maswi drilling co ltd vs sengerema district council 2020 tzhccomd 2017 10 july 2020

IN T H E H IG H C O U R T O F T A N Z A N IA (C O M M E R C IA L D IV IS IO N )

A T M W AN ZA C O M M E R C IA L C A S E N 0 .0 3 O F 2 0 19 M A SW I D R IL L IN G C O . L IM IT E D .............................................. P L A IN T IF F

VERSU S S E N G E R E M A D IS T R IC T C O U N C IL .................................. D E F E N D A N T

JU D G E M E N T Date of the Last O rd er: 08/07/2020 Date of the Ruling: 10/07/2020 N A N G E L A , J.: The Plaintiff, a private company registered under the laws of the United Republic of Tanzania, is suing the Defendant Sengerema District Council, a local government established under the Local Government (D istrict Authorities) Act, Cap. 287, [R.E.2002]. The Plaintiff prays for judgement and decree for the following: I. An order of the court requiring the Defendant to pay the Plaintiff a principal sum of TZS 82,174,304.29, being part- payment of Certificate No. I issued in respect of various works of drilling of boreholes carried out by the Defendant; the costs of the preliminary and general activities, and the costs of geographical survey carried out in relation to the project; Page I of 34 2. An O rder that the Defendant pay the Plaintiff general damages amounting to TZ S 50,000,000/- arising from the Plaintiffs failure to apply and compete in other activities/projects due to lack of funds; 3. That, the Defendant be compelled to pay interest on the decretal amount at court rate from the date of judgment till when the decree is fully satisfied; 4. Costs of this suit 5. Any other relief(s) this honourable court may deem just and fit to grant. I will briefly state the facts constituting this case as may be gathered from the pleadings filed in Court by the parties. It all

started on 10thJuly 2017, when the Defendant awarded the Plaintiff a contract No. LGA/094/WSP/W/2016-2017/Q/02. The contract was for the purposes of executing works of drilling boreholes, the completion of which was estimated to be on 23rdSeptember 2 0 17. It is alleged that, the Plaintiff managed to execute the said works within the prescribed time and handed it over to the Defendant, who issued the Plaintiff with an approved Interim Certificate No. I, amounting to TZS 107,440,000.00/=. The Plaintiff alleges, however, that, the Defendant made only a partial payment of T Z S 74,104,170.50/= and refused or neglected, without any reasons, to pay the remaining balance of T Z S 33,333,829.59/=, a fact which was contrary to the requirement of the Special and General Condition of the Contract. The Plaintiff alleges that, due to such refusal to pay the whole amount claimed within 14/28 days, the same has accrued interest amounting to T Z S 18,840,474.79/=, which, together with other costs, constitute a total claim of T Z S . 82,174,304.29. On 31st March 2018, the Plaintiff sent a demand note to the Defendant demanding for payment of the Page 2 of 34 claimed amount within 30 days, but the Defendant failed to honour the demand, hence a Plaintiff Board's resolution was passed to institute this suit. On 18th April 2019, the Defendant filed its written statement of defence. In her defence

the Defendant denied the claims, although admitted that there were changes made to the original contract, which, nevertheless were of no effect to the original contract price. W ith such denial of the claim by the Plaintiff, the Defendant prays for the dismissal of the Plaint with costs. It is unfortunate that the parties could not mediate or settle their grievances amicably. As such, the same had to go to trial. On 04thOctober 2019, in agreement with the parties during the final pre­ trial conference, the Court settled for the following issues: /. Whether the Plaintiff owes the Defendant the sum o f TZS 82, i 74,304.291- 2. Whether there was a breach o f the Contract between the Parties.

3. What reliefs are the Parties entitled to. Initially, the speed track of this case was set for 10 months, which means that the case ought to have ended, on 8th April 2020, the latest. However, for reasons which may be gathered from the record, the same could not be finalized as planned. Consequently, on 29th June 2020, when this suit was called on for its hearing, the Court, upon an oral application supported by all parties, extended the lifespan of this case to a further three months. During the hearing of the suit, the Plaintiff was represented by Mr. Maligisa Sakila, learned advocate, and Mr. Serapian Matiku, learned counsel/solicitor, represented the Defendant. W hen the Plaintiffs case opened, the Plaintiff called one witness, Mr. Payeka, Hajji Kibou who testified as P W I. P W I's statement filed in this C ourt in line with the requirements of Rule 50 ( I) ad (2) of GN.250 (as amended) was adopted and admitted as constituting his testimony in chief. In Page 3 of 34 his testimony in chief, P W I told the Court that, he holds a bachelor of science degree in environmental engineering and joined the Plaintiff Company in 2 0 17. P W I testified that, on 7th October 2017, the Defendant awarded the Plaintiff a contract No. LGAI094IWSPIWI20I6-20I7IQI02, to execute works of drilling boreholes in Nyamililo and Kanyerere Villages which works were estimated to come to an end on

23rd September 2017. P W I sought to be admitted into evidence the document constituting the contract and the same was admitted as Exh.P. I . PW I told the Court that, the agreed contract sum was TZS 107,197,000,000 (V A T exclusive). According to P W I, the Plaintiff did not receive any advance payment from the Defendant but had a loan facility sourced from the K C B Bank. P W I tendered into Court a certified copy of the loan facility which was processed and issued to the Plaintiff since 2 0 15. The learned counsel for the Defendant sought to challenge it admissibility but the Court overruled his objection, since the document tendered was a certified true copy whose original was said to be left with the Bank. The loan facility between the Plaintiff and the Defendant was admitted as Exh.P-2. PW I further testified that having executed the works to their completion, the Plaintiff informed the Defendant and attached the requisite claims to the respective notice of completion of works. The claims concerned the works completed and the sum claimed was T Z S 131,670,000.00. P W I sought to be admitted into evidence the notice of completion and the amount claimed (which was a letter with Ref.No.MSW/SNGRM/01-08/2017) and the same was admitted as Exh.P.3. P W I told the Court that, on 18th August 2 0 17, the Defendant approved a payment of T Z S 107,440,000/- to be paid to the

Plaintiff vide an Interim Certificate N o .i. The said Certificate was tendered into evidence and admitted as Exh. P4. It was a further testimony of P W I that, there was an inspection Page 4 of 34 carried out on the works executed and a report to that effect was produced with recommendations that the performed works were acceptable. P W I sought to be admitted into evidence the inspection report, which was admitted and marked as Exh.P-5. P W I told the Court that, after the report was issued, the Defendant, on 14th September 2017, varied the original w ork sites and directed the Plaintiff to relocate the drilling activities from the original drilling site in N/amahona Village and implement such in Kasungamile Village. PW I sought to be admitted into evidence a letter, Ref. No.CA.370/121/88, dated 14th September 2017, and which was admitted and marked as Exh.P.6. The reasons for such site relocation were the changes introduced by the Defendant, some of the designated sites during the survey activities were found to lack enough yield and, hence, not recommended for drilling. In his testimony in chief, P W I testified that, the Defendant's instruction to shift sites from Nyamililo, Nyamahona, and Nyamatongo Villages to Kasungamile village, caused extra-costs for preliminaries and general activities to implement the same, which costs were not honoured by the Defendant although the

