MAHESHKUMAR RAOJIBHAI PATEL VS KARIM SHAMSHUDDIN SULEMAN COMM CASE NO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL CASE NO. 80 OF 2015 MAHESHKUMAR RAOJIBHAI PATEL................................ PLAINTIFF VERSUS KARIM SHAMSHUDDIN SULEMAN.................................. DEFENDANT 7th December, 2015 & 18th February, 2016 RULING MWAMBEGELE, J.: Against the suit filed by the plaintiff Maheshkumar Raojibhai Patel, the defendant Karim Shamshuddin, through Mr. Audax Kahendaguza Vedasto, learned counsel, has filed a preliminary objection. The preliminary objection is composed of three points; namely: i. The Honourable Court lacks jurisdiction to entertain this matter; ii. The plaint is lacking facts showing that this court has jurisdiction; and iii. The plaintiff seeks to enforce a contract which the law forbids him from enforcing. 1 The preliminary objection (henceforth "the PO") was argued on 07.12.2015 during which Mr. Yudathade Alexander Paul and Audax Kahendaguza Vedasto, learned advocates, appeared for the plaintiff and defendant respectively. The learned advocates had earlier filed their respective skeleton written arguments as dictated by the provisions of rule 64 of the High Court (Commercial Division) Procedure Rules, 2012 - GN No. 250 of 2012 (hereinafter "the Rules") which both learned counsel sought to adopt at the oral hearing. It was Mr. Vedasto, learned counsel, who kicked the ball rolling. He submitted in support of the first point of the PO that the plaintiff claims, inter alia, for payment of USD 3,300,000. He submits that this inappropriate as the courts in this jurisdiction can only award reliefs in Tanzania Shillings. The courts in this jurisdiction have no jurisdiction to grant reliefs in USDs, he submits. The learned counsel has cited Berni & Co. Ltd Vs Lakhani and Others [1970] HCD n. 264 to buttress this proposition. In that case, this court (Georges, CJ) held: "I find that courts in this country can give judgment only in Tanzania shillings". On this take, the learned counsel submits that the suit filed by the plaintiff be dismissed with costs. The learned counsel for the defendant also argues in addition to the first point of objection that the claim is seeking to enforce the laws of Mauritius. The learned counsel urges this court to read the plaint and that by so doing it 2 will realise that the Agreement sought to be enforced (Annexture MRP-1) in which the joint venture is sought to be dissolved is controlled by the laws of Mauritius. The learned counsel submits that the laws of Mauritius do not fall within the group of laws that this country can enforce. The laws that this court can apply and enforce, he submits, falls in four sets: a) The Constitution of Tanzania, 1977 under the authority of Article 64 (5) and 30 (3) of the Constitution of Tanzania, 1977; b) Written laws, under the authority of section 2 (3) of JALA, Cap 358 RE 2002. 'Written Laws,' are defined by section 4 Cap to be Acts of Tanzania and of the Community and subsidiary legislation under them; c) Received laws, under the authority of section 2 of JALA, Cap 358 RE 2002. These are mentioned in s. 2 (3) as common law, statutes of general application and doctrines of equity in force in England as of 22/7/1920; and d) Customary laws, under the authority of section 11 of the Judicature and Application of Laws Act (JALA), Cap 358 RE 2002. Customary law' is defined by s. 4 of the Interpretation of Laws Act, cap 1 to mean ' any rule whereby rights ... are acquired ... by usage in any African community in Tanzania". He states that the agreement between the parties is not enforceable under section 23 (2) of the Law of Contract Act, Cap. 345 of the Revised Edition, 2002 as its obvious object is to defeat the provisions of sections 333 to 346 of the Companies Act, Cap. 212 which provide for special procedure of winding up companies. 