CIVIL APPEAL NO 478 OF 2022 NORTH MARA GOLD MINE LIMITED VS ISAACK SONS COMPANY LIMITED

IN THE COURT OF APPEAL OF TANZANIA AT MWANZA ( CORAM: KEREFU. 3.A.. MWAMPASHL J. A. And FELESHI, J.A.l CIVIL APPEAL NO. 478 OF 2022 NORTH MARA GOLD MINE LIMITED....... ...... ............................... APPELLANT VERSUS ISAACK & SONS COMPANY LIMITED........................................... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Commercial Division at Mwanza) fNangela, 3.) dated the 10th day of June, 2022 in Commercial Case No. 03 of 2020 JUDGMENT OF THE COURT 04h & W h December, 2024 MWAMPASHI. J.A.: This appeal seeks to challenge the judgment and decree of the High Court of Tanzania, Commercial Division, at Mwanza (the High Court), dated 10.06.2022, in Commercial Case No. 03 of 2020. In the said suit, the judgment was entered for the respondent against the appellant whereby the appellant was ordered to pay the respondent a total sum of USD 17,476,132.6029 being the respondent's entitlement to revenue royalties from 2013 up to 2021, a sum of royalties revenue of 1% of the gold produced from Nyabirama Pit for the years 2022 up to the closure of the pit, interest on the decretal amount at the rate of 7% from the date of the judgment to the date of full payment of the amount awarded, USD 300,000.00 as general damages and costs of the suit. Dissatisfied, the appellant has preferred the instant appeal before the Court. We wish to point out, at this very stage, that, for purposes of appreciating what is the dispute between the parties, the decision of the High Court, grounds of complaint and also for narrowing down issues for our determination, we will have to give a somehow detailed background of the case from which the instant appeal has arisen. The genesis of the dispute between the parties from which the suit before the trial court was based, were the three contracts executed by the parties on 03.09.1999 (Exhibits PI, P2 and P3). By those contracts, after being paid a total sum of USD 10,800.00 as consideration, the respondent, as an original holder and beneficiary of the mining and surface rights registered as Mining Right Nos. TR 13/91, TR 14/91 and TR 15/91 (henceforth, the Claim Title Areas) situated at Nyamongo in Tarime District, granted to Afrika Mashariki Gold Mines Limited (AMGM), the appellant's predecessor, exclusive rights to carry out over the said Claim Tittle Areas, mining operations including other purposes ancillary to the conduct of mining operations, such as, disposing, stacking or dumping any mineral or waste products and constructing any necessary facilities to achieve service or utilise the land. Under each of the three relevant contracts, of much interest and the epicentre of the dispute between the parties, was Clause 3 on royalty by which the parties agreed that: "3. R O YA LT Y In further consideration o f the rights granted to AMGM under th is Agreem ent and the transfer o f the Application to AMGM,\ AMGM and the A pplicant agree that i f A M G M com m ences m in in g o p e ra tio n s on a n y p a rt o f th e A p p iic a tio n then: 3.1. The A p p iic a n t w ill be e n titie d to a ro y a lty e q u a i to th e vaiu e o f 1% o f a ll g o ld p ro d u ce d fro m a n y p a rt o f th e a re a co ve re d b y th e A p p lica tio n , 3.2. The paym ent o f the royalty under Clause 3.1 to the A pplicant w ill be made a t the end o f each calendar quarter calculated as a t the la st day o f the quarter a t the London spot g o ld price in cash in Tanzanian sh illin g s (such am ount to be calculated a t the exchange rate between Tanzanian S h illin g and US D ollars as a t the date o fpaym ent". [Emphasis added] According to the plaint, it was claimed by the respondent that, the appellant had, in 2013, commenced mining operations and had been producing gold from the Claim Title Areas but, in breach of the contracts, it has failed to furnish the respondent with information pertaining to production of gold from the Claim Title Areas and most importantly, has also failed to pay the respondent his entitlement of revenue royalties at 1% of the gold produced from the Claim Title area as agreed under the contracts. It was further claimed by the respondent that, according to the report submitted by the appellant to the Tanzania Extractive Industries Transparency Initiative (TEITI - Exhibit P7), as of 30.06.2017, the appellant had extracted substantial amount of gold from the Claim Title Areas of which its value entitled the respondent to a total sum of USD 21,610,827.00 being the agreed 1% revenue royalties. The respondent thus, sued the appellant praying for: 1. An order fo r paym ent o f USD 21,610,827.00 being its entitiem ent revenue royalties up to 30.06.2017. 2. An order com pelling the appellant to pay the respondent the sum o f ro ya ltie s' revenue o f 1% o f the value o f g o ld produced up to the years 2017, 2018’ 2019 and years to come up to the closure o f the mine. 3. Interests a t court rates from the date o fjudgm ent and decree to the date o f fin a lpaym ent o f the am ount claim ed. 4. Genera! dam ages fo r the breach o f contract. 