LIVINGSTONE 2

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (DAR-ES-SALAAM SUB-REGISTRY) AT DAR ES SALAAM CIVIL CASE NO. 12863 OF 2024 LIVINGSTONE BURUNDI LTD FORMERLY LIVINGSTONE ADVISORY LTD PUINTIFF RANDHIRSINGH JUDDOO 2^° PLAINTIFF SWASTIKA 3UGURNAUTH 3^° PLAINTIFF LILIAN WILLIAM MUSHI 4^" PLAINTIFF VERSUS SOUTHERN MINERALS(MAURITIUS) HOLDING LIMITED DEFENDANT JUDGMENT S.M, MAGHIMBI.3: In this suit, the Plaintiffs sued the Defendants jointly and severally claiming for declaration that the Defendant has breached the terms and conditions of the Memorandum of Understanding C'the MoU") executed on 19^^ August, 2021. The MoU was In respect of sale and transfer of 100% shares held by the Plaintiffs In Livingstone Advisory (Tanzania) Limited ("the 1^ Plaintiff"), an entity Incorporated and registered In the Republic of Tanzania, with registration No. 147289898,("hereinafter referred to as the Subsidiary Company"). The Piaintiffs further seek for declaratory orders that the said MoU is nuli and void ab initio for w/ant of performance; a deciaration that the act and omission done or executed by the Plaintiffs on one side and the Defendant on the other side towards execution of the aforesaid MoU is nuiiity and further order that the acts and omission done or caused to be done as aforesaid under the MoU be rescinded and parties be ordered to revert back to their originai position as they were before the execution of the said MoU. In their detailed plaint, the Piaintiffs also sought for declaratory orders that the shareholding of the Subsidiary Company and its control be returned and vested to the Piaintiffs and an order for payment of general damages to the tune of USD 500,000.00 (United States Dollars Five Hundred Thousand Only) or any such sum as the Court may in its absolute discretion assess. Finally, the Piaintiffs prayed for cost of the suit and any other order this Court may deem proper and just to grant. The background to this case may, in the interests of brevity, be stated as follows: On the 19"^ August, 2021 the Defendant and the 1^ Plaintiff honoured the said MoU for the Defendant to acquire 100% equity interest by way of sale of shares and control of the 1^ Plaintiff Subsidiary Company, an entity Incorporated and registered in the Republic of Tanzania; with the 1^, Z""*, 3"^ and 4"^ Plaintiffs as the Shareholders and Directors. The MoU also provided for development of the assets given under the prospecting licenses. Upon completion of the terms and condition set forth in the said MoU, the parties were to perform a Share Purchase Agreement("SPA") and complete the share transfer from the Plaintiffs to the Defendant, among other things. As service to the Defendants proved futile despite the efforts done by the Plaintiffs, the suit therefore, ensued ex-parte. In endorsing their case beforehand, the Plaintiffs paraded three (3) witnesses who are the 2"'^, 3"^ and 4^*^ Plaintiffs and tendered ... exhibits. On my part, when I was going through the records, specifically the MoU admitted as EXPl, I have noted that the terms under Clause V of the MoU touches the jurisdiction of this Court to determine the current suit. In the said clause, it is vivid expressed that the governing law provided by the MoU will be by and construed in accordance with the laws of England and Wales. The particular clause read as such: "V. Jurisdiction and Governing Law This MOU will be governed by and construed in accordance with the laws of England and Wales and any dispute. controversy or claim arising out of or in connection with this MOU. including but not limited to any question regarding its existence, validity or termination, shaii be referred to and finally resolved by arbitration The seat of arbitration shaii be the United Kingdom" According to the aforementioned clause, any dispute, controversy or claim arising out of or in connection with this MOU, including but not limited to any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration. The seat of arbitration shall be the United Kingdom. When I probe Mr. Michael Mhina, the learned Advocate for the Plaintiffs to address me on the said clause vis-a-vis the propriety of the matter before the Court, in fact, he prayed for a short adjournment so as to heed to the raised question. When he appeared again before the Court, on 27^ February, 2025, briefly, he submitted that on face of it. Clause 5 of the MoU ousts the jurisdiction of this Court to entertain the matter as the same is vested to the courts of England and Wales. However, he was very attentive in justifying that this Court has proper jurisdiction to entertain the matter