MOHAMMED ENTERPRISES T LTD VS ETG COMMODITIES LTD COMM NO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE No. 125 OF 2017 MOHAMMED ENTERPRISES (TANZANIA) LIMITED.................PLAINTIFF VERSUS ETG COMMODITIES LTD............................................................ DEFENDANT 27/08&07/09/2018 RULING MWANDAMBO J: This ruling arises from three preliminary objections in points of l aw in reaction to the suit for monetary judgment i nstituted by the Plaintiff against the Defendant. The said preliminary objections are contained in a written statement of defence contendingthat:- 1. The Court has no Jurisdiction to entertain the suit 2. The Plaintiff has no cause of action. 3. The Plaint is not properly verified. Interms of Rule 64 of the High Court (Commercial Division) Procedure Rules 2012 (the Rules) the learned Advocates for the parties filed their respective skeleton arguments prior to the oral hearing.To appreciate the issues canvassed in the skeleton arguments, a brief account of the facts will be necessary. According to the plaint, both the Plaintiff and the Defendant are limited liability companies duly registered under the laws of Tanzania and Singapore respectively.The Plaintiff alleges that it entered into an agreement with the Defendant for the supply of a specified amount of refined sugar ex-Thailand and delivered to Dar es salaam in 1 Tanzania. For reasons which are not apparent on the pleadings there were delays in the presentation of documents for the clearance of the goods made in three consignments which the Plaintiff alleges that they resulted into additional costs amounting to US Dollars 54,550 and for which the Defendant is alleged to have made commitment to compensate the former. It is alleged further that contrary to the commitment for the defrayment of the additional costs, the Defendant has refused and/or neglected to heed to the demands from the Plaintiff and hence the suit for the amount stated above plus interest of 25% per annum to the date of judgment and thereafter an interest of 11% per annum on the decretal amount to the date of full payment and costs of the suit. With the above background, I will now turn my attention to the arguments for and against the preliminary objections. The Defendant's contention in ground one is that in so far as the parties agreed to refer their disputes to arbitration through Refined Sugar Association, the Court has no jurisdiction to adjudicate the matter. Mr. Aidan Kitare learned Advocate made very brief arguments in his skeleton arguments and forcefully reiterated that stance in his oral submissions urging me to dismiss the suit. Ms. Mary Lamwai learned Advocate who advocates for the Plaintiff anchored her arguments on Section 6 of the Arbitration Act, Cap 15 [R.E 20012] and submitted that the preliminary objection was misplaced in so far as the Defendant had a right to apply for stay of the suit pending reference to arbitration before taking any steps in the proceedings. The learned Advocate argued that it was not open for the Defendant to raise a preliminary objection but invoke section 6 of the Arbitration Act by petitioning for stay of the suit. The learned Advocate relied on several decided cases in support of her argument but I find East African Breweries Limited V. GMM Company Limited [2002] TLR 12 (Mroso, J - as he then was) to be mostly relevant for the purpose of this ruling. Like in the present suit, the Plaintiff had instituted a suit against the Defendant for breach of a contract which parties had agreed to refer their disputes to arbitration.Again, like in the instant suit, the 2 Defendant filed its defence raising two alternative preliminary objections one of which was that the suit was incompetent on account of the mandatory arbitration clause in the agreement. This Court speaking through Mroso, J (as he then was) dismissed the objection relying on Theodoro Wendt V. Chhaganial Jiwan and Haindas Munji Tradingin partnership under the style of Chhaganial Jiwan and Company 1T.L.R ® 460 in which Sheridan C.J referred to his earlier decision in Roman V. Besson, Civil Appeal No. 17 of 1921 E.A.C.A (unreported) involving a similar issue whereby the Court had stated at page 19-2: "...Counsel for the respondent appears to have confined his argument to theCourt not having jurisdiction to hear the case. The Court (High Courtjdecided it did not have jurisdiction and this decision does not seem to be well-founded. In my opinion Counsel for the respondent instead of makingan application under section 18 of Schedule II of the Civil ProcedureDecree (of Zanzibar which is in pari materia with our rule 18 of the Second Schedule to the Civil Procedure Code 1966) wrongly contended that the Court had no jurisdiction ... well it is dear from the pleadings and arguments that the case was fought on the issue ofjurisdiction and the counsel for the respondent either disregarded or was unaware of the provisions of section 18 of the Schedule to the Civil Procedure Decree ...It could not, I think, be argued that the time for applying for a stay has not expired in the circumstances...." Further reference was made to Motokov V. Auto Garage Limited and others (1970) HCD n.19 in which Georges, CJ held that the mere submission to arbitration in an agreement had no effect of ousting the court's jurisdiction to entertain a suit filed in disregard of the submission. The position in the instant suit is no better. It is true that the parties had agreed to refer their disputes to arbitration but the Plaintiff instituted the suit nonetheless. Instead of applying for stay of the suit under section 6 of Cap 15 the Defendant took a step in the Proceedings by filing a written statement of defence raising an issue of jurisdiction as it does. On the authorities cited, the Court's jurisdiction was not ousted by the submission but even if it was the case, it was not open for the Defendant to challenge the Plaintiff's move in the manner it has done. The Defendant could apply for stay of the suit pending reference to arbitration before taking any steps in the suit by filing a defence. In other words, the Defendant has missed the boat and so it can no longer travel in that boat or put it differently, the 3 Defendant cannot eat its cake and have it at the same time. I would in the circumstances endorse the submissions by the learned Advocate for the Plaintiff that the preliminary objection is devoid of merit and the same is dismissed. The second ground relates to want of cause of action on which Mr. Kitare submitted that in so far as the basis of the Plaintiff's suit isan unsigned agreement annexed as Pl, the Plaintiff has no cause of action. The learned Advocate argued that the fact that the agreement was not signed by the Defendant was proof of absence of acceptance to complete a contract in terms of Section 2 (1) of the Law of Contract Act Cap 345 [R.E. 2002]. Ms. Mary Lamwai countered the objection relying on a decision of the Court of Appeal in John Byombalirwa Agency Maritime Internationale [1983] TLR 1 discussing amongst others, the meaning of a cause of action. Further reference was made to a decision of this Court in Musang'andwa V. Chief Japhet Wanzagi and others [2006] TLR 351 in which Rweyemamu, J quoted with approval commentaries by P.C. Mogha on the Law of Pleadings in India, Eastern Law House, Calcutta, 15thEdition at P.267 and held that a cause of action will be established where a plaint shows that the Plaintiff enjoyed rights which the Defendant has violated making him liable. Otherwise, the learned Advocate argued that in so far as the Defendant contends that the Plaintiff has no cause of action by reason of the unsigned agreement, that objection ceases to be an objection on a pure point of law because it will require examination of evidence to make that determination. I am inclined to agree with the learned Advocate's submission. Discussing cause of action in cases involving contracts like the instant one, the learned authors of Mogha on Principles of Pleadings in India (supra) make it explicit that: In a suit brought on a contract, the contract must first be alleged, and then its breach, and then the damages. The actual 4 contract which was in force between the parties should alone be alleged... "(atpage 269). There is no doubt in this case that the Plaintiff has alleged the existence of contract which is alleged to have been breached by the Defendant giving rise to the instant suit. That allegation was sufficient compliance with the law enabling the adverse party to know the nature of the Plaintiff's case. The fact that an unsigned contract was annexed to the plaint goes to the admissibility of the same as evidence which cannot be determined at this stage as a preliminary objection on a pure point of law capable of disposing the suit. The law is so settled on what qualifies to be a preliminary objection that one need not cite any authority but if one will be required I will cite Sugar Board of Tanzania V. 21st Century Food and Packaging Limited and 2 Others, CAT (DSM) Civil Application No. 49 of 2005 (unreported) in which the Court of Appeal had the following to say:- "A preliminary objection is in the nature of a legal objection not based on the merits or facts of the case, but stated legal, procedural or technical grounds. Such an objection must be argued without reference to evidence. The fundamental requirement is that any alleged irregularity, defect or default must be apparent on the face of notice of motion so that the objector does not condescend to affidavits or other documents accompanying the motion to support the objection..."( at page 3, emphasis supplied). To the extent relevant to the instant suit, the alleged defect is premised on an annexure to the plaint which takes away the so called preliminary objection from the definition of preliminary objections and so without further ado, I would as I do dismiss the second ground for being untenable. 