meis industries company limited vs exim bank tanzania ltd 2017 tzca 222 10 august 2017

IN THE COURT OF APPEAL OF TANZANIA AT DAR-ES-SALAAM (CORAM: MUSSA, 3. A., MUGASHA, 3. A. And MWAMBEGELE, 3. A.) CIVIL APPLICATION NO. 70 OF 2014 MEIS INDUSTRIES COMPANY LIMITED..................................... APPLICANT VERSUS EXIM BANK (TANZANIA) LIMITED.........................................RESPONDENT (Appeal from the Ruling and Orders of the High Court of Tanzania (Commercial Division), at Dar es Salaam) (Makaramba, 3.) dated the 11th day of April, 2014 in Commercial Case No. 11 of 2014 RULING OF THE COURT 4th &18th day of August, 2017 MUGASHA, J.A.: Before this Court there is an application for stay of execution filed under Rule 11(2) (b) (c) and (d) of the Court of Appeal Rules, 2009 (the Rules). According to the Notice of Motion, the applicant is seeking to stay execution of the Ruling and Order of Makaramba, J dated 11th April, 2014 in Commercial Case No. 11 of 2008. In the said Ruling, Makaramba, J allowed the decree holder to proceed with the execution of the decree in Commercial case No 11 of 2008, since there was no order to stay its execution against the judgment debtors. In the Notice of Motion, it is the applicant's contention that, in the event the application is not granted, the following is bound to ensue namely: 1. The Cement project in Lindi of the applicant financed by the Libya Government will be frustrated to the embarrassment of the Government of the United Republic of Tanzania the Guarantor; 2. The fraudulent judgment and decree in Commercial Case No. 11/2008 will have been blessed; and 3. The intended appeal will be academic. The application is accompanied by the affidavit of merey a l l y s a le h the Managing Director of the applicant. The application is opposed by the respondent through the affidavit in reply of praveen m ehra the principal officer of the respondent. At the hearing, the applicant was represented by Mr. Josefu Mwakajinga, learned counsel whereas the respondent had the services of Mr. Gabriel Mnyele learned counsel. The application was initially confronted with the preliminary point of objection to the effect that, the applicant had not filed written submissions as required by Rule 106(1) of the Rules. However, it was withdrawn by Mr. Gabriel Mnyele learned counsel, and both counsel prayed for a waiver of the condition of filing written submissions. With leave of the Court, the counsel were allowed to argue the application orally. Arguing the application Mr. Mwakajinga learned counsel for the applicant adopted the entire contents of the notice of motion and the applicant's affidavit which lacked indication as to whether the applicant will suffer substantial loss and if she is willing to furnish security for the due performance of the decree. When we asked Mr. Mwakajinga to clarify on the matter, apart from repeating the grounds stated in the notice of motion he submitted that, the applicant has not furnished security nor undertakes to do so because it is not a condition precedent in every application for stay of execution. On the other hand, Mr. Mnyele adopted the affidavit in reply opposing the application. He argued that, the applicant has not satisfied the conditions stated under rule 11(2) (d) of the Rules having not established the likelihood to suffer loss and furnishing security. Mr. Mnyele urged the Court to dismiss the application with costs. The mandate of the Court to grant stay of execution of a decree or order upon good cause being shown, is articulated under Rule 11(2) of the Rules which provides: 11 (1)... (notrelevant) 11 (2} Subject to the provisions o f sub-rule 1 the institution o f an appeal shall not operate to suspend any sentence or to stay execution but may- (a) ... (Notrelevant) (b) In any civil proceedings, where a notice o f appeal has been lodged in accordance with rule 83, an appeal shall not operate as a stay o f execution o f the decree or order appealed from except so far as the High Court or tribunal may order, nor shall execution o f a decree be stayed by reason only o f an appeal having been preferred from the decree or order; but the Court, may upon good cause shown, order stay o f execution o f such decree or order. (c) ... (Not relevant) (d) No order for stay o f execution shall be made under this rule unless the Court is satisfied:- (i) that substantial loss may result to the party applying for stay o f execution unless the order is made; (ii) that the application has been made without unreasonable delay; and • (Hi) That security has been given by the applicant for the due performance o f such a decree or order as may ultimately be binding upon him." In