same were communicated to the Defendant. P W I further told this Court that, on 28th December 2017, the Plaintiff received a part-payment in respect of the earlier approved payments for Interim Certificate No. I, amounting to T Z S 7 4 ,10 4 ,170.50/. P W I stated that the sum paid was less than the earlier approved sum of T Z S 107,440,000/- (less by T Z S 33,335,829.50J. Following such part-payment, P W I told the Court that, on 03rd March, 2018, the Plaintiff w rote to the Defendant claiming for the balance, together with the additional costs incurred as a result of the site relocation exercise, all amounting to T Z S 40,607,000/=. Further that, on 31st March 2018, the Plaintiff sent a demand note to the Defendant in respect of the claimed balance. P W I sought to be admitted into evidence a letter from the Plaintiff to the Defendant demanding for such Page 5 of 34 amount. The letter Ref.MDC/SDC/02/2018, dated 03rd of March 2018 and the Demand Notice, both requesting for a balance of T Z S 40,607,000/= were admitted as Exh.P.7 and Exh.P.8 respectively. P W I told the Court that, on 29th April 2018, the Plaintiff Company's Board of Directors resolved that a suit be filed against the Defendant claiming a total of T Z S 7 4 ,50 0 ,7 5 0 .56 , which sum included the principal amount equal to T Z S 40,607,000/=and its accrued interest. P W I sought to be admitted into evidence

the Board Resolution, and, there being no objection from the Defendant, the Resolution was admitted into evidence and marked as Exh.P9. P W I told the Court that, in total, therefore, the Plaintiff claims from the Defendant a sum of T Z S 82,174,3041. According to P W l's testimony in Chief, this claim constitutes specific damages which are accounted for as follows: 1. Principal amount..........................................TZS 33,333,829.50/= 2. Costs for surveying two (2) boreholes....TZS 14,000,000.00/= 3. Preliminary and General costs at: • Nyamahona Village to Kasungamile...TZS 8,000,000/= • Nyamatongo...............................................TZS 8000,000/= • Accrued Interest for late payment....TZS 18,840,479.79/= • The total amount claimed............ T Z S 8 2 ,174,304.29/=. P W I stated further, that, the Plaintiff claims for general damages amounting to TZ S 50,000,000/- and costs of the suit. Upon being cross-examined by Mr. Matiku, learned counsel for the Defendant, P W I maintained that the amount claimed is T Z S 82,174,304.29/. He told the Court that, what was claimed in the demand note wasT Z S 40,607,000/= which claim arose from the pending unpaid amount for Certificate N o .I, which was for T Z S 33,333,829.50/= and T Z S 7,000,000/- which were amount spent as costs of surveying for the boreholes drilling activities at Nyamahona. Page 6 of 34 P W I

further maintained that, up to January there was accrued interest, which made the total amount claimed to be TZ S 8 2 ,174,304.29/. W hen cross- examined by the learned counsel for the Defendant, P W I told this C ourt that, T Z S 25 million (plus) were spent on the Nyamatongo borehole and the same were not paid to the Plaintiff on the ground that the borehole was unproductive as it was not yielding enough water. When asked whether it was proper to pay such amount contrary to the existing water policies implemented by the government, P W I told the Court that the government water policies are never constant and what matters and governing the parties is the contract they signed and of which, the w ater policy has never part of. P W I further stated, while under cross-examination, that, borehole yields are never constant, and the contract entered into between the parties was silent regarding unproductive borehole. He told the Court that a hydrological survey report sent to the Defendant by the Plaintiff had indicated that the yield of the drilled borehole was 800litres /hr. P W I acknowledged that the Plaintiff did conduct a hydrological survey before drilling the boreholes, but denied to have conducted pumping tests which are vital in ascertaining the available quantity (volume) of water. Referring to Exh.Pl, P W I acknowledged that, the document attached and forming Exh.PI

had made an assurance that the available quantity (volume) of w ater from the boreholes was 800\t!hr. He insisted that even if no such amount was obtained, the Defendant has to pay the Plaintiff as per the contract. As regards Exh.P6, upon being cross-examined, P W I told the court that, the Plaintiff filed a response to Exh.P.6 as they were being relocated to Kasungamile Village from Nyamahoma where one borehole was found to be dry. Although P W I acknowledged that Exh.P.6 has made it clear that the shift was to be carried out without altering the contract sum, he stated that, the Plaintiff considered that, if there was variation in the contract, it is expected that the agreed rates would also change, and that is why the Plaintiff claimed what is his paragraph 10 of the Plaint. Page 7 of 34 W ith regard to Exh.P.2, P W I stated, while under cross-examination, that, the monies were borrowed in 2015, and were afterwards spent in 2017, as the Defendant did not give the Plaintiff any advance payment to execute the contracted works. P W I maintained that, delayed payments, is what attracted the accrued interest. During re-examination, P W I told the court that, the agreement signed by the parties did not have a clause regarding the volume of water (yield) per one borehole. P W I clarified that, that, the Plaintiff submitted to the Defendant a completion report and not a letter of

assurance and that, the parties did not discuss the relocation of sites as the letter from the Defendant had made it clear that the costs would offset each other. A t this juncture, since the Plaintiff had only one witness, the Plaintiffs case came to a closure paving way for the defence case. However, the defence case could not proceed on the same day and the suit was adjourned till 8th of July 2020. A t the commencement of the hearing of the defence case on 8th July 2020, the parties were represented by the same learned counsel who appeared on 29thJune 2020. Mr. Matiku took the floor and informed this Court that, the Defendant had only one witness, one Nicas Ligombi, who is currently the Geita Regional Manager for Rural Water Supply Agency (RUWASA). Testifying in Court as D W I, Mr. Ligombi, prayed to adopt his statement, earlier filed in this Court, as his testimony in chief, and, the Court proceeded to grant that prayer. D W , informed the Court that, it was true that sometime in July 2017, the Plaintiff was contracted by the Sengerema D istrict Council to carry out works which involved, among others, the drilling of productive boreholes in five villages, namely: Nyangalilo village, Nyamahona, Nyamatongo, Nyangalilo, Mulaga and Imalamawazo villages. The contract sum agreed, was T Z S 107,000,000/. D W , submitted, however, that, afterwards as a result of some variations to

the initial contract, an addendum was added to the initial contract which was worthy of about T Z S 32,000,000/. He tendered in court a letter, Page 8 of 34 Ref.No.CA.370/12 1180, dated 6th July 2017, informing the Contractor (the Plaintiff) about the variations to the contract. This letter was admitted into evidence as Exh.DI. D W | informed the Court that, the Plaintiff was only able to strike water in three villages of Mulago, Nyangalilo and Imalamawazo while in Nyamatongo Village, the borehole was found to be unproductive, and the borehole drilled in Nyamahona Village was found to be completely dry. D W , informed the Court that, since the two boreholes w ere unproductive, the D istrict Executive D irector for Sengerema D istrict Council sent a letter on 14th September 2017 and informed the Contractor to relocate activities to Kasungamile Village in Sengerema. The letter was clear that the costs for the Nyamahona Village were now to be imputed on Kasungamile drilling site. The letter was tendered in Court and admitted as Exh . D2 (a ). D W I further told the Court that, on 23rd October 2017, the Defendant w rote a letter to the Plaintiff (Contractor) informing him about the unproductiveness of the Nyamatongo borehole. It was stated that, earlier the Plaintiff had indicated in the its Hydrological Report sent to the Defendant that, such a borehole had the capacity to pump