5 The third ground challenges the paint for being defective on account of improper verification of the plaint contrary to the provisions of Order VI rule 15(2) of the Civil Procedure Code, Cap 33 [R.E 2002]. Mr. Kitare has taken an issue with the verification of the plaint for failing to specify which of the paragraphs are verified on the personal knowledge of the person who verified its contents and which of them verified from information received and believed to be true. The learned advocate contended that the defect was fatal the plaint and prayed it to be struck out. Ms. Mary Lamwai's submission was to the effect that the omission to verify a pleading in accordance with Order VI rule 15(2) of the Civil Procedure Code is not fatal and the same can be cured by amendment of the plaint relying on Philip Anania Masasi V. Returning Officer Njombe North Constituency and Two Others, Misc. Civil Cause No.7 of 1995(unreported). My starting point is the verification clause itself. The verification in the plaint shows that the person verifying it did so on his own knowledge in all paragraphs. There is no indication that any of the paragraphs was verified on information neither is there any suggestion that the verifier verified any of the paragraphs outside his personal knowledge. In my view, it is not the intention of Order VI rule 15(2) of the CPC that every pleading must be verified on information where all facts are based on the personal knowledge of the person verifying the same as it were. At any rate, a determination whether the person who verified the plaint had personal knowledge of all matters he states to have personal knowledge will require going into evidence which removes the preliminary objection from the parameters of a preliminary objection on a pure point of law discussed by the Court of Appeal in Sugar Board of Tanzania vs. 21st Century Food and Packaging Limited and 2 Others (supra). That being the case I am hesitant to hold that the verification of the plaint is defective as contended by the learned Advocate for the Defendant. 6 At any rate, even assuming there was any defect in the verification of the plaint as contended by the learned advocate for the Defendant, I would still not agree with him that the defect is fatal. As rightly submitted by the learned Advocate for the Plaintiff, want of proper verification in a pleading is an irregularity which does not go to the root of the pleading so as to render it fatal. The case cited by the learned Advocate says as much in which Samatta,JK (as he then was) cited with approval commentaries in a book titled: Principles of Pleadings in India by Sir P. Mogha, 14th edition. The learned authors make the following pertinent observations on the point at page 58: Want of signature or verification or any defect ....will not make the pleading void and a suit cannot be dismissed not can a defence be struck out simply for want of or a defect in the signature or verification of the plaint... as these are matters of procedure only. It has been treated to be a mere irregularity and is curable by an amendment. The defect may be cured by amendment at any stage of the suitand when it is cured by amendment, the plaint must be taken to have been presented on the date on the date it was originally presented and not on the date on which it was amended." A similar position was taken by this Court (Katiti, J) Buyogera Julius Bunyambo vs The Attorney General& Denis Ntagazwa HC (TBR) Misc. Civil Cause No. 129 of 1998 (unreported) andResolute (T) Ltd vs. LTA Construction (T) Ltd & 3 Others, Commercial case No 39 of 2010. In the latter decision, Mruma, J stated: "7f /s now a settled principle In our law that procedural provisions contained in the Civil Procedure Code should not be construed In such a manner which will seriously cause Injustice to a party, thus, even if we assume that the plaint was improperly verified (which Is not the case), yet the improper verification would amount to irregularity 7 which would be curable under Rule 17 of Order VI of the Civil Procedure Code which allows amendments of pleadings for the ends ofjustice. Courts exist for doing justice between the parties and not for punishing them. In the case of Cropper vs. Smith (1884) Ch. D 700, the English Court (Bowen, L J) observed that: "I think it is well established principle that the object of the Court is to decide the rights of the parties and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights". ( at page 4 of the ruling) I have no doubt that the foregoing will be sufficient to explain that the mere non- compliance with the verification requirements is not fatal to the pleading and so I will not strike out the pleading if I was to find that the verification is improper.In consequence, I find no merit in the third ground and I likewise dismiss it. In the event and for the foregoing, all preliminary objections are held to be devoid of merit and the same are hereby dismissed with costs. Order accordingly. Dated at Dar es salaam this 7th day of September 2018 8