement debtor appears to be one NIPO GROUP LIMITED Upon being served with a summons to show cause, Mr. Hodrum Benedict Suleiman filed an affidavit in view of showing cause. In the said affidavit, 1 I Page amongst other things, the deponent stated that, the mode of execution sought was untenable in law as the person sought to be arrested and detained was not the judgement debtor. During hearing of the application, Mr. Geofrey Lugomo learned advocate for the judgement debtor submitted that, a person who was not the actual judgement debtor could not be arrested without showing reasons for that course. According to the learned advocate, the application lacked reasons as to why a stranger to the decree had to be arrested and detained for failure to satisfy the said decree. Mr. Lugomo learned advocate for the decree holder submitted in reply that, the application indicated that, the decree holder had applied for arrest and detention of the judgement debtor's Director. Neither the application for execution nor the counter affidavit sworn by Mr. Jovinson Kagirwa indicate the reasons

why would the decree holder be justified to proceed against a person who was not part to Commercial Case No. 80 of 2020 whose decree is under execution. The only issue is whether the decree holder has satisfied conditions for the arrest and detention of a person who was not part to civil proceedings which resulted in the decree under execution. In the 2 | Page case of YUSUFU MANJI VS EDWARD MASANJA & ANOTHER (2006) T.L.R 127, it was held that, before the decree holder succeeds in having the veil of incorporation lifted for purposes of execution of a decree he has to prove that, according to the circumstances prevailing at the time of making an application for execution of the decree, there is no real separation between the company and its owners. The decree holder has to prove the company's actions which are wrong and fraudulent, say, concealing assets of the company or doing other acts calculated to obstruct execution of the decree against it and that, unless the veil of incorporation is lifted, the decree holder stands to suffer for not enjoying what the court decreed in his favour. See also: THE GRAND ALLIANCE LIMITED VS MR. WLIFRED LUCAS TARIMO & 4 OTHERS, CIVIL APPLICATION No. 187/16 OF 2019, CAT AT DSM. As indicated hereinabove, the application and the counter affidavit do not indicate reasons for proceeding against the Judgement Debtor's Director. In terms of the two decisions I have cited, merely being a Director of the judgement debtor company does not suffice. The application is therefore refused. Dated at DAR ES SALAAM this 6th day of JULY 2023. 3 | Page

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JUDGE 06/07/2023 Court: Ruling is delivered in the presence of the parties' advocates.

JUDGE 06/07/2023 4 | Page