5. Costs. In its written statement of defence, in principle, the appellant did not deny the existence of the three contracts between it and the respondent but, it denied to have been in breach of them. In particular, the appellant categorically denied to have produced any gold from the Claim Tittle Areas. It maintained that, the Claim Tittle Areas were being used for dumping and other functions ancillary to mining operations. It was also the appellant's defence that, since no gold has been produced from the Claim Tritle Areas, there was no gold production information available to be furnished to the respondent. As on the report the appellant had submitted to TEITI, it was its defence that the report was in relation to other different claim areas and not from the respondent's Claim Title Areas. The appellant thus, prayed for the dismissal of the suit with costs. From the pleadings, the following issues were framed and recorded by the High Court: 1. W hether the appellant entered into agreem ent w ith the respondent fo r the paym ent o f royalties. 2. W hether there was production o f gold from the respondent's form er Claim Title Areas. 3. I f the answ er in the second issue is in the affirm ative whether the appellant was in breach o f the term s and conditions o f the three agreem ents by fa ilin g to pay the accrued royalties. 4. In the event the answ er to the th ird issue is in the affirm ative, whether the respondent suffered specific and genera! damages. 5. To what re lie fs were the parties entitled. In its judgment, the High Court, having considered the evidence on record, answered the first obvious issue in the affirmative. Specifically, on the second issue, the High Court found that the Claim Title Areas were being fully utilized by the appellant for mining operations and other activities ancillary to mining operations. It was also found that the appellant had dug, strip-mined and constructed a berm/bench on one of the Claim Title Areas, that is, Mining Right No.TR 13/91 (Exhibit PI) which forms part of Nyabirama Pit from which the appellant was digging and removing mineralized ores from which refined gold is obtained. It was thus, concluded by the High Court that, the appellant did not only commence the mining operations within the Mining Right No.TR 13/91 but, was also producing gold. In other words, the High Court found it established that, the Mining Right No.TR 13/91 is linked to and located within the Nyabirama Pit from which gold ores were being mined, processed and refined gold produced by the appellant. The second issue was thus, answered in the affirmative. The third issue was also answered in the affirmative. It was found that, the appellant was in breach of the three contracts and further that the respondent was thus, entitled to the claimed revenue royalties in respect of the Mining Right No.TR 13/91 which, as alluded to above, was found by the High Court to be linked to the Nyabirama Pit from which gold was being produced by the appellant. Regarding the fourth issue, having disregarded the TEITTs Report (Exhibit P7) on which the respondent's claim for USD. USD 21,610,827.00 %s special damages, was based, because it was found that the report had no evidential value in establishing that the specific amount claimed was the value of the gold produced from the Claim Title Areas, the High Court, found that the respondent had failed to strictly prove the claimed amount as special damages. Worth mentioning, though, at this stage, is also the fact that, after the parties had closed their respective cases and in the course of composing the judgment and having found that the respondent had failed to prove the amount claimed as specific damages, the High Court, did not end there, as it would have ordinarily been. Based on what the High Court found to be, the spirit of playing its rightful role of ensuring that, the truth is revealed and that justice and fairness prevail over any injustice suffered and further being mindful of its noble duty to uphold the truth and administering justice in a fair manner, it summoned the counsel for the parties and asked them to address the court on the issue whether it was just, appropriate and hence necessary for the court to be availed with information from the appellant regarding; one, gold production, in terms of amount produced and its value from Gokona Pit from the year 2013 to 2021; two, the amount of gold and its value from Nyabirama Pit from 2013 to 2021 and, three, the amount of gold and its value produced from Nyabigena Pit from 2013 to 2021. Despite the objection raised by the counsel for the appellant, to the above posed proposition, the High Court, ruled and ordered the appellant to file to the court the above specified information. It is noteworthy that, according to the information filed to the High Court, it was found that, from 2013 to 2021, the Nyabirama Pit had produced 1,296,102.88 ounces of goid whose total value was USD. 1,747,613,260.29. Based on that amount, calculations made by the High Court resulted into a conclusion that for each year, the respondent was entitled to USD. 1,941,792.51143333 as its deserved 1% royalty revenue. That being the case, the High Court concluded that the rightful amount payable as 1% royalty