CIVIL APPEAL NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA DAR ES SALAAM SUB REGISTRY AT DAR ES SALAAM CIVIL APPEAL NO. 24817 OF 2024 (Arising from the Judgment of the District Court of Ilala at Kinyerezi (Hon. Lyana, PRM) in Commercial Case No. 5 of 2021, dated 30th August 2024. __________________________ NATIONAL MICROFINANCE BANK PLC……...….. APPELLANT VERSUS ALLY SALUM T/A HALIFAX TRAVEL & TOURS …RESPONDENT JUDGEMENT Date of last order: 16th December 2024 Date of Judgement: 5th March 2025 MTEMBWA, J.: In the District Court of Ilala, the Respondent herein preferred a suit against the Appellant claiming for a declaratory order compelling the Appellant to release USD 18,856.08, approximately equals to Tanzanian Shillings 44,406,068.4/=. Based on that, the Respondent further claimed for general damages to the tune of USD 150,000 for loss of profit, trust and customers; Payment of Tanzania Shillings 14,000,000/= arising from eviction being computed from the date of filling of the suit to the date of full payment; an order for Payment of 1 Tanzanian Shillings 11,000,000/= being follow-up costs; payment of interest charged at 24% per annum from the date of filling to the date of full recovery and costs of the suit. As discerned from the pleadings, the parties herein have been in a banker–customer relationship since 2009, in which the Respondent maintains his bank account No. 20110026470 with the Appellant. According to Exhibit P1, in 2021, such a relationship culminated into a more commercial or business bond where the two had a contractual business relationship on E-commerce and point of Sale (POS) Merchant. This service enabled the Respondent (who, among others, provided air ticketing services) to access online cardholders' approval or authorization of payments to pay for services rendered. The dispute arose when the Appellant held the Respondent’s money amounting to USD 18,856.08, approximately equals to Tanzanian Shillings 44,406,068.4/= claiming fraudulent transactions. The Appellant vigorously resisted the claim and, in addition, filed a Counterclaim demanding to be paid USD 15,137.92, which was already withdrawn by then. The Appellant revealed that the Respondent fraudulently processed three online transactions to purchase airline tickets for his clients through the Master Card Process 2 Gateway System using VISA cards, amounting to USD 33,994, contrary to the best practice for e-commerce online transactions. The three online payments made were credited to the Respondent's account. However, the Respondent's clients disputed having authorized such payment and reported to the issuing bank. Later, the issuing bank (Truist Bank) filed a "Chargeback claim" against the three online transactions, with VISA for fraudulent transactions made at the auspices of Appellant bank. As a result, while the matter remained pending, the Appellant put on hold payments to the Respondent amounting to USD 18,856.08 until the charge-back window was over and/or the charged bank was successfully defended. With the help of the parties, the following issues were framed on 8th June 2023; one whether there is contract between the Respondent and Appellant regarding e-commerce and point of sale (POS) merchants; two, if the first issues is in the affirmative, whether there is proof regarding fraudulent transaction which led to charge backs; three, whether the Appellant in the main suit was justified not to release USD 18,856.08; four, whether the Respondent in the main suit and the Appellant in the Counterclaim suffered any damages; five, to what reliefs are the parties entitled to. 3 Having considered the evidence adduced by the parties during hearing, the trial Court was satisfied that the Respondent proved the claim to the required standards in civil litigations. Consequently, the Appellant was ordered to release the sum of USD 18,856.08, equal to Tanzanian Shillings 44,406.068. /= failure of which the decretal sum shall attract 7% interest per annum from the date of judgment to the date of full recovery. In addition, the Appellant was adjudged to pay USD 2,000, being general damages and costs of the suit. Dissatisfied, the Appellant fronted the following grounds of appeal and I quote in verbatim; 1. That the Honourable trial Court had no jurisdiction to entertain the matter in contravention of Part IX of the Bank of Tanzania (Financial Consumer Protection) Regulations, 2019 and section 10A of the CPC. 2. That the Honourable Trial Court grossly erred in law in dismissing a prayer to enter judgement on admission on the counter claim, without assigning reasons. 3. The Honourable Trial Court erred in law by failing to embrace the principle that parties and Courts are bound by pleadings when it held that the Appellant was in breach of contract while the same was not pleaded. 4. The Honourable Trial Court erred in law and facts in not allowing a counter claim despite the Respondent defense having evasive denial and despite failure by the respondent to adduce evidence to refute it during hearing. 4 5. The Honourable trial Court erred in law and fact by failing to properly evaluate and analyze evidence on records thereby reaching to an improper conclusion. 6. Tire Honourable trial Court erred in law by delivering unreasoned judgment and a decree which is unlawful. 7. That the Honourable trial Court erred in law and fact in holding that the Appellant did not prove the existence of fraudulent transactions and that had no right to hold the Respondent's account, in total disregard of exhibit D1 Collectively. 