800 L /h. D W I tendered, as an exhibit, the said letter which was admitted into evidence as Exh . D 2 (b). It was D W I's further testimony that, on 8th November 2 0 17, the Defendant received a letter from the Plaintiff responding to the DED's letter which raised the issue of the unproductive boreholes and promised to send a team of engineers who would re­ survey the two villages of Nyamahona and Nyamatongo. The letter from the Plaintiff, Ref.No.MSW-SDC-2017-2018-001, was tendered and received into evidence as Exh . D .3. However, D W I stated that, to date the Contractor failed to carry out the re-surveying as earlier stated in Exh.D3 and, instead, through a letter, Ref.MDC/SDC/02/2018, the Plaintiff submitted a claim of TZS 40,607,000/ to the Defendant. Page 9 of 34 D W I testified that the claim was problematic because it seemed to have included: (a) TZS 25,070,0001, a claim in respect of the drilling of Nyamatongo borehole, payments which the Defendant disputed and withheld given that the government does not make payments for dry or unproductive boreholes. (b) TZS 15,000,000f which the Defendant disputes as they include withholding taxes of TZS 3,911,2001. (c) TZS 4,118,500/ which amounted to retention sum, which amount is ordinarily made payable after the lapse of the defects liability period. (d) TZS 233,016 /- which is an amount payable as service levy in accordance

with the law and other charges which were yet to be settled. D W I informed the C ourt that, on 18th April 2018, through a letter Ref.No.370/121/86, the Defendant sent clarifications to the Plaintiff regarding why the claimed amount will not be considered given that the Nyamatongo borehole was unproductive contrary to the earlier Process Drilling Report submitted by the Plaintiff, which had indicated that, the yield capacity was 800L/h. D W I stated that, the Report was used for the preparation of the Interim Certificate for the purpose of preparing payments to the Contractor. D W I tendered in C ourt the Process Drilling Report, which was admitted into evidence and marked Exh . D 5. D W I testified that in that Report, the Plaintiff had convinced the Defendant that the Nyamatongo borehole had a yield capacity of 800 L/h, meaning that the borehole was productive. However, according to D W I, the borehole was below 400L/h and hence the Plaintiff did not qualify to be paid as there would be no value for money. It was D W I 's further testimony that, the basis of withholding the TZ S 25,000,000/ was the guidelines (Circular) issued by the Ministry of Water and Irrigation to all Regional Administrative Secretaries, which, under paragraph 4.1.4 (page 6-7) it Page 10 of 34 directs that, payments for drilling of boreholes should be made only to productive boreholes. D W I tendered

into this C ourt the particular Circular which was admitted into evidence as Exh. D 6. As regards the Plaintiffs total claim of T Z S 82,174,304.29, D W I stated that such is not a correct claim because, it contains the 25,000,000/- and interest thereon, which should not be paid because the problem is not with the Defendant but the Plaintiff who did not honour his own promise of carrying out the re­ surveying. Further, that, the claim also, contain the retention monies which the Plaintiff should to have claimed from the Defendant without filing this suit. D W I stated further that, the claim includes statutory amounts, such as service levy and withholding taxes. DW I admitted, however, that, the Plaintiff is entitled to TZS 7.000.000/= which is an amount covering the costs of carrying out hydrological surveys in Kasungamile Village. He prayed that the same be awarded to the Plaintiff while the rest (such as the retention amount) should be claimed as per the official procedures, otherwise the suit be dismissed. W hen cross-examined by Mr. Maligisa, D W I told this Court that, he was fully involved in preparing E x h . P. I . He told the Court that, there is no a clause in Exh . P. /, which adopted the Government Circular (guidelines (E x h . D 6)) as part of the Agreement (Exh.P . /). He stated furhter that, according to Exh.PI, payments to the contractor were to be effected

within 14 days after the Interim Certificate was approved by the Engineer. DW I further told this Court that, he recognizes Exh.PS which was written on 28th August 2 0 17 and that, the last paragraph refers to the drilling of five boreholes in the Villages of Nyamililo, Nyangalilo, Nyamatongo, Mulaga and Imalamawazo, and that, the boreholes were in use by the Community. He said, however, that, the withholding of the T Z S 25,000,000 for Nyamitongo was properly done as the borehole drilled there was a dry borehole, and, that, the Page I I of 34 decision was reached after the Defendant conducted a physical testing (manual pumping). D W I told the Court that the Interim Certificate was provisional, and, hence, subject to some changes since the Contractor had triggered payment requests on the basis of the Process Drilling Report. D W I reiterated that the physical testing of the borehole, which was carried out a month after the drilling, indicated a yield capacity which was less than 400L/h. D W I stated further, that, the capacity or yielded volumes need not be stated in the contract since the Plaintiff (as a company) was contracted based on its skills and expertise as a Class-1 contractor and knows the standard output for a productive borehole, which is from 800L/h. D W I stated that, that is the reason why the Plaintiff promised to rectify the situation at Nyamatongo

unproductive boreholes but he did not honour the promise. D W I told the Court further that, according to standard operational data, productive boreholes such as those drilled by the Plaintiff, are supposed to serve up to 200-250 people. However, those found to be unproductive were able to serve 2 families only. He reiterated his earlier testimony that the Contractor was informed of the changes in the contract and that the same did not affect the contract price. Further, that, the Nyamatongo borehole was part of the approved contract sum of TZ S 107,000,000/= Upon being re-examined by Mr. Matiku, D W I told this C ourt that, an interim certificate is only provisional and is subject to some changes, as it leaves a room for some adjustments. It is not a final certificate. He stated further that, the was a need to withhold the T Z S 25,000,000 as they were public funds, and, that, the interim certificate was only prepared to facilitate securing of funds from the Ministry. As regards the government circular (guidelines), D W I stated that all contractors are fully aware of it since they are registered by the Contractors Registration Board (C R B) and the Ministry of W ater and Irrigation. Since there Page 12 of 34 was no other witness to be called for the defence, the defence case came to a closure. Having summarized both the Plaintiffs and the Defence's case herein above, let me

now turn to the analysis of the same in the light of the issues raised in this case and determine whether they have been addressed affirmatively in the light of the oral testimonies and documentary evidence tendered in this case. As stated earlier, the suit revolves around the three issues, the first issue being: Whether the Plaintiff owes the Defendant the sum o f TZS 82,174,304.291-. I will commence my analysis by looking at this issue. Issue No. I: Whether the Plaintiff Owes the Defendant the Sum o f TZS 82,174,304.291- As it might be seen herein above, there is no dispute that the Plaintiff and the Defendant concluded an Agreement, (Contract No. LGA/094/WSDP/2016- 20I7/Q/02 (Exh.PI) on the 10th of July 2017, following a successful tendering. The consideration payable was for T Z S 107,197,000/-. From the evidence given in this case, there is no dispute that, following execution of the assignments, the Defendant approved and issued to the Plaintiff an Interim Certificate N o.I.) (E xh . 94) for payment of T Z S 107,440,000/- on 18th August 2 0 17. It is also clear from the testimony of P W I, that, out of the approved amount only T Z S 74 .104.170.50/ w ere paid to the Plaintiff on 28th December 2 0 17. W ith such information in mind, what then is the source of the claim for special damages amounting to TZ S 82,174,304.29/-? According to P W I, the source of that amount is