for the following reasons: one; he submitted that. Clause 5 of the MoU contravenes with the provisions of Section 11 of the Natural Wealth and Resources (Permanent Sovereignty) Act, 2017. C'the Act"). That, pursuant to the said provision, the Act permanently ousts all the jurisdiction of matters pertaining natural wealth and resources to be adjudicated by judicial bodies or other organs established in the United Republic of Tanzania. He further submitted that, section 11(1) of the same Act prohibits proceedings concerning natural wealth and resources In any foreign court or tribunals. He then argued that, the subject matter of the MoU in question are Mineral Licenses for mines located at Handeni-Tanzania, the fact which falls squarely under the protection of the permanent sovereignty as enshrined in the said Act. That, since the said clause contravenes the provisions of the law, then the said law prevails over the said clause of the MoU as that clause cannot oust the jurisdiction of this Honourable Court vested by the law. He elaborated that under the said Act, natural resources were defined to include minerals or mining. Considering that the MoU was centered on minerals in Tanzania, this Court is vested with jurisdiction to entertain the dispute arising out of the said MoU. Having heard the submissions from the learned Counsel, I will now proceed directly to the merit of this suit. Foremost, I had to revisit the provision of section 7 of the Act which for ease of reference provides: "7. In any arrangement or agreement for extraction, exploitation or acquisition and use of natural wealth and resources, there shall be guaranteed returns into the Tanzanian economyfrom the earnings accrued or derivedfrom such extraction, exploitation or acquisition and use." As hinted above, the law Is clear that any arrangement, or agreement for extraction, exploitation or acquisition and use of natural wealth and resources shall guarantee returns Into the Tanzanian economy. The said section and the subsequent provisions of the law as shall be apparent are In relation to the ownership of natural resources by the Government on behalf of the people of the United Republic of Tanzania. This can be extracted from the Preamble of the Act where It provides: WHEREAS, the Government has resolved to fairly and equitably undertake protracted measures intended to ensure that the natural wealth and resources of the United Republic are used for the greatest benefitand welfare ofthe People and the United Republic by ensuring that aii arrangements or agreements made into by the Government protect interests of the People and the United Republic; AND WHEREAS, it is necessary to make comprehensive statutory provisions to provide for ownership and control over natural wealth and resources and to provide for the protection ofpermanent sovereignty over natural wealth and resources; The preamble indicates that the law was enacted to govern the protection of permanent sovereignty over natural wealth and resources in the agreement made into by the Government in order to ensure that the agreements or arrangements protect interests of the people of the United Republic of Tanzania. This is also articulated under section 4 of the same Act which stipulates that: 4.-0) The People ofthe United Republic, shall have permanent sovereignty over aii-naturai wealth and resources. (2) The ownership and control over natural wealth and resources shall be exercised by and through the Government on behaifofthe People and the United Republic. Flowing from the said section, it prodaims the permanent sovereignty over Naturai Wealth and resources by ensuring that the ownership and controi over naturai weaith and resources is exercised by and through the Government on behaif of the peopie. Further to that, section 5 of the said Act also states that: 5.-(l) The natural wealth and resources shall be Inalienable In any manner whatsoever and shall always remain the property ofthe People ofthe United Republic (2) The natural wealth and resources shall be held In trust by the President on behalfofthe People ofthe United Republic. (3) For purposes ofsubsections (I) and (2)' all activities and undertakings relating to exploration of natural wealth and resources shall be conducted by the Government on loehalfof the People ofthe United Republic. (4) Without prejudice to subsection (3), the Government may, where it considers necessary, authorize any person to perform functions or undertakings relating to exploration of natural wealth and resources In accordance with the laws of Tanzania. More so, under subsection (3) of section 5 entails that, all