3 On the second point of the PO, the learned counsel for the defendant submits that the plaint is lacking facts showing that this court has jurisdiction contrary to the provisions of Order VIII rule 1 (f) of the Civil Procedure Code, Cap. 33 of the Revised Edition, 2002. He states that what is stated at para 10 of the plaint does not show the amount claimed and thus does not meet the requirement of the law. The case of Assanand & Sons (Uganda) Ltd. Vs East African Records Ltd. [1959] E.A. 360 which was followed by this court in Lucas Maiiya Vs Mukwano Industries Limited, Commercial Case No. 60 of 2004 (unreported) is cited in support of this proposition. In addition, the defendant's counsel submits that in the circumstances of this case where the dissolution agreement intended to be enforced is a contract for a dissolution of a limited liability company alleged to have been formed in Mauriutius, the plaintiff was enjoined to state in addition the facts showing that although the company was incorporated in Mauritius, Tanzania courts have jurisdiction. On the third point of PO, the learned counsel for the defendant submits that the contract sought to be enforced is forbidden by section 23 (2) of the Law of Contract Act. The learned counsel submits further that the joint venture dissolution agreement which sought to be enforced is unlawful because under the Companies Act, the procedures of voluntary winding up of a company differ depending on whether it is a voluntary winding up at the instance of members (section 339-346 etc) or voluntary winding up at the instance of creditors (section 347-355). The mode of winding up by the parties is stated in preamble 'F' of the joint venture agreement (annexure MRP-1) in a language which equates it with 'members voluntary winding up' under our 4 Companies Act. Under this Act this process encompasses detailed procedures, conditions and limitations. The requirements include (a) a declaration of solvency (section 338), (b) resolution of winding up (section 333 (1) (b), (c) publication of the resolution of winding up (section 334), appointment of a liquidator (s. 340) to adjust credits and debits of the shareholders, creditors, the government and so on. The learned counsel submits further that a liquidator is not a free person, working on his own wishes. His businesses are statutorily controlled. The Companies Act sets out a total of 14 sections (sections 294 - 307) under the heading 'liquidators'to provide for the business of this person. Among the things the liquidator and the controlling bodies are there to serve are interests of the public at large. In short, he argues, under the Tanzania laws, a company cannot to dissolved by the likes of the Dissolution of the 'Dissolution ofjoint Venture Agreement' which is now in Court for enforcement. So, to continue to hear this claim, the learnded counsel argues, means to do the same business which section 23 (f) & 22 (2) have stated this Court cannot entertain. He thus prays that the suit be struck out with costs. The defendant's counsel has also argued that the plaintiff lacks locus standi in that clause D of the preamble to the contract and clause 1:1 thereof the object of the contract is for the defendant to compensate the plaintiff for the contribution the defendant made in Pwani International Haulers Limited. He submits further that a company is a different person from its shareholders and therefore the plaintiff should have claimed the amount from defendant in the name of company, for it is the company, if at all, to which he is indebted. 5 In the same line of argument, the defendant counsel argues that the plaintiff should have sued the company because the case before the court is a case by the plaintiff to ask the court to order the defendant to repay the plaintiff the money allegedly paid in excess by the plaintiff; not to the defendant but to Pwani International Hauliers Limited. Thus the plaintiff wants the court to order the defendant to repay him money he paid in excess to a third party. This he submits is against our public policy in terms of section 23 (1) (e) of the Law of Contract Act and therefore unenforceable under section 23 (2) of the Act. On the strength of all the above, the defendant's counsel urges the court to dismiss the suit with costs. On the other hand, the plaintiff's counsel submits on the first point of PO that courts in this jurisdiction can grant reliefs in USD. He states that the Lakhani case cited by the learned counsel for the defendant in support of this point is no longer the position in this country. The learned counsel cites Renair Limited l/s Phoenix Tanzania Assurance Company Limited, Civil Case No. 77 of 2009 (unreported) in which the court of appeal granted relief in USD. On the point that this court will be enforcing the laws of Mauritius, the learned counsel for the plaintiff states that the objection goes into the merits of the case. He argues that a PO cannot be raised in any fact which has to be ascertained in the course of deciding it. He cites Karata Ernest & others Vs Attorney General, Civil Revision No. 10 of 2010 (unreported) to support this point. 