as itemized hereunder (i) the unpaid balance (of the principle amount) which is equal to TZ S 33.333.829.50/=: (ii) Unpaid costs for surveying two (2) boreholes (Nyamahona and Kisungamiie which is equal to TZS l4,000,000.00/=( @ 7,000,000/= for each Village). Page 13 of 34 (iii) Preliminary and General costs of TZS 16,000,000 (for shifting from Nyamahona Village to Kasungamile and Nyamatongo village TZS @TZS 8,000,000/= each). (iv ) Accrued Interest for late payment amounting to TZS 18,840,479.79/. From the evidence on record, this Court takes note that the Plaintiffs claim for T Z S 7,000,000/, which as per the item No.7 of Exh.P.7 constitute costs of carrying out hydrological survey at Kasungamile Village, has been admitted by D W I as amounts which should be paid to the Plaintiff. As such the part of the claim (half of it) under item No. (ii) above is justified. W hat is disputed is whole of item No. (i). part o f item No. (ii), whole of item No. (iii) and whole o f item N o. (iv). I will deal with each Item separately. IT E M No. (I): Claim In R esp e ct of T Z S 33,333,829.50 P W I testified that it arose from Exh.P4 (the Interim Certificate No. I). It is clear that Exh.P.4 was issued and approved by the Defendant on 18th August 2017, for payment of T Z S 107,440,000/-. However, the Plaintiff was only paid TZ S 7 4 .10 4 .170.50/, and this fact is not disputed. The claimed

balance, which is T Z S 33.333.829.50/= seem to be disputed by the Defendant on the ground that, out of it there is T Z S 25,000,000 which were earmarked for Nyamitongo Village borehole, and which borehole was found to be unproductive. For that reason, the amount was withheld by the Defendant. The question arising from this is: was it appropriate to withhold such amount or deduct it from what the Plaintiff is entitled to be paid? In his testimony, P W I told the Court that, the amount should not have been withheld, and, must be paid as per the contract. D W I argued that, the same was properly withheld because the borehole at Nyamitongo was unproductive and, on the basis of existing government policy (Exh .D 6 ) payments are to be made only to productive boreholes. D W I has anchored his argument on what is Page 14 of 34 provided on pages 6-7 of the Government Circular/Guideline (Mwongozo Na. 1/2016/17), (i.e., Exh.D 6). According to these pages, the following policy statement or guideline which applies to the borehole drilling contracts is laid out as follows: " 1.4.4 Maelekezo yafuatayo yatekelezwe wakati wa kutekeleza miradi mipya: (iii) Mikataba ya utafiti wa maji chini ya ardhi (geophysical survey) na uchimbaji visima (exploratory drilling) ufanyike katika Mkataba mmoja na kwamba atakayetafiti maji ndiye atakaye chimba kisima. Suala la malipo lizingatie upatikanaji w a m

aji yanayoweza kutum ika." P W I, however, argued in a clever manner, that, the said Exh.D6 has never been part of the Agreement governing the parties. The argument by P W I has certainly exercised my mind a bit and I asked myself as to whether the Plaintiff was not supposed to take into account government directives, policies or circulars in the course of executing his contracted assignments. This brought me even to another thought provoking question: what is the value of having such a policy? I will look at this as I go along in my discussion. It is indeed a well settled legal position, that, a government policy directive, guideline, circular or executive instruction, (whatever name it may be given), can only supplement a statute or cover areas to which the statute does not extend, but cannot run contrary to statutory provisions or whittle down their effect. (See Sta te O f M adh ya Pradesh A nd A n r v. G .S. D ali A nd Flour M ills [1991] A IR 772. Applied to this case, the above legal principle means that, although the Government Circular/Guideline (Mwongozo Na. 112016117), (Exh.D 6) was not part of Exh.P.I (as correctly argued by P W I in his testimony), that does not mean that the Defendant cannot rely on what it provides, if such reliance is in accordance with and supplements the law governing the underlying contractual relation of the parties. Page 15 of 34 As it may

be noted, the parties' contractual relationship in this case is primarily governed by the law of contract, (although one should not lose sight of the fact that the Procurement Act may also apply to it, since the contract arises from an award of a tender). Be that as it may, even though this is a construction contract, it is still governed by the same contractual legal principles since, as McEwan, J., stated in Smith v Mouton, 1977 (3) SA 9 @ 120 - I5C, "there is no special law different from the law relating generally to contracts and their interpretation that applies to building contracts and to [engineers'] certificates issued under them" The above discussion brings me now to the question I raised regarding whether it was appropriate to withhold the T Z S 25,000,000/- earmarked for Nyamatongo borehole which turned out to be unproductive. The policy/guideline cited herein above, provides that, payments for any drilling w ork should be considered only for productive boreholes and not otherwise. As evidenced from the testimony of D W I, the withholding was in line with that stated government policy. Does this policy run contrary to the law? In my view the answer is no. I will elaborate this here below. It is trite law that parties are to be bound by what they expressly consented to. Section 13 of the Law of Contract Act provides as follows, that: "Two or more persons are said to

consent when they agree on the same thing in the same sense". It is also a trite law that a contract should be read as it reads, as per its express terms. In other words, when a contract has been reduced to writing one must look only to that writing for ascertaining the terms of the agreement between the parties. (See the Supreme Court of India in Nabha Power Limited ("NPL") vs Punjab State Power Corporation Limited ("PSPCL") & another, Civil Appeal No. 179 of 2 0 17). As far as the suit at hand is concerned, the consent of the parties is conspicuously expressed by their signatures endorsed on Exh.P. I suggesting their willingness and readiness to be bound by the provisions of their Agreement. Page 16 of 34 Paragraph 2 of the "Agreement" set out several documents which form part and parcel of the Agreement. One of such is the so-called "General Conditions of Contract." Clauses 23 and sub-clause 23.1; 23.2.2 and 23.3 of the General Conditions o f Contract reads as follows: Clause 23: PAYM ENTS 23.1 O U T P U T Payment will be done with productive borehole, after complying to set standards (engineering satisfaction). (Emphasis added with an underline). 23.2.... 23.2.2 Interim Payments Payments will be made to the Contractor through interim certificates if the completed works are in compliance with the terms of the contract With each interim certificate, retention money of amounts

stated in the Contract Data will be withheld up to a maximum of 5% of the contract price. Such retention money will be released together with the final payment certificate. The amount due to the Contractor under any Interim certificate shall be paid by the Employer to the Contractor within 14 working days after approval of the Interim Certificate by the Engineer." (Emphasis added with an underline). 23.3 Final Payments The Final payment Certificate shall be effected within 28 working days after the date such document has been approved by the Employer, provided that all works, corrections, and repairs, if any, have been executed to the satisfaction of the Engineer." (Emphasis added with an underline). Looking at C la u se 2 3 .1, here above, and taking into account what section 13 of the Law o f Contract Act, [Cap.345 R.E 2002], provides, there is no doubt that the parties herein consented to be bound by such a Clause in the Contract. This brings me to the value of the Government Circular/Guideline (Mwongozo Page 17 of 34 Na. 1/2016/17), (Exh.D6). In my view, even though the Guideline was not part of Exh.P.I (as correctly argued by P W I in his testimony), yet, since it supplements and does run contrary to the agreed contractual clause above and the cited statutory provision relating to the consent of the parties or whittle down their effect (See State O f Madhya Pradesh & Anr