revenue to the respondent from 2013 to 2021 was USD. 17.476,132.6029 which was accordingly awarded to the respondent as specific damages. As alluded to earlier, the respondent was also awarded interest on the awarded amount of USD 17,476,132.6029 at the rate of 7% from the date of judgment to the date of full payment of the amount awarded, USD 300,000.00 as general damages and costs of the suit. Aggrieved, the appellant has, in support of its appeal, raised a total of twenty grounds of appeal which for the sake of clarity and completeness are reproduced as hereunder: 1. That, the claim s fo r royalties fo r 2012 to 23.12.2014 were tim e barred and the High Court Judge erred in law and in fact fo r entertaining and determ ining the said claim s. 2. The Honourable High CourtJudge erred in law and in fact fo r awarding the respondent US$ 17,476,132.6029 as sp ecific dam ages which were not proved. 3. The Honourable High Court Judge erred in law and in fact fo r holding that there was production o fgold from the respondent's form er M ining R ight No. TR 13/91. 4. The Honourable High CourtJudge erred in law and in fact fo r aw arding the respondent royalties paym ent to the tune ofU S$ 17,476,132.6029 in absence o fp ro o f o f the agreed London Spot G old Price. 5. The Honourable High Court Judge erred in law and in fact fo r relying on inform ation/docum ents which was not produced and adm itted as evidence. 6. The Honourable High CourtJudge erred in law and in fact fo r awarding the respondent 1 % royalty fo r a ll g o ld produced from the whole Nyabiram a P it contrary to the contract between the parties. 7. The Honourable High CourtJudge erred in law and in fact fo r awarding sp ecific dam ages fo r the period from 1/7/2017 to 2021 which were not sp ecifically pleaded. 8. The Honourable High Court Judge erred in law and in fact fo r ordering the appellant to pay royalties revenue o f 1% fo r gold produced from Nyabiram a P it fo r the years from 2022 onward up to the closure o f the m ine p it 9. The Honourable High Court Judge erred in law and in fa ct fo r shifting the burden o fp ro o f to the appellant. 10. The Honourable High Court Judge erred in law and in fact in ordering the appellant to a va il the Court w ith gold production inform ation from 2013 to 2021. 11. The Honourable High Court Judge erred in law and in fact fo r holding that the balance a t the negotiation tables were heavily ti/ted in favour o f the appellant. 12. The Honourable High Court Judge erred in law and in fact in determ ining issues regarding the interpretation o f the agreem ent which were not pleaded and leg ally raised. 13. The Honourable High Court Judge erred in law and in fact fo r applying the contra proferentem rule to the contract between the Appellant and the respondent. 14. The Honourable High Court Judge erred in iaw and in fact fo r holding that the respondent has been facing d ifficu ltie s in getting inform ation from the appellant. 15. The Honourable High Court Judge erred in law and in fact fo r holding that the appellant breached the term s and conditions o f the agreem ent in respect o f form er M ining R ight No. TR 13/91 by failin g to pay accrued royalties. 16. The Honourable High CourtJudge erred in law and in fact fo r awarding royalties fo r the periods p rio r and after waste stripping and construction o f bench and berm in M ay 2015 a t form er M ining R ight No. TR 13/91. 17. The Honourable High CourtJudge erred in iaw and in fact fo r aw arding the respondent general damages. 18. The Honourable High CourtJudge erred in law and in fa ct fo r aw arding the respondent generaldam ages o f USD 300,000 which is inordinately high. 19. The Honourable High Court Judge erred in iaw and in fa ct in taking into account irrelevant factors in assessing generaf damages. 20. The High Courtjudgm ent is not supported by evidence. When the appeal was placed before us for hearing, the appellant was represented by Mr. Faustine Malongo and Ms. Caroline Kivuyo, both learned counsel, whereas, the respondent had the services of Dr. Rugemeleza A.K. Nshala assisted by Messrs. Nyaronyo Mwita Kicheere and Heri Kayinga, all learned counsel. It is noteworthy that, in compliance with rule 106 (1) and (7) of the Tanzania Court of Appeal Rules, 2009 (the Rules), the counsel for the parties, had earlier on filed their written submissions for and against the appeal, which they sought to adopt to form part of their respective oral submissions. Having gone through the record of appeal, particularly the pleadings, evidence and the decision of the High Court and also after we have considered the submissions made for and against the appeal, we are of the view that, in determining the appeal, we will be guided by, among others, two elementary legal principles: that, he who alleges must prove and that, in civil suits, the burden of proof lies on the plaintiff. These principles are codified under sections 110 (1), 111 and 112 of the Evidence Act [Cap. 6 R.E. 2022] (the Evidence Act) thus: "110, -(1) W hoever desires any court to give judgm ent as to any leg al rig h t or lia b ility dependent on the existence o fany facts which he asserts m ustprove that those facts