6 Regarding the objection that the plaint does not have the facts showing that the court has jurisdiction, the learned counsel for the plaintiff argues that the facts contained in para 10 of the plaint are enough to show that this court has jurisdiction to entertain and hear the case. He states that the cases cited by the learned counsel for the defendant dealt with situations where such clause was completely omitted. On the objection to the effect that the plaintiff is seeking to enforce a contract which is not enforceable at law; the contract being forbidden by law, the plaintiff lacking locus standi and the plaintiff claiming against a wrong person, the learned counsel reiterates the position that discussing the annexture at this stage is tantamount to going into the merits of the case which is not permissible under the authority of the Karata case (supra). The plaintiff's counsel states further that the amount claimed is USD 3,300,000 which is a huge sum of money within the pecuniary jurisdiction of this court. In the alternative, the plaintiff's counsel submits that they be allowed to amend the plaint under the provisions of rule 24 (1) of the Rules so that the amount is shown in Tanzania Shillings. On the arguments above, the learned counsel for the plaintiff submits that the PO should be dismissed with costs. In rejoinder, the learned counsel for the defendant states on the first point of PO that the decision of Gorges, CJ has not been overruled by any superior court and urges this court to follow the principle in Tambueni Abdallah & 7 89 others Vs National Social Security Fund, Civil Appeal no 33 of 2000 (unreported) at page 9 that the Renair case (supra) cited did not overrule the Lakhanicase. That since the Lakhanicase has not been overruled, it is binding upon this court as was heard in the Jumuiya ya Wafanyakazi Tanzania Vs Kiwanda cha Uchapishaji cha Taifa [1988] 146, at 153 in which it was held a subordinate court should be bound by its earlier decisions. On the alternative prayer by the learned counsel for the plaintiff to have the plaint amended so as the amount claimed is shown in Tanzania Shillings, the learned counsel for the defendant submits that this is not permissible. He promised to avail to the court with authorities on the subject and indeed the learned counsel walked the talk. He supplied Kantibhai M. Patel Vs Dahyabhai F. Mistry [2003] TLR 437, Petromark Africa Ltd &3 ors Vs Exim Bank (T) LtdCwW Appeal No. 58 of 2012. He also supplied a book he authored titled Laws Applicable and International Conflict of Laws in Tanzania, Idea International Publishers, Dar, 2009, pp 6 - 10 to buttress the point that Tanzania courts cannot apply the laws of Mauritius. As for clause 12 of the Joint Venture Agreement the learned counsel submits that it is of no consequence as parties cannot confer jurisdiction upon the court. An unreported decision of this court in Samwel Mjema Vs Editha Philipo, Civil Appeal No. 101 of 2013 is cited in support of this proposition. He adds that clause D of the Joint Venture Agreement shows that there is third person and as per Salomon Vs Salomon and Company [1895-9] All ER 33; also reported in [1897] AC 22, a company is a different person from its shareholder. 8 Let me start by pointing out the fact that the learned counsel for the defendant fronted in the PO three points of objection as shown at the beginning of this ruling. However, when arguing the same; in both skeleton argument and oral hearing the learned counsel added one more point of objection; the question of locus standi. This has been responded by the learned counsel for the plaintiff but the obvious is no notice was given thereof. It has been stated more often than not that a PO must be raised in time and on reasonable notice - see M/S Majembe Auction Mart ks Charles Kaberuka Civil Appeal No. 110 of 2005 (unreported). In that case, the Court of Appeal stated reasons why a PO must be raised in time and on reasonable notice in the following terms: "... reasonable notice of the preliminary objection is to be given to the other parties including the appellant as in this case. The logic behind this provision hardly needs to be overemphasized. With the notice given within reasonable time, the other parties ... would not be taken by