v. G.S. Dali And Flour Mills (surpa), I find that the policy guideline bear relevance to the parties. The above finding means, therefore, that, much as the Plaintiff ought to have taken into account Clause 2 3 .1of the Contract, above all, he should have as well be informed by the Government Circular/Guideline (Mwongozo Na. 1/2016/17), which in the similar vein requires payments to be made only to productive boreholes. This is what was agreed (consented to) in the Contract and this is what the policy guideline emphasizes. In this case, D W I has demonstrated vide Exh. D 2 (a) and Exh.D4 that, the Nyamatongo borehole was, according to a physical pumping test conducted only two months after its drilling, found to have insufficient discharge per hour, (between 300 to 400L/hr (if one reads Exh. D 2 (a) and Exh.D 4)) contrary to what the Plaintiff had stated in its Process Drilling Report, which was received into evidence as Exh.D5. The Plaintiff, vide Exh.D3 seems to have acknowledged this fact. According to Clause 12 of the General Conditions o f Contract, the contract had stipulated as follows, that: "Works not in compliance with the requirements of the contract will be rejected. On the instruction of the Engineer, the Contractor shall, at his own cost repair or correct or re-execute such rejected work to the full satisfaction of the Engineer." It is clear from the evidence of D

W I that, the Plaintiff was informed of the unproductiveness of the Nyamatongo and Nyamahona village boreholes as per Exh. D 3 and promised to look at the issue by doing a re-surveying. In principle, this was in accordance with the above cited Clause 12 of theGeneral Page 18 of 34 Conditions of Contract, since, as it may be observed in Exh. D 2 (b), it is clear that the Client (Employer) had rejected the w ork and proposed that the works be re­ executed. As indicated in Clause 12 above, if such re-execution was to be carried out, the same would have been carried out, "at the costs of the Contractor". Unfortunately, D W I testified that, to date, that has not been done. As noted in this case, the Plaintiff has complained against the withholding of the T Z S 25,000,000/ - by the Defendant as being unlawful, especially after there had been a release of an Interim Certificate of Payment. It is a cardinal rule, indeed, that in the absence of any of the factors to the contrary, the employer is bound to pay the sum certified. However, this is not sacrosanct principle, although at some point in time it seemed to be so. For instance, in the cases of S.A. Builders and Contractors v. Langeler, 1952 (3) S.A. 837 (N), at pp. 841 H-842H and Dawnays Ltd. v. F.G. Minter Ltd., (1971) 2 All E.R. 1389 (C .A .), it was considered that, once a certificate is raised in construction contracts, the

said certificate create a debt due and that, it was regarded as the equivalent of cash. In Dawnays Ltd. v. F.G. Minter Ltd., (supra) Lord DEN N IN G , M.R., stated as follows, at p. 1393 b: "An interim certificate is to be regarded virtually as cash, like a bill of exchange. It must be honoured. Payment must not be withheld on account of cross-claims, whether good or bad - except so far as the contract specifically provides. Otherwise, any main contractor could always get out of payment"(i.e. to a sub-contractor) "by making all sorts of unfounded cross-claims." However, much as the reasoning of his Lordship Denning, M.R has some jewels in it, in Gilbert Ash (Northern) Ltd v. Modern Engineering (Bristol) Ltd., (1973) 3 All E.R. 1975, the House of Lords overruled the Dawnays case (supra). In essence, the House of Lords stated the English common law position (which I find to be persuasive) that, a defendant who is sued for payment for either work done by a contractor or materials supplied, is entitled to raise as a defence that the work or materials were defective and, therefore, that he is not Page 19 of 34 liable for the whole or part of the payment claims that may be raised in a certificate. That is a right which cannot be taken away. In that case, Lord Diplock, summarized the general approach at p. 216c, when he stated as hereunder: "So when one is concerned with a building

contract one starts with the presumption that each party is to be entitled to all those remedies for its breach as would arise by operation of law, including the remedy of setting up breach of warranty in diminution or extinction of the price of material supplied or work executed under contract. To rebut that presumption one must be able to find in the contract clear unequivocal words in which the parties have expressed in their agreement that this remedy shall not be available in respect of breaches of that particular contract." In the same decision of the House of Lords, Viscount Dilhorne had the following to say, at p. 220h: "A great deal has been said in Dawnays case and the cases which have followed it, as well as in this case, as to the importance of a 'cash flow' in the building industry. I cannot think that the building industry is unique in this respect It is, of course, true that the contract makes provision for payments as the work proceeds, but, it is to be observed, a fact to which I feel insufficient attention has been paid, that the contractor is only entitled to be paid for work properly executed. He is not entitled to be paid on interim certificates for work which is defective. The Architect should only value work executed properly, that is to say, to his reasonable satisfaction (clause I); and no interim certificate is of itself conclusive evidence that the

work was in accordance with the contract (clause 30 (8)." (Emphasis added). Taking the cue from the above, I am fully convinced that the Defendant was and still is, entitled to withhold the payment of T Z S 25,000,00/- from the interim certificate given that, the Nyamatongo borehole turned out to be unproductive. Payment of such sums to the Plaintiff, would not only be contrary to Clause 23.1 o f the General Contract Conditions, but would also go contrary the established procurement principle, in particular the principle of Value for Money Page 20 of 34 as expressly stated in section 47 (c) of the Public Procurement Act, [Cap.410 R.E.20I9]. Basically the section provides that: " Procuring entities shall, in the execution of their duties, strive to achieve the highest standards of equity, taking into account- (a) (b) ....; and (c) the need to obtain th e b est va lu e fo r m o ney in te rm s o f p ric e , q u a lity and d e liv e ry having reg ard to set sp e cificatio n s and c rite ria . It follows, therefore, that, the claim regarding payment of T Z S 25,000,000/ for the works executed in Nyamatongo Village will fail and the same should be deducted from the Plaintiffs Claim of balance of T Z S 33.333. 829.50. This is due to the reason that, as a contractor, the Plaintiff is only entitled to be paid for works properly executed and is not entitled to be paid on interim

certificates for defective w ork. That will even go contrary to the principle of value for money taking into account that the monies paid for the works are public funds. IT EM No. (II): Claims in respect o f Unpaid costs o f surveying two (2) boreholes (Nyamahona and Kisungamile which is equal to TZS 14,000,000.001- (@ 7,000,000/= for each Village). As it may be observed from the evidence tendered in this Court, the Plaintiffs claim of T Z S 7,000,000/ as costs for carrying out hydrological surveying at Kasungamile Village. This claim has not been disputed by D W I. The dispute is with regards to costs carrying out hydrological surveying at Nyamahona Village. D W I holds that the Nyamahona Village was found to be completely dry and, that, since that bore hole (and that of Nyamatongo Village) were unproductive, the Plaintiff was directed to relocate activities to Kasungamile Village. The letter was clear that the costs for the Nyamahona Village were now to be imputed on Page 21 of 34 Kasungamile drilling site. The letter was tendered in Court and admitted as Exh. D2 (a). In my humble view, the same principles discussed earlier concerning the claims in respect of works executed in Nyamatongo boreholes which were found to be unproductive, will as well apply to Nyamahona. In particular, since as per Exh. D2 (a) and Exh. D2 (b), the Nyamahona borehole, was unproductive, which fact

