MEK ONE GENERAL TRADERS CO

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

AT PAR ES SALAAM COMMERCIAL CASE NO. 155 OF 2023

BETWEEN MEK ONE GENERAL TRADERS CO. LIMITED....................... PLAINTIFF

VERSUS M/S YAPI MERKEZIINSAATVE SANAYI..........................DEFENDANT

DEFAULT JUDGMENT Date of Last order: 31st May, 2024 Date of Judgment: 14th June, 2024 GONZI, J. The Plaintiff sued the defendant for breach of Supply Agreement, on credit basis, of an array of goods and products through purchase orders entered between the plaintiff and the defendant since October 2022. In the plaint the plaintiff is praying for Judgment and Decree for orders that: - a. Declaration that the defendant has breached the supply agreement entered in 0ctober2022. 1 b. An order against the defendant for payment of the outstanding amount of Tanzania shillings one hundred ninety-three million two hundred ninety-seven thousand, six hundred and ten shillings sixty-eight cents (TZS. 193,297,610.68). c. An order against the defendant for payment of commercial interest at the rate of 25% per annum on the outstanding amount from the date of filing this suit to the date of Judgment. d. Interest on the decretal sum, at the Court rate of 12% from the date of judgment to the date of full satisfaction. e. General damages for breach of contract to be assessed by this honorable Court. f. Any other relief as the Court may find just, convenient, and equitable to grant. The brief facts of this suit as collected from the plaint are that in October 2022 the plaintiff and the defendant entered into an agreement for supply of an array of products through purchase orders to various 2 camps /

locations from Ilala Dar es Salaam warehouse and kitchen, to Soga Warehouse and kitchen. In terms of the contractual transaction, the defendant would make payments for the supplies upon issuance of invoices by the Plaintiff. From October 2022, when parties concluded the agreement, to June 2023, in compliance with the terms contained therein, the defendant placed orders for supply of several goods and the plaintiff supplied the goods to the defendant on credit. The goods were valued at TZS. 350,826,981.95. The plaintiff relied on various copies of Tax Invoices, Purchase Orders, Delivery Note and E-mail correspondences from October 2022 to June 2023 annexed to the plaint and marked as MEK-2. The plaintiff on its part fulfilled its contractual obligation whereby it delivered to the defendant various products through various purchase orders. The Defendant however did not fully pay the Plaintiff for the supplied products despite Defendant's receipt of invoices sent by the Plaintiff. From October 2022 to June 2023 the plaintiff supplied goods to the defendant on credit basis valued at TZS. 350,826,981.95. The defendant has paid only TZS. 157,529.371.27. Hence, Tanzanian shillings One Hundred Ninety-Three Million Two Hundred Ninety-Seven Thousand Six Hundred Ten shillings and Sixty Eighty Cents (TZS. 193,297,610.68) 3 remains unpaid and outstanding. Copies of purchase & sales

statement of accounts and defendant's unpaid invoice statement were attached as annexure MEK-3 to the plaint. Following the failure /refusal of the defendant to pay for the supplied goods, the plaintiff sent several reminders through various emails correspondences notifying the defendant to clear the outstanding amount but in vain. On 13th Jully 2023, the plaintiff issued demand notice to the defendant notifying it of the outstanding invoices and demanding the same to be cleared within seven (7) days. The said demand went un-responded. Copies of the email correspondences and demand notices dated 13th July 2023 were annexed collectively as MEK-4 to the plaint. The plaintiffs' efforts to make the defendant pay the outstanding amounts proved futile causing it to suffer losses and damages including loss of business due to failure by the defendant to repay timely the outstanding amounts of TZS. 193,297,610.68 when invoiced, and loss of profits as a result of the defendant's failure to pay the outstanding amount in time. Following the defendant's failure, refusal and neglect to pay the outstanding amount timely, the board of directors of the plaintiff company resolved to file this suit to recover the outstanding amounts. Copy of the Board resolution was annexed as annexure MEK-5 to the plaint. 4 The defendant failed to file Written Statement of Defence on time despite being duly

served by the Plaintiff with the plaint and Summons to file WSD on 20/12/2023.The Plaintiff therefore applied for and was granted leave to make an application for default Judgment under Rule 22 (1) of Commercial Court Rules as amended by G.N. 107 of 2019. The Plaintiff duly filed in Court Form No.l supported by an Affidavit of Proof, hence, this Default Judgment. The Affidavit of proof containing 5 Exhibits labelled as MEK-1 to MEK-5, essentially repeated and substantiated by evidence, the facts contained in the Plaint. The affidavit of proof was sworn by one, Farai Chirimubwe who is an Employee (Accountant) of the plaintiff Company. Exhibit MEK-1 is the summons to the Defendant to file Written Statement of Defence which was duly received by the Defendant on 20th December 2023 whose officer signed it acknowledging receipt of the summons officially by the Defendant. Exhibit MEK-2 is made up of Tax Invoices, Purchase Orders, Delivery Notes and E-mail correspondences duly issued by the Plaintiff to the Defendant and from the Defendant to the Plaintiff. They evidence that the described goods were supplied by the Plaintiff to the Defendant after the Purchase Orders from the Defendant. Upon receipt of the goods, the 5 Delivery Notes were issued by the Plaintiff to the Defendant. The Tax Invoices issued by the plaintiff to the defendant were demanding for payment in respect of the