the case of m takuja k o n d o a n d o t h e r s v s w e n d o m a lik i, Civil Application No. 74 of 2013 (unreported) we said: " . . . The conditions which applicants have to satisfy so as to be granted the order for stay o f the execution are laid out in Rule 11(2) (b) (c) and (d). A ll conditions must be satisfied. The applicant must show the following: a notice o f appeal was given; they have sufficient cause for praying for the order for stay, the application was filed within time; they will suffer substantial loss if the order is not granted; and they have furnished security." (See also THEROD FREDRIC VS 5 ABDUSAMUDU SALIM, Civil Application No. 7 of 2012, (unreported). [Emphasis supplied.] Showing substantial loss to be suffered is key element under Rule 11 of the Rules. Therefore, unless details and particulars of loss are specified, there is no basis upon which the Court could satisfy itself that loss would be incurred. (See mechmar c o r p o r a t io n (MALAYSIA) vs BENHARD VIP ENGINEERING AND MARKETTING AND ANOTHER, Civil Application No. 184 of 2008 (unreported) and TANZANIA COTTON MARKETTING BOARD VS COGECOT COTTON Co SA [1997] T.L.R 64.) The modality of furnishing security was addressed by the Court in MANTRAC TANZANIA LTD VS RAYMOND COSTA, Civil Application No. 11 of 2010 (unreported). This Court said: "That, the other condition is that the applicant for stay order must give security for due performance o f the decree against him. To meet this condition, the law does not strictly demand the said security must be given prior to the grant o f stay order. To us, a firm undertaking by the applicant to provide security might prove sufficient to move the Court, all things being equal, to grant a stay 6 order, provided the Court sets a reasonable time limit within which the applicant should give the same." Where security is not furnished and in the absence of any such firm undertaking, settled law requires the Court not to grant stay of execution sought. (See jo ra m u b is w a lo v s ham is r ic h a r d , Civil Application No. 11 of 2013 (unreported). Thus, failure to undertake to furnish security is a fatal omission. (See selem ani z a h o r o an d o t h e r s VS' f a i s a l ahmed a b d u l (Legal Representative of the deceased) ahmed s. a b d u l, Civil Application No. 1 of 2008 (both un reported). We shall be guided by the stated principles in determining this application to determine the rival contentions which hinge on whether or not, the applicant has substantiated loss to be suffered and if she was not obliged to furnish security for the due performance of the decree. In the motion at hand, it is not in dispute that, it was brought without delay having been filed on 15th April, 2015, a day after the notice of appeal was filed. As to whether the applicant has complied with the remaining conditions, in her affidavit, the applicant has merely narrated a sequence of events which preceded the impugned Ruling. Moreover, at the hearing, Mr. Mwakajinga echoed what is stated in the Notice of Motion which is to the effect that, the refusal of the application will frustrate the financier and embarrass the guarantor and bless the fraudulent judgment and decree of the case which preceded the impugned Ruling and render the intended appeal academic. Apart from the said lamentations, the applicant did not go further to clarify the magnitude of loss or how the applicant will suffer substantial loss. We are thus satisfied that, having failed to establish the substantial loss to be suffered, the applicant has not met the crucial condition and key element under Rule 11(2) (d) (i) of the Rules. With regard to the condition of furnishing security for the due performance of the decree, there was no such indication by the applicant be it in the notice of motion, the applicant's affidavit or at the hearing where her counsel viewed the condition as unnecessary requirement. With respect, we do not agree with such proposition because the furnishing of security for the performance of the decree is a creature of Rule 11(2) (d) (iii) of the Rules, categorising it as one of key elements and a condition precedent to be complied with before the stay of execution is granted. In view of the aforesaid, this application is not merited on account of applicant's failure to establish substantial loss to be suffered if stay is refused and furnishing security for the due performance of the decree. We accordingly dismiss it with costs. It is so ordered. DATED at DAR ES SALAAM this day 10th of August, 2017. K.M. MUSSA JUSTICE OF APPEAL S.E.A. MUGASHA JUSTICE OF APPEAL J.C.M. MWAMBEGELE JUSTICE OF APPEAL I certify that this is a true copy of the original 9