8. Tire Honourable trial Court erred in law and fact by entering the judgment in favour of the Respondent to the extent of reliefs awarded When the matter came for orders on 16th December 2024, the Appellant was represented by Mr. Erick Denga, the learned counsel, while the Respondent appeared in person. By consent, parties agreed to argue this Appeal by way of written submissions. Having passed through the records, I am satisfied that the parties adhered to the agreed schedule to which I am indebted. Arguing on the first ground of appeal, Mr. Mkumbukwa, having prefaced on what transpired before, submitted that it is on record, as per the testimony, if read together with Exhibit P2, the central dispute that led to the Respondent's suit against the Appellant bank was the 5 blocking or holding of his payment/account to the tune of USD 18,856.08. He referred this Court to paragraphs 3,4,7,11, and the relief clause in the Plaint. He added that since there is no dispute that the Respondent is the client to the Appellant’s bank, he falls within the definition of a consumer provided for under regulation 3 of the Bank of Tanzania (Financial Consumer Protection) Regulations, 2019. Since the Respondent was dissatisfied with the conduct/service of the Appellant bank as service provider, in holding card payment or his account without justification as he pleaded at paragraph 4 of his Plaint, the proper avenue to channel his claim was to the Bank of Tanzania in view of regulation 42, if read together with regulation 51 of the Bank of Tanzania (Financial Consumer Protection) Regulations, 2019. In his further submissions, the learned counsel observed that reading the provisions cited above, together with other provisions such as regulations 54, 55, 56, 57 and 59 the same Regulation, it is clear that the Court has no jurisdiction to determine consumer claims against the financial service provider, in our case, the Appellant. Those complaints are amenable by the financial service provider internally, and thereafter to the Bank of Tanzania, whose decision as 6 per regulation 53(1), is binding and conclusive. To bolster his arguments, he cited the case of Tanzania Revenue Authority vs. Tango Transport Company Limited, Civil Appeal No. 84 of 2009 [2016] TZCA84 [26 October 2016], cited with approval in Tanzania Ports Corporations vs. Evaristo Miho, Civil Appeal No. 87 of 2023, where it was observed that a question of jurisdiction can be belatedly raised and canvassed even on appeal by the parties or the court suo motu, as it goes to the root of the trial. To buttress further, the learned counsel cited the case of Salim O. Kabora vs. TANESCO Ltd and 2 Others, Civil Appeal No.55 of 2014, Court of Appeal of Tanzania, where it was observed that; Much as we agree with the appellant that there is no express provision ousting the High Court's jurisdiction to entertain the dispute but, in view of the fact that there is a specific forum which is created by statute and which is mandated to provide adequate remedy to the parties, we have no hesitation to hold that, in the present case, the High Court jurisdiction is impliedly barred by the EA and EWURA Act. By analogy to what we decided in the case of Tanzania Revenue Authority vs Tango Transport Company Ltd (supra), the appellant was thereby obligated to take his complaint to the Authority (EWURA) and thereafter exhaust the appeal forums available under that Act. 7 In response to the first ground of appeal, Mr. Mabondo argued that Part IX of the Bank of Tanzania (Financial Consumer Protection) Regulations, 2019 and section 10A of the Civil Procedure Code Cap 33, R.E 2019 do not oust or limit ordinary Courts like the trial Court from hearing matters emanating from consumer claims against financial service providers. Seeking refuge from regulation 51 (1) (a) and (b) thereof, the learned counsel observed that the provisions provide for the procedure or conditions upon which the complainant can access or file a complaint to the Bank of Tanzania. Firstly, when the complaint has not been received or responded to by the financial service provider or his complaint has not been attended to; and secondly, when the complainant is dissatisfied with the decision of a financial service provider. Mr. Mabondo also submitted that the word “may” confers discretionary power to the complainant to file a complaint with the Bank of Tanzania or otherwise. He cited the case of UAP Insurance Tanzania Limited vs. Noble Motors Limited, Civil Application No. 260 of 2016. To support his stance, he cited section 53(1) of the Law of Interpretation Act, Cap 1, R.E 2019 which provided that where in a written law the word “may” is used in conferring a 8 power, such word shall be interpreted to imply that the power so conferred may be exercised or not, at discretion. In addition, the learned counsel referred the Court to the import of regulation 52 (d) of Regulations and argued further that the complaint may be referred to the Bank of Tanzania only if the same has not been referred to the Court of law. Based on the foregoing arguments, cited laws and authorities, Mr. Mabondo insisted that the trial Court had jurisdiction to entertain the matter and that the Bank of Tanzania is not the only avenue the consumer may use to refer his or her complaint if dissatisfied with the service provider's action. In his brief rejoinder to the first ground of