was acknowledged by the Plaintiff as per Exh. D3, according to Clause 23.1 of the General C o ntract Conditions, as discussed earlier herein above, as well as the cases I have referred to, the Plaintiff is not entitled to the payments of T Z S 7,000,000/ as claimed in Exh.P.7. As I earlier stated, and in line with Clause 23 of the G eneral C o n tract Conditions, the Plaintiff can only be entitled to payment for works properly executed and is not entitled to be paid on interim certificates for defective works. An unproductive borehole is equally defective. Besides, it has been clearly established by virtue of Exh. D2 (a) that, the Contractor (Plaintiff) was instructed to relocate and carry out the hydrological drilling works in Kasungamile Village in lieu of Nyamahona Village where the borehole drilled were found to be unproductive. The Plaintiff, therefore, cannot claim for costs of doing so at Kasungamile and Nyamahona at the same time. In actual sense, even the Kasungamile costs ought to be borne by the Plaintiff if one is to follow what Clause 12 of the General Conditions o f Contract stipulates. Be that as it may, I find that Exh. D 2 (a) was clear and in line with the provisions of the Contract that, the costs of implementing works in Nyamahona Village were now being replaced by the works executed in Kasungamile Village. As such, there can be no payment for double claims.

The amount of T Z S 7,000,000/- as costs for Nyamahona survey and drilling claimed as per Exh.P.7 should also fail. IT EM No. (Ill): Preliminary and General costs of TZ S 16,000,000 (for shifting from Nyamahona Village to Kasungamile Page 22 of 34 and Nyamatongo village TZ S @ TZS 8,000,000/= each). According to P W I, the Defendant varied the Agreement at some point necessitating the relocation of site activities from one place to another. Exh.P.6 is relevant here in that respect. P W I even stated the reasons for such site relocation as being that, some of the designated sites during the survey activities were found to lack enough yield and, hence, not recommended for drilling. As it may be observed from P W l's testimony in chief, the Defendant’s instruction to shift sites from Nyamililo, Nyamahona, and Nyamatongo Villages to Kasungamile village, caused extra-costs for preliminaries and general activities to implement the same, which costs were not honoured by the Defendant although the same were communicated to the Defendant. In Exh.P.7, it is clearly stated that the costs for relocating from Nyamahona to Kasungamile for geophysical survey, which includes mobilization costs was TZ S 1,600,000 per each village. It is stated, therefore, that, the costs for mobilization at Kasungamile were T Z S 1,600,000/. However, Exh.P.8 (demand letter) indicates that, the costs for the

preliminaries/General works from Nyamahona to Kasungamile is T Z S 8,000,000/ as well as preliminaries/General works at Nyamatongo to be 8,000,000/-.This brings a total of T Z S 16,000,000/=. W ith due respect, since Exh.P.7 had categorically established the costs of relocation and mobilization as being T Z S 1,600,000 for each village, the basis of the claim amounting to T Z S 16.000.000/ is not established at all. W hile I agree that variations which led to site re-location will add costs on the side of the Plaintiff, I do not, however, find it correct to claim T Z S 16,000,000 as amount arising from such. The reason is clear. Even if one is to take the view stated by P W I that the Defendant's instruction to shift affected four village sites (i.e., from Nyamililo, Nyamahona, and Nyamatongo Villages to Kasungamile village), Exh.P.7 has established the costs per one village to be T Z S Page 23 of 34 1,600,000/=. This means that, in respect of 4 villages, the amount would have been ( 1,600,000 X 4) = T Z S 6,400,000 (as opposed to T Z S 16,000,000/=). However, Exh.P3 (Interim Certificate) indicates that, the amount requested in respect of "preliminaries and gen eraf' activities for five (5) villages (Mulaga, Nyamatongo, Nyamililo, Nyamahona and Imalamawazo) was T Z S 8.000.000 only (meaning that, costs for each village was TZS 1,600,000/ since (1,600,000x5= 8,000,000/=). If

such amount was not settled, still it cannot bring the total of T Z S 16.000.000 but rather a total of T Z S 8,000,000/-. For such reasons, leaving aside the fact that Exh.P.6 indicates that the instructions to shift were in respect of Nyamahona Village and Kasungamile Village only, it is clear to me, and I find and hold so, that, the costs which the Plaintiff should have claimed and is entitled to be reimbursed as mobilization or demobilization costs for all five villages where the project was implemented amounts to (T Z S 1,600,000 X 5) = T Z S .8 , 000,000/= only. Consequently, as for the claims under ITEM No. Ill , the total will be T Z S 8,000,000 /- and not 16,000,000/-. ITEM N o.IV: Accrued Interest for late payment amounting to TZS 18,840,479.79/. Item No.IV above is the final item which the Plaintiff relied upon to build up the claim for T Z S 82,174,304.29/-. According to the testimony of P W I, the amount claimed as interest results from the late payments of the balance of T Z S 33,333,829.59/= and T Z S 7,000,000 which w ere amount spent as costs of surveying for the boreholes drilling activities at Nyamahona. PW I stated that up to January (presumably 2020?), the total accrued interest was TZS 18,840,479.79/. However, as stated in this Judgement, the claimed balance of T Z S 33,333,829.59/= had included the T Z S 25,000,000/- which were funds withheld from

Nyamatongo Village. As I held earlier, taking into account the contract signed by the parties, the law of contract and supplementary government Page 24 of 34 guidelines/policy in respect of boreholes drilling activities and the Public Procurement Act, the Plaintiff was not entitled to be paid the T Z S 25,000,000/-. As I said earlier, it should be deducted out of such balance. If that is worked out, then, the balance will be T Z S 8,333,829.50 / which should be what will remain, and, from that, interest for late payment may be made. Furthermore, the T Z S 7,000,000/ which were labelled as costs of surveying for the boreholes drilling activities at Nyamahona Village, were shifted to Kasungamile village. As I said, this amount can only be claimed not from the Nyamahona village cost-based standpoint but from the Kasungamile point of view. Interest thereto, should also be claimed from what was spent at Kasungamile. As stated in the discussion in respect of ITEM N O .Ill above, such costs were included under that item. On the other hand, issues regarding late payments were not left out in the Agreement signed by the parties. In particular, C lause 23.4 of the General Conditions of C o n tract provided as follows: If the Employer fails to make payments within the time stated, the Employer shall pay to the Contractor interest stated in the Contract data. Besides, Clause 23.2.2 of the