surprise. In that situation the parties would be in a position to respond in advance to the issues raised in the preliminary objection. It is to be emphasized that in fairness to the parties and in the interest of justice, counsel intending to raise preliminary objection are enjoined as far as possible to serve the notice of preliminary objection within reasonable time." 9 In the case at hand, Mr. Yudathade for the plaintiff did not raise any alarm at this point of objection being raised without notice. Instead, as already said, he responded to this point of preliminary objection on which no prior notice was given and I commend him for this. Be it as it may, and for that reason, I will consider this point in this ruling despite its being raised without notice. In determing the PO, I propose to put into one basket the points respecting enforcing a contract which the law does not allow, the plaintiff lacking locus standi, the plaintiff suing a wrong party and the plaintiff seeking to enforce the laws of Mauritius. I have put these points together because, I think, as rightly put by Mr. Yudathade, learned counsel for the plaintiff, they need factual proof and touch upon the merits of the case. In arguing these points of objection, the learned counsel for the defendant made heavy reliance on the Joint Venture Agreement and its contents. Going into the contents of the Joint Venture Agreement disqualifies these points to fall within the realm of a preliminary objection. That this is the law has been stated in a number of cases in this jurisdiction. These cases have been drawing inspiration from the oft-cited Mukisa Biscuit Manufacturing Co Ltd Vs West End Distributors Ltd [1969] 1 EA 696. This case is so notorious and it is an authority for the point that a preliminary objection should be on matters of law and that a preliminary objection which requires factual proof to prove it is not a preliminary objection. It should suffice to quote what was said by Law, JA as to what His Lordship considered would be preliminary objection. His Lordship stated: "So far as I am aware, a preliminary objection consists of a point of law which has been pleaded, io or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the Court, or a plea limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration." The case has been consistently followed in this jurisdiction ever since it the formulated principle. Such cases which have followed Mukisa Biscuit include the Karata case cited by the counsel for the plaintiff, Shakida Abdul Hassanaii Kassim Vs Mahd Mohamed Guiamaii Kanji, Civil Application No. 42 of 1999 (unreported), Leila Jalaludin Haji Jamal Vs Shaffin Jalaludin Haji Jamal, Civil Case No 373 of 2001 (unreported) Citi Bank Limited Vs TTCL and 3 others, Civil Application No. 64 of 2003 (unreported) and Mohamed Enterprises (T) Ltd Limited Vs Masoud Mohamed Nasser, Civil Application No. 33 of 2012 (unreported), to mention but a few. This position is now settled law in our jurisdiction. In the present case, deciding on this group of points of the PO would entail, as the learned counsel did, travelling through the contents of the Joint Venture Agreement which, as I have said above, disqualifies the point to fall within the realm of preliminary objection. I would therefore, without hesitation, overrule all the points falling within this basket. This takes me to the point the remaining points of the PO. The first point is that this court has no jurisdiction to entertain and grant reliefs on any 11 currency other than Tanzania Shillings. The learned counsel has cited an authority; the decision of this court in the Lakhanicase which was decided in 1970 in which the court (Georges, CJ) held that courts in this jurisdiction case enter judgment only in Tanzania Shillings. I have read the digest of the case as reported in the High Court Digest of 1970. His Lordship decided the case relying on the provisions of section 2 (2) of the then Judicature and Application of Laws Ordinance, Cap 453 (now the Judicature and Application of Laws Act, Cap 358) and Manners Vs Pearson & Son [1898] 1 Ch. 581 and decided that in England as at the reception date, courts would only grant reliefs in pound sterling. From that premise, His Lordship, the then Chief Justice of Tanzania, reached a verdict that Tanzanian courts would only give judgment in the Tanzanian currency. Mr. Vedasto, learned counsel for the defendant has urged me to