goods supplied on credit basis under the contract. Exhibit MEK-3 is made up of Purchase and Sales Accounts of the defendant evidencing the tax invoices issued which stated that the payments thereof were to be made by the defendant within 30 days from the date of invoices. Exhibit MEK-4 is made up of the E-mail correspondences and demand notice dated 13th July 2023 evidencing the that following the failure /refusal of the defendant to pay for the supplied goods, the plaintiff sent several reminders through various e-mails correspondence notifying the defendant to clear the outstanding amount but in vain. Exhibit MEK-5 is the board resolution evidencing that following the defendant's failure, refusal and neglect to pay the outstanding amount timely, the Board of Directors of the Plaintiff Company resolved to file this suit to recover the outstanding amount. According to paragraphs 9 and 10 of the Affidavit of Proof, this suit revolves around breach of contract. Was there a valid agreement between 6 the parties? There was no single written contractual document tendered in Court. However, from the totality of the exhibits MEK 1 to MEK 5 to the affidavit of proof, a contractual relationship was explicitly disclosed as between the Plaintiff and the Defendant. The Tax Invoices in particular contained clear contractual terms. The fact that the Defendant complied by making payments for

part of the invoices, clearly confirms that both parties acknowledged the existence of the contract between them. The contract was for supply of an array of products through purchase orders to various camps /locations of the Defendant from Ilala Dar es Salaam warehouse and kitchen to Soga Warehouse. Hence, I hold that there existed a valid contractual relationship between the parties which was evidenced in writing. Was there a breach of the contract by the Defendant? The evidence tendered through the affidavit of proof shows that the plaintiff supplied the Defendant with goods on credit valued at TZS 350, 82.6,981.95 but that the Defendant has paid only TZS. 157,529,371.27. Therefore, the remaining unpaid amount is the sum of Tanzanian shilling one hundred ninety-three million two hundred ninety-seven thousand six hundred and ten shilling sixty-eight cents TZS. 193,297,610.68. According to para 11 of the affidavit, despite the defendant being issued with tax invoices for 7 payment of the unpaid outstanding amount, the defendant has neglected and or refused to pay the outstanding amount of TZS. 193,297,610.68. This constitutes breach of contract on the part of the Defendant. On the Plaintiff suffering damages, it follows naturally that as the Defendant has not yet repaid the Plaintiff the outstanding amounts, the Plaintiff has suffered loss of profit and business income as well

as inconveniences. The plaintiff issued demand notice to the defendant notifying it of the outstanding invoices and demanded the same to be cleared within seven 7 days. The said demand notice went un-responded to by the Defendant. In short, I find this suit has been proved by the plaintiff to the standard required in civil cases against the defendant that there is breach of a valid contract by the defendant's failure to pay the outstanding amount of TZS. 193,297,610.68. This Court in Nitro Explosive (T) Limited v. Tanzanite One Mining Limited, Commercial Case No. 118 Of 2018 (HC) DSM, in the interpretation of Rule 22 (1) as amended, held that, for the plaintiff to enjoy fruits of justice under Rule 22, the following cumulative ingredients must be proved, namely; 8 1. Proof of service to the defendant but who has failed to file the written statement of defence.

2. The plaintiff must make an application in the prescribed Form No. 1 of the First Schedule to the Rules.

3. That the said application in Form No. I must be accompanied by an affidavit in proof of the claim. In the instant suit, there is no dispute that the defendant was served in accordance with the law. However, no written statement of defence was filed on time. Equally, it is not in disputed that the plaintiff has made an application in the prescribed Form No. 1 and the same was accompanied by an affidavit of proof of the claim. Therefore, I hold that the conditions for granting a default judgment are satisfied. In terms of Rule 22(1) of the High Court (Commercial Division) Procedure Rules, G.N No.250 of 2012 as amended by G.N. 107 of 2019, this Court does hereby enter Judgment in Default against the Defendant in favour of the Plaintiff and order that: - a. It is hereby declared that the defendant has breached the supply agreement entered between the Plaintiff and the Defendant in October 2022. 9 b. The Defendant is hereby ordered to pay the Plaintiff the outstanding amount of Tanzania shillings One Hundred Ninety-Three Million Two Hundred Ninety-Seven Thousand, Six Hundred and Ten shillings and Sixty-Eight Cents (TZS. 193,297,610.68). c. The defendant is hereby ordered to pay commercial interest at the rate of 10% per annum on the outstanding amount from the date of filing this suit to the date of Judgment. d. The defendant is hereby ordered to pay TZS. 10,000,000/= as general

damages for breach of contract. e. The defendant is hereby ordered to pay the plaintiff interest on the decretal sum, at the Court rate of 7% per annum from the date of Judgment to the date of full and final satisfaction thereof. f. Costs of the Suit shall be borne by the Defendant. I further order that the decree emanating from this suit be executed subject to Plaintiff's compliance with Rule 22 (2) (a) and (b) of the High Court (Commercial Division) Procedure Rules, 2012 (as amended, 2019. It is so ordered. 14/06/2024 Judgment is delivered in Court this 14th day of June, 2024 in the presence of Mr. Denis Machui, Learned Advocate for the Plaintiff and Mr. Humphrey Aloys, learned Advocate for the Defendant. A. H. GONZI

JUDGE 14/06/2024 11