of the G eneral Conditions of C o n tract provided that, 23.2.2 Interim Payments Payments will be made to the Contractor through interim certificates if the completed works are in compliance with the terms of the contract. ...The amount due to the Contractor under any Interim certificate shall be paid by the Employer to the Contractor within 14 working days after approval o f the Interim Certificate by the Engineer." (Em phasis added with an underline). Page 25 of 34 As it may be gathered herein above, it is clear that the contract had stipulated the payment time to be 14 days after approval of an interim certificate. As stated by D W I, it should be borne in mind that the interim certificate was not a "final certificate". The Agreement did recognize that fact, as C la u se 23.3 o f G e n e ra l C o n d itio n s o f C o n tra c stipulates for that. However, there has been no evidence to the effect that a Final Certificate has ever been issued to date. Be that as it may, as P W I, testified the In te rim C e rtific a te (E x h .P .4 ) which was submitted to the Defendant, was submitted on 18th August 2017, and the Defendant approved a payment of T Z S 107,440,000/-. However, it w as no t u n til 28th December 2 0 17, the Plaintiff received a part-payment in respect of the earlier approved payments for Interim Certificate N o.I, amounting to T Z S 74,104,170.50/. This means that

there was 4 months delay to pay that amount and for sure there was an accrued interest which needs to be calculated. According to the C o n tra c t D ata, the prescribe interest rate for any unpaid amount was the prevailing commercial bank interest rate per month as published by the Bank of Tanzania (B O T) on th e d ate o f C o n tra ctin g . According to E x h .P .8 , the Plaintiff capped the interest rate at 2 1%. I will assume that such was the rate and proceed. Now, the question that arises is: How much ought to have been charged interest rate? The general legal consensus is that a contractor should be able to recover interest on late payments. Essentially, such interest can be charged on an overdue payment from the day after the last day that it should have been paid. The interest charged, however, should not be punitive. Rather, it should have the goal of compensating the party who is deprived of the benefits of a prompt payment. See Landfast (Anglia) Ltd. v Cam eron Taylor One Ltd. [2008] E W H C 343 (T C C ) (26 February 2008). As regards the current suit, in my view, the amount from which interest accrued included the following: Page 26 of 34 (a) The T Z S 7 4 ,10 4 ,170.50/ of which, the interest should be calculated for the delayed period of 4 months at a rate of 21% per month, (i.e, from 19th August 2017 to 28th December 2017. The amount payable as interest

would be TZS 1,296,770.48 x4= T Z S 5.187.087.92/- (b) T Z S 7.000.000 (which were costs for carrying out hydrological surveying at Kasungamile. The calculations should run from 19th August 2017 to 26th March 2019 when this suit was filed. The amount payable as interest would be TZ S 122,500 x l9 (months) =T Z S 2.327.500/- (c) T Z S 8.333.829.50 (which is the difference between the claimed balance of T Z S 33,333,829.59/= minus the TZS 25,000,000/- which were withheld from the Nyamatongo unproductive borehole). The accrued interest from this should as well be calculated from 19th August 2 0 17 to 26th March 2 0 19 when the suit was filed. As such the amount payable as interest would be T Z S 145,842 x I9 (months) =T Z S 2.770. 998/- (d) T Z S 8.000.000 (which w ere costs of demobilization and mobilization as discussed under ITEM No. Ill above). Similarly, accrued interest from this should as well be calculated from 19thAugust 2 0 17 to 26th March 2 0 19 when the suit was filed. The amount payable as interest would be T Z S 140,000 x l 9 (months) =T Z S 2.660.000/- In view of the above, the total (cumulative) interests from (a) + (b) + (c) + (d) above, which the Plaintiff is entitled to be paid at a rate of 21% per months is Page 27 of 34 T Z S 12.945.585.92/- (say Tanzanian Shillings Tw elve Million, Nine Forty Five Thousand, Five Hundred Eighty Five, Ninety Tw o C en ts

Only.) On the other hand, the correct amount, which the Plaintiff should be paid as remaining balance is as follows: (a)Tsh . T Z S 7.000.000 (which were the undisputed costs for carrying out hydrological surveying at Kasungamile. (b) T Z S 8 .3 33 .8 2 9 .5 0 (which is the difference between the claimed balance of T Z S 33,333,829.59/= minus the TZS 25,000,000/- which were withheld from the Nyamatongo unproductive borehole). (c) T Z S 8.000.000 (which were costs of demobilization and mobilization as discussed under ITEM No. Ill herein above). The total balance claimed, therefore, is (a) + (b) + (c) above which is equal to T Z S 23,333,829.5/= (say Tw enty T h ree M ilion,Three Hundred T h irty Th ree, Eight Tw enty Nine and Five Cents Only.) The overall balance, if one is to combine this with the interest payable is a total of T Z S 36, 2 7 9 ,4 15.42/- (Thirty Six Million,Two Seventy Nine Thousand,Four Hundred Fifteen and Fourty Two Cents only). In the upshot, the first issue regarding: Whether the Plaintiff Owes the Defendant the Sum of TZS 82,174,304.291-is only partially answered in the affirmative in the sense that, the correct amount, which the Plaintiff owes the Defendant, is T Z S 36, 279,415.42/-(T h irty Six Million,Two Seventy Nine Thousand, Four Hundred Fifteen and Fourty Tw o C ents only) (including accrued interests from 19th August 2 0 17 to 26th March 2 0 19

when the suit was filed). Having disposed the first issue as shown herein above, let me now turn to the second issue. SECO N D ISSUE: Whether there was a breach o f the Contract between the Parties. Page 28 of 34 In simple terms a breach of contract occurs when a promise or agreement is broken by any of the parties to that Agreement. In the case at hand, the Plaintiff alleges that the on 10th July 2017 the Defendant awarded the Plaintiff a tender LGA/094/WSP/W/2016-20 i 7/Q/02, (Exh.P.I) to execute works of drilling boreholes, the completion of which was estimated to be on 23rdSeptember 2 0 17. The Plaintiff alleges that the works were executed, but the defendant refused to pay the entire agreed contract price. In the present suit, the validity of the contract (Exh .P .I) was not at issue. W hat has been at issue is that the Plaintiff was not paid timely. From that, the issue becomes: whether the delayed payments constituted a breach o f contract.. As a general rule, the time of payment for services rendered or goods supplied is not generally of the essence of a commercial contract unless the parties have agreed (either expressly or by necessary implication) that it should be. That being the case, the requirement to pay on time (i.e., in accordance with the payment terms prescribed by the contract) is not a condition of the contract, breach of which would permit the innocent

party to elect to accept the breach and to bring the contract to an end, but is widely classified as an “ innominate term ” . See for instance the English cases of Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 2 All ER 216 and Valilas v Januzaj [2014] EWCA Civ 436. Although it is dependent on each facts of a case for the court to rule out whether delayed payments constitutes breach of a condition or amounts to breach of an "innominate term", there is no doubt that delayed payments may constitute a breach of contract if such delay is over a prolonged period, especially where such delay is way beyond what the contract has stipulated as payment period. In the English case of of Spar Shipping AS v Grand China Logistics Holding (Group) Co. Ltd [2017] EW C A C iv 982, for instance, the Court of Appeal of England found that a shipowner was entitled to terminate for Page 29 of 34 repudiatory breach where the hirer was in persistent breach of an obligation for the punctual payment of hire. Briefly stated, the facts of that case were that, sometime in March 2010, the Defendant's subsidiary company (G CS) agreed to hire three vessels from the claimant. The charterparties were guaranteed by the defendant. The charterparties required payment of hire 15 days in advance, and gave the claimant an express right to withdraw the vessels from service "failing the punctual and