Appeal, Mr. Mkumbukwa considered the argument by the Respondent’s counsel unmerited, stating that the word “may” implies discretion. He contended that the word “may” in regulation 51 connotes the options or discretions available to the complaint as submitted. Conversely, the word “may” is used to indicate that a consumer who has not received a response to his complaint filed with the service provider or is not satisfied with the response thereof may lodge a complaint or may not, with the Bank of Tanzania. He thus considered irreverent the cited 9 case of UAP Insurance and section 53(1) of the Interpretation of laws Act. Mr. Mkumbukwa also reiterated that the Bank of Tanzania (Financial Consumer Protection) Regulations, 2019, provide for the exclusive jurisdiction of all disputes arising from consumer and financial service provider to the service provider itself and the Bank of Tanzania. He cited the case of Swiftline Logistics Limited vs. Exim Bank Tanzania Limited Civil Appeal No. 3335 of 2024. Having carefully considered the parties' arguments, the question would be whether the first ground of appeal is meritorious. In determining this Appeal, I shall also seek the guidance of the Court of Appeal of Tanzania in Mapambano Michael @ Mayanga vs. Republic, Criminal Appeal No. 258 of 2015, where it was observed that the first appellate Court must subject the entire evidence on record to a fresh re-evaluation to arrive at a decision and that it may coincide with the trial Court or may be different altogether. While guided by the above principle, it is also a trite law that whoever alleges the existence of any fact bears the duty to prove the same. This principle is gathered from sections 110, 112, and 115 of the Evidence Act, Cap 6 RE 2022 and judicial precedents, 10 including Manager NBC Tarime vs. Enock M. Chacha (1993) TLR 228. Indeed, the Central Bank of Tanzania issued the Consumer Protection Regulations known as the Bank of Tanzania (Financial Consumer Protection) Regulations 2019, GN No. 884 of 2019. The Regulations set the mandatory requirements for all banking and Financial Institutions (Financial Service Providers) operating in Tanzania to have a consumer protection governance mechanism. The Regulations expressly define financial consumer protection to include laws, institutions, practices, and policies to safeguard consumer rights, enable consumers to make informed financial decisions, and ensure fairness in providing products and services by financial service providers regulated by the Bank of Tanzania. Among others, financial institutions regulated by the Bank of Tanzania include banks, microfinance institutions, and bureaus de change. The keywords to the industry are defined under regulation 3 of the Regulations. The “Bank” is defined as the Bank of Tanzania and “the financial service provider” as an institution licensed, regulated, and supervised by the Bank. While “the consumer” is defined as a person who uses, has used, or is using any of the financial products 11 or services provided by the financial service provider, “a complaint” is defined to mean dissatisfaction expressed by a consumer on a financial product or service provided by a financial service provider. “The Court” is defined to mean the High Court of Tanzania. The Regulations require financial institutions to provide a mechanism for handling consumer complaints, including the manner of receiving, processing, and determining consumer complaints. Depending on the nature of the Complaint, regulation 46 provides a specified time frame between 6 and 24 hours for a Financial institution to respond to a customer upon receipt of the complaint. Under regulation 51, if such a complaint cannot be resolved within the specified time, the same shall be referred to the Bank of Tanzania for determination. According to regulation 52, a complaint can be entertained by the Bank of Tanzania only where the customer has suffered loss, the complaint has not been subjected to court proceedings, or where the Complaint has been finally dealt with to the consumer's satisfaction. In view of regulation 54, if the matter has been referred to the Bank of Tanzania for determination, the Bank shall issue an Award. If any party is dissatisfied with the Bank of Tanzania Award, it may 12 appeal to the Governor within 7 days for revision, who shall decide within 21 days in view of regulation 55. If there is further dissatisfaction, the complainant or financial institution may apply for judicial review to the Court in terms of regulation 56. According to regulation 57, the Bank may refer to the Court matters that require the Court’s guidance or interpretation. From what I have endeavored herein above, a consumer dissatisfied with the service provider's service may channel the complaint to the Bank. Upon receipt of the complaint, the service provider must attend to and resolve it within 6 to 24 hours. If such a complaint cannot be resolved within the specified time or resolved unsatisfactorily, the same shall be referred to the Bank of Tanzania for determination unless the complaint has been subjected to court proceedings or has been finally dealt with to the consumer's satisfaction. If the consumer or service provider is dissatisfied with the Bank of Tanzania Award, may appeal to the Governor within 7 days for revision from the day of the decision, who shall decide it within 21 days. If there is further dissatisfaction, the complainant or financial institution may apply for judicial review to the High Court of Tanzania. 