be bound by the authority arguing that it has never been overruled and therefore it binds me. He relies on Jumuiya ya Wafanyakazi Tanzania (supra) for this proposition. With unfeigned respect to the learned counsel, I am not prepared to accept this proposition. The Lakhani case was decided by this court. Then, appeals from the High Court of Tanzania lied to the Court of Appeal for East Africa. Decisions of the High Court of Tanzania were therefore not final; appeals against them lied to the Court of Appeal for East Africa before which, they lied to the Privy Council - see: Dodhia Vs National & Grindiays Bank Ltd & another [1970] EA 195 and Jumuiya ya Wafanyakazi Tanzania, the decisions of Court of Appeal of East Africa and the Court of Appeal of Tanzania respectively. 12 The Lakhani case was decided by the High court of Tanzania; it does not therefore bind me. However, as a matter of prudence, I am supposed to respect it and whenever I feel like having a different opinion, instead of dissenting lightly to the considered decision of my fellow judge, I have to give reasons for taking that course. This is practically so because, as was stated by this court [Bwana, J. (as he then was)] in ULC (Tanzania) Limited l/s National Insurance Corporation And Another [2003] TLR 212, Judges of the same Court should not give conflicting decisions over similar issues, unless it is absolutely necessary. And in Ally Linus & 11 others Vs Tanzania Harbours Authority & Another [1998] TLR 5, the Court of Appeal at p. 11, underlined the need for a judge to not lightly dissent from the considered opinions of his brethren. The Court of Appeal articulated: "... it is not a matter of judicial courtesy but a matter of duty to act judicially which requires a judge not lightly to dissent from the considered opinions of his brethren." Now let me revert to the subject at hand. I wish to state that a lot of water has passed under the bridge ever since the Lakhanicase was decided that in the present jurisprudence in this jurisdiction, courts now award reliefs in USD. There is a string of cases of the Court of Appeal in which such course has been taken. One such case is the Renair case; a case cited by the learned counsel for the plaintiff. Other cases include Stanbic Bank Tanzania Limited Vs Abercrombie & Kent (T) Limited, Civil Appeal No. 21 of 2001, Arabian Ventures Zanzibar Limited Vs t/a Ocean Paradise Resort Vs Max Village Limited & 2 Ors , Civil Appeal No. 120 of 2015, DT Dobie 13 (Tanzania) Ltd Vs Phantom Modern Transport (1985) Ltd, Civil appeal No. 74 of 2002; unreported decisions of the Court of Appeal and Tanzania Steel Pipes Ltd Vs Y. K Yong, Commercial case No. 41 of 2007 an unreported decision of this court, to mention but a few. I have found it difficult to comprehend the argument by Mr. Vedasto, learned counsel for the defendant when he argues that the Renair case did not overrule Lakhani. I think the learned counsel wanted the Court of Appeal to state in no uncertain terms that Lakhani has been overruled. But the Court of Appeal could not have stated so because that was not the issue in that case. What is obvious from the learned authorities cited above is that, presently, courts in this jurisdiction give judgments in currencies other that the national currency; the Tanzania Shilling. That means that the Lakhani case has, technically, been overtaken by events. The Lakhani case was therefore good law then but, by lapse of time and practice, it has lost its strength given the new development in the jurisprudence of this court on the matter. I would therefore overrule the first point of PO. Another point of PO is about facts showing that the court has jurisdiction. The learned counsel for the defendant submits that the plaint is devoid of facts showing that this court has jurisdiction to try this case. This, he states, offends the provisions of Order VIII rule 1 (f) of the CPC. He states that what is stated at para 10 of the plaint is not sufficient as it does not show the amount claimed and thus does not meet the requirement of the provisions of Order VIII rule 1 (f) of the CPC. The Assanand & Sons and Maiiya cases 14 are cited in support of this proposition. On the other hand, the plaintiff's counsel states that what is stated at para 10 of the plaint is sufficient to show that this court has jurisdiction. Let me, first, for easy reference, quote para 10 of the plaint. It reads: "That the parties