regular payment of the hire". From April 2011 G CS was in arrears of payment of hire. That continued throughout the summer of 2 0 11, with a chronology of missed and delayed payments. In September 2011, the claimant withdrew the vessels and terminated the charterparties. The Court ruled in favor of the shipowner. As regards the current suit, it is trite in law that he who alleges must prove. Consequently, in a suit like the one at hand, the burden of proving each and every allegation in the plaint, including allegations of breach of contract, losses suffered, damages and any reliefs prayed for, rests on the plaintiff. Section 110 ( I) and (2) of the Evidence Act, 1967, Cap 6 R.E. 2002 is alive to that. The section provides as hereunder, that: "I 10. ( I) whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that, those facts exist. (2) When a person is bound to prove the existence of any fact, it is said that, the burden of proof lies on that, person. The above cardinal principle was emphasized in the case of W olfango O ourado v T ito D aC osta, Z N Z Civil A ppeal No. 102 (C A) (unreported), where the court insisted that: "whoever alleges a fact, unless it is unequivocally admitted by the adversary has to prove it, albeit on the balance of probability” As stated earlier herein, PW I

testified that on 18th August 2017 the Plaintiff submitted an Interim Certificate No. I (Exh.P.4) to the Defendant seeking to be paid for the works that were completed. PW I stated that Exh.P I Page 30 of 34 was no fully honoured and more so, the payments were delayed. I have laboured earlier here above to show that there was indeed a delayed payment of certain amount as ascertained herein above and which the Plaintiff was entitled to be paid. Essentially, according to the Agreement governing the parties' relations, which agreement was tendered and admitted as E x h .P I, Clause 23.2.2 o f the General Conditions o f Contract provided that payments should be made within 14 working days after approval of the interim certificate. Moreover, Clause 23.3 of the General Conditions o f Contract stipulated for a period of 28 days for effecting a final payment certificate. However, as I said earlier, such final certificate was never issued. C la u se 28.2 provides that, where the Employer fails to effect payments to the contractor within 60 days from the date when the Engineer's certificate was issued, the contract will terminate. From the look of things, prolonged delayed payment in this contract constituted a breach of condition entitling the Plaintiff to terminate the contract. Since the Plaintiff established that the was a delayed payment, even if not to the extent of the amount

claimed, the Plaintiff has proved to the required balance of probability that the Defendant was in breach of the Agreement, especially, C la u se s 2 3 .2 .2 , and C la u se 28.2 had to come into effect. This conclusion, therefore, establishes the second issue affirmatively, that, there was a breach of contract between the parties. Let us now look at the final issue. T H IR D IS S U E : What reliefs are the Parties entitled to. Moving to the 3rd and last issue of what reliefs are parties entitled to, it is my finding that the Plaintiff claims regarding breach of contract by the Defendant due to the latter's non-payments as well as delayed payments for the works executed under the agreement, has been proved to the balance of probability and the contract was breached. However, the question that needs to be asked is whether the Plaintiff suffered loss as a result of the breach and if so what should follow. Page 31 of 34 Essentially, an award of damages for breach of contract has a different objective: compensation for financial loss suffered by a breach of contract, not compensation for injury to reputation. In our Jurisdiction, section 73 ( I) of the Law of Contract Act, Cap.345 [R.E 2002] provides as follows, that: "(l).W h en a contract has been broken, the party who suffers by such breach, is entitled to receive, from the party who has broken the contract, compensation for any

loss or damage caused to him thereby, which naturally arise in the usual course of things from such breach or which the parties knew, when they made the contract to be likely to result from the breach." The above cited provision requires that a party who suffer as a result of a breach of contract to be compensated for the loss suffered. As regards the case at hand, the Plaintiff has prayed to be warded T Z S 50,000,000 as general damages and T Z S 8 2 ,174,304.29 as specific damages. As discussed earlier in this judgement, the Plaintiffs claim for T Z S 82,174,304.29 as specific damages could not be strictly proved to the required standards. The law is settled that, special damages should, not only be pleaded, but the claimant should also strictly prove them. The case of Zuberi Augustino v A nicet M ugabe [1992] TLR 137 is a case in point. However, upon a fair evaluation of the claims, the Court settles for T Z S T Z S 36, 279,415.42/- as indicated earlier herein above. As regards the claim for general damages, the Court of Appeal of Tanzania, in the case of Maweni Lim estone Lim ited v Dam atico General Supply, Civil C ase No.28 of 2 0 18, (unreported), held that award of general damages to the injured party is at the discretion of the trial Court, which discretion needs to be exercised judiciously and in accordance with the evidence in the record. The Court was of the view

that, the award must be seen to be fair in the monetary terms to the suffered party and reasons must be assigned. Guided by the above principle, I am of a settled view that the contract having been breached, the Plaintiff suffered damage. In the Plaintiffs pleadings, the Page 32 of 34 Plaintiff has alleged to have suffered economic loss, inconvenience, and other general damages as he had a loan which he was servicing. P W I tendered in C ourt a Credit Facility Agreement, which was received in Court as Exh. P 2. He submitted that, although the loan was advanced to the Plaintiff in 2015, he had used the funds in 2017 as well. According to clause 3 of Exh. P 2, the purpose of the loan was for partly settling Barclay's Bank Loan and supporting working capital requirements of the Plaintiff. Besides, it was also for the purposes of assisting the Plaintiff in drilling projects for its customers. Exh. P 2 had a life span of 3 years and was therefore due to expire on March 2 0 18. In my view, although the above evidence and testimony by PW I does indicate that the Plaintiff suffered loss and was inconvenienced, the amount of T Z S 50,000,000/ claimed by the Plaintiff, is rather excessive by all standards. This is due to the fact that, the Defendant paid the Plaintiff about 75% of the entire contract sum. The belated payments, nevertheless, attracted interest and the such interests has

been awarded where I discussed the award for special damages claimed by the Plaintiff. In view of that, this C ourt finds that it since 75% of the contract sum was paid on 28th December 2 0 17, it will not be fair to award TZ S 50,000,000 to the Plaintiff as general damages. Instead, the Court settles for T Z S 7,000,000/ as general damages. In the final analysis, the Court makes the following orders: 1. Th at, subject to deduction of any unpaid statutory deductions (tax/levies), the Defendant pay the Plaintiff T Z S T Z S 36, 279,415.42/- as special damages arising from the non-payment and delayed payments and interests therein, of the part of the agreed contract sum.

2. That, the Defendant pay the Plaintiff TZ S 7,000,000/ as general damages for breach of Contract between the parties. Page 33 of 34 3. That, the Defendant pay the Plaintiff, interest at a rate of 7% on the decretal amount from the date of this judgement to the date of full payment.

4. That, the Defendant pay costs for the suit. It is so ordered.

D E O JO H N N A N G E L A JU D G E , High C o u rt of Tanzania (Com m ercial Division) 10/ 07 12020 Ruling delivered on this 10th day o f July 2020, in the virtual presence of Mr.Maligia, Advocate for the Plaintiff also holding the brief of Mr. Matiku, Advocate for the Defendant. fl

D E O JO H N N A N G E L A JU D G E , High C o u rt of Tanzania (Com m ercial Division) 10/ 07 /2020 Page 34 of 34