13 From the above brief, the subordinate Courts have been barred from entertaining complaints arising from consumer dissatisfactions between the financial service provider and the consumers or clients. Such jurisdiction is entrusted by law to the Bank of Tanzania, where no Complaint Declaration Form is signed by the parties, the Governor of the Bank of Tanzania, and the High Court of Tanzania by way of judicial review. Even the High Court of Tanzania has no original jurisdiction to entertain such matters. It must be noted that the service provider is also mandated to refer the matter to the Governor if dissatisfied with an award issued by the Bank of Tanzania. In case of further dissatisfaction, the service provider still has room to refer the matter to the High Court by way of Judicial Review. As correctly alluded to by Mr. Mkumbukwa, the central dispute that led to the Respondent's suit against the Appellant bank at the trial Court was the blocking or holding of his payment/account to the tune of USD 18,856.08. As a result, as prefaced before, the Respondent prayed for an order of refund of the money held by the Appellant, general and specific damages, and interest of the decretal sum and costs of the suit. In this respect, I agree with the Appellant’s counsel that the complaint by the Respondent (consumer) originated 14 from the dissatisfaction with the service rendered by the Appellant (the financial service provider). In such circumstances, the Respondent was required to channel his dissatisfaction to the Appellant (financial service provider) and then to the Bank of Tanzania if dissatisfied. Further dissatisfactions would be submitted to the Governor of the Bank of Tanzania and, lastly, to the High Court of Tanzania by way of judicial review. Similarly, the Appellant would have waited to express her dissatisfaction with the Respondent's actions through the same channel. In other words, the Appellant's complaint would also find its way to this Court by way of judicial review unless settled by the Governor of the Bank of Tanzania. In Adella Stanslaus Assey t/a Mount Kibo Pharmacy 2012 vs VODACOM Tanzania Public Ltd Company and Another (Civil Case No. 8 of 2023) [2023] TZHC 22054 (20 October 2023), this Court had an opportunity to consider the implication of sections 42, 49 and 51 of the Bank of Tanzania (Financial Consumer Protection) Regulations, 2019. In the end, it observed as follows; 15 Based on the above cited provisions, it goes without saying that this matter has been preferred before this court prematurely. I am of the firm view that if the plaintiff had exhausted the above laid down procedures by referring the dispute to the respective institutions, determination of the dispute by this court would be simplified. It is trite law that procedures are maidens of justice. It is for that reason that the above noted procedures were prescribed. On another occasion, this Court faced a similar situation in Riziki Mwitu Kiondo & 29 Others vs. Vodacom Tanzania PLC &2 Others (Civil Case No. 153 of 2022) [2023] TZHC 17474 (26 May 2023). Having given it thoughtful attention, it observed as follows; Indeed, the Bank of Tanzania (Financial Consumer Protection) Regulations G.N. No. 884 of 2019 provides for an elaborate avenue to address any complaint of this nature and actually provides with what reliefs the Bank of Tanzania may grant and penalties for any service provider who fails to comply with the decision of the Bank of Tanzania. I am of the settled view that the plaintiffs, have to lodge their complaint at the Bank of Tanzania, thus, this Court has no jurisdiction to entertain this suit. Mr. Mabondo submitted that the word “may” confers discretionary power to the complainant to file a complaint with the Bank of Tanzania or otherwise. With respect, I find the argument 16 manifestly flawed. He appeared to have misapprehended the import of regulation 51 of the Regulations. As correctly alluded to by Mr. Mkumbukwa, which I find to be the correct interpretation, the word “may” in regulation 51 connotes the options or discretions available to the complainant to file the complaint or not. Similarly, the consumer is barred from filing a complaint with the Bank of Tanzania only if, among other things, the same has not been subject to legal proceedings before a court or tribunal or any other competent authority. I have passed through the records and noted that the dispute has never been a subject of legal proceedings before the Court or a tribunal of competent jurisdiction before it was filed before the trial Court. There was, therefore, nothing prohibiting the Respondent from filing his complaint in accordance with the Regulations. In such circumstances, the Respondent cannot seek refuge under regulation 52(d) of the Bank of Tanzania (Financial Consumer Protection) Regulations, 2019. That said and done, since I have determined that the trial Court had no jurisdiction to entertain the suit, I find no need to address my mind to other grounds of appeal. In effect, the first ground of appeal is meritorious, and I proceed to allow it. 17 In the upshot, on account of the aforesaid reasons, the proceedings and resultant Judgment and Decree of the trial Court are hereby nullified and set aside. The Appellant shall recover her costs arising out of this appeal. I order accordingly. Right of appeal explained. DATED at DAR ES SALAAM this 5th March 2025. H.S. MTEMBWA JUDGE 18