activities and undertakings relating to exploration of natural wealth and resources shall be conducted by the Government on behalf of the People of the United Republic. In this suit, I have not seen anywhere that In these arrangements there Is an Involvement of the Government to make the current law Into play or applicable. Indeed, In respect to the said section 5(4) of the Act, the Government may, where It considers necessary, authorize any person to perform functions or undertakings relating to exploration of natural wealth and resources In accordance with the laws of Tanzania. On the other hand, for an authorization for the extraction, exploitation or acquisition and use of natural wealth and resources so as to qualify protection under the Act, section 8 of the Act requires that the authorization granted shall be made or given to ensure that the Government obtains an equitable stake In the venture and the People of the United Republic may acquire stakes In the venture. Again Section 12 of the Act gives power to the National Assembly to review these agreements, this Is an Implication that the agreements under scrutiny are the ones in which the Government has Interest on. Now In conclusion, the Act, as cited by the Plaintiffs' Counsel deals with such arrangements or agreements whereby the Government of the Republic of Tanzania or Revolutionary Government of Zanzibar are part of it or have authorized a person to act on their behalf. The question is whether the current agreement is fitting to be for the benefit and on behalf of the people of the URT. As per the plaint, the claim of the Piaintiffs against the Defendant is for deciaration that the Defendant has breached the terms and conditions of the MoU between them dated 19"" August, 2021 in respect to the sale and transfer of 100% shares held by 1^, 1"^, 3'''' and 4'*^ Plaintiffs in Livingstone Advisory (Tanzania) Limited an entity incorporated and registered in the Republic of Tanzania, with registration No. 147289898. They further prayed for an order that the sharehoiding of the Subsidiary Company and its controi be returned and vested to the 1^, 1"^, 3'''' and 4"^ Plaintiffs. The transfer inciuded shares and to deveiop the assets given under the prospecting iicenses. Therefore, at this stage of the MoU, it is only the transfer of shares that was in question because under para 13 of the plaint, the Plaintiffs claim that the change of ownership of the subsidiary Company has been done by the Defendant without lawful consideration. So, what is at stake at the MoU is the transfer of shares in the Subsidiary Company. The primary prayer of 10 the Plaintiffs in their piaint is deciaration that the Defendant has breached the terms and conditions of the MoU executed between the Defendant and the 1^, 1"^, 3"* and 4'^ Plaintiff on the transfer of 100% shares in the 1®* Plaintiff's Subsidiary Company nameiy Livingstone Advisory (Tanzania) Limited. As piain as the ianguage above is, there is no piace that the parties intend to purchase shares on behaif of the Government or where the Government, on behaif of the people is involved. It is a company buying 100% shareholding of a subsidiary of another company. That being the case, one cannot make a conclusion that the agreement to sell 100% shareholding of the 1®* Plaintiff to the Defendant fails under the umbrella of the Act. For that reason, the provisions of the law herein are not applicable to the case at hand. Having so made the above findings, I revert back to the gist of Clause V of the MoU which point out that: "V. Jurisdiction and Governing Law This MOU will be governed by and construed in accordance with the laws of England and Wales and any dispute, controversy or claim arising out of or in connection with this n MOU. including but not limited to any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration The seat of arbitration shall be the United Kingdom" The clause Is forthright, that any dispute, claim or controversy in relation to the termination of the MoU (prayer No. (ii) in the plaint) shall be referred to and finally resolved by arbitration with a sitting in the United Kingdom. The clause is further straightforward that the MoU shall be governed by and construed in accordance with the laws of England and Wales. In consequence, I find this Court's jurisdiction is ousted by the said clause in the MoU. Having decided that, I have no jurisdiction to entertain the present suit, as a result, the suit is hereby struck out. Since the matter proceeded ex-parte, I make no order as to costs. Dated at Dar es salaam this 12"^ day of March, 2025. S.M. MAGHIMBl JUDGE 12