live in Dar es Salaam and the amount claimed is within the jurisdiction of this court." As evident in the paragraph, there is no amount stated. The learned counsel for the defendant is of the view that this omission is fatal. The amount is stated elsewhere; at para 3. Respectfully, I do not think this is fatal. I find fortification in Mogha's Law of Pleadings in India (18th Edition) by S. N. Dhingra and G. C Mogha in which it is stated at p. 271 that: "The jurisdiction can be of three types, territorial jurisdiction, subject matter jurisdiction and pecuniary jurisdiction. A plaintiff is supposed to specify all the three types of jurisdiction in the plaint. He must specify how the territorial jurisdiction of the court was being invoked and whether the court has jurisdiction over the subject matter and if the suit fell within the pecuniary jurisdiction of the court." In my considered opinion the contents of para 10 of the plaint, read in context of the whole plaint, is sufficient to show that the court has the three 15 kinds of jurisdiction envisaged by the law; that is, the provisions of Order VIII rule 1 (f) of the CPC. Failure to particularise in a specific paragraph that the court has jurisdiction is not, in my view, an incurable ailment. I would therefore overrule this point of PO as well. The foregoing disposes of all the preliminary points of objection raised by the defendant. However I wish to state at this juncture on the prayer by the counsel for the plaintiff to the effect that he should be allowed to amend the plaint so that the claim is put in Tanzania Shillings. This prayer has met a strenuous objection from Mr. Vedasto; learned counsel for the defendant. He has cited the Kantibhai and Petromark cases to back up his strenuous objection. I think Mr. Vedasto is right. In view of what I have found and held above, the prayer seems to be redundant. I wish to reiterate that Mr. Vedasto is right when he states that the course is unacceptable. The course suggested is illegal and therefore not maintainable at law. He is, I repeat, right. I shall demonstrate. Taking the course suggested by Mr. Yudathade; counsel for the plaintiff, to allow an amendment of the plaint after the preliminary objection has been raised would mean pre-empting the preliminary objection raised by the defendant which course is illegal. That this is the law has been stated times without number in a string of cases in this jurisdiction. If I would be required to cite one such case, I would cite Mary John Mitchell Vs Sylvester Magembe Cheyo & ors, Civil Application No. 161 of 2008 (unreported) in which the Court of Appeal reiterated its earlier position it stated in Method 16 Kimomogoro Vs Board of Trustees of TANAPA, Civil Application No. 1 of 2005 (also unreported) in which it stated: "This court has said in a number of times that it will not tolerate the practice of an advocate trying to pre-empt a preliminary objection either by raising another preliminary objection or trying to rectify the error complained of." This was not the first case the Court of Appeal gave this guidance; that a preliminary objection should not be pre-empted. The court of appeal had an opportunity to state the principle in Shahida Abdul Hassanali Kassam Vs Mahedi Mohamed Gulamali Kanji Application No. 42 of 1999 (Unreported), Almas Iddie Mwinyi Vs National Bank of Commerce & Another [2001] TLR 83, Alhaji Abdallah Talib Vs Eshakwe Ndoto Kiweni Mushi [1990] TLR 108, The Minister for Labour and Youth Development and Shirika la Usafiri DSM Vs Gaspa Swai & 67 Others [2003] TLR 239] and Frank Kibanga Vs ACCU Ltd, Civil Appeal No. 24 of 2003 (unreported), to mention but a few. Thus, even if I had sustained the objection by the learned counsel for the defendant that courts in this jurisdiction would only grant reliefs in Tanzanian Shillings, I would not have allowed Mr. Yudathade amend the plaint to rectify the ailment for the reasons stated. The above said and done, and for the reasons stated hereinabove, the three point PO raised by Mr. Vedasto, learned counsel for the defendant, including 17 an additional one raised without notice which surfaced in the skeleton arguments and the oral hearing, is overruled in its entirety with costs. The suit filed by the plaintiff should proceed for hearing on merits on a date to be slated today. Order accordingly. DATED at DAR ES SALAAM this 18th day of February, 2016. J. C. M. MWAMBEGELE JUDGE 18