e xist 111. The burden o f p ro o f in a su it proceeding lie s on that person who w ould fa il if no evidence a t a ll were given on th eir side. 112. The burden o f p ro o f as to any p articu lar fa ct lie s on that person who wishes the court to believe in its existence, unless it is provided by law that the p ro o f o f that fa ct sh a ll He on any other person ". It is also our observation that, based on the pleadings, the crucial issue, as it was also identified by the High Court, was generally, whether the appellant was in breach of the contracts and in particular, whether there was production of gold from the Claimed Title Areas. This issue is what forms the basis of the appellant's complaint in the 3rd ground of appeal that, the High Court erred in law and in fact in holding that there was production of gold from the Claim Tittle Areas and in particular, from the Mining Right No. TR 13/91. Ordinarily, we would have commenced our deliberation and determination of the appeal with the 3rd ground of appeal which, as we have alluded to above, is central and decisive in the instant appeal. However, with the view of laying the foundation for the determination of the said ground, we find it necessary to begin with the 11th, 12th and 13th grounds of appeal which we propose to deal with them conjointly. Before venturing into the determination of the said three grounds, we, however, should first determine the 1st ground of appeal which is to the effect that, the claims for royalties for the years ending June, 2013 and June, 2014 under paragraphs 11 and 12 of the plaint, respectively, were time barred. It was argued for the appellant that, since the respondent's suit was based on breach of contract then, in terms of item 7 of the Schedule to the Law of Limitation Act [Cap. 89 R.E.2019] the period of limitation within which such claims ought to have been brought before the High Court, was 6 years. It was thus, argued that, since according to the plaint the alleged production of gold from the Claim Tittle Areas commenced in 2013 then, while the claims under paragraph 11 of the plaint ought to have been filed latest by June, 2019 those under paragraph 12 had to be filed latest by June, 2020. As the suit was filed on 23.12.2020, it was argued, the claims under paragraphs 11 and 12 of the plaint were time barred and the High Court erred in entertaining the same. In their reply, it was submitted for the respondent that, the claims under paragraphs 11 and 12 of the plaint were not time barred as claimed by the appellant. It was argued that the cause of action did not arise till when the respondent became aware that there had been production of gold from the Claim Title Areas hence entitling it to the agreed 1% royalty, in November, 2015, through the TEITI Report which indicated that there had been production of gold from the Claim Title Areas. Having considered the submissions made by the learned counsel for the parties on the 1st ground of appeal and after examining the plaint, we agree with the counsel for the appellant that the respondent's claims in question, were, indeed, time barred. Since the suit was based on breach of the contracts, the cause of action arose when the contracts were allegedly breached. According to paragraph 9 of the plaint, it was clearly pleaded by the respondent that, the appellant had been mining and producing gold from the Claim Tittle Areas since 2013, but never furnished the respondent with information pertaining to production of gold. It was thus, apparent from the pleadings that, the respondent knew that gold was being produced hence its entitlement to 1% royalty since 2013. This was also the time when the contacts were allegedly breached and when the cause of action arose. The argument that, the respondent became aware that there had been production of gold in November, 2015 through the TEITI Report, does not feature in the plaint. The TEITI Report is just mentioned under paragraph 11 of the plaint as the basis for the amount of gold allegedly produced and not as the basis for the respondent's knowledge that there had been production of gold from the Claim Title Areas. We also find that the complaint that the appellant had never availed the respondent with data or information regarding gold production from the Claim Tittle Areas, baseless. It is our considered view that, under the circumstances of this case, even though the contracts were silent on the requirement and modality of relaying such data or information to the respondent, in the absence of any prohibition for the respondent to request and demand to be availed by such data or information, the respondent being a party to the three contracts in question, was obliged to demand for the same from the appellant. There is also no evidence on record showing that, the respondent had requested or demanded for such data and information or even asked to access the Claim Title Areas for inspection, and refused. In his own words, PW1, upon being asked in cross-examination, as to whether he ever demanded for any such information, he responded, at page 161 of the record of appeal, that: "Id o not remember if we ha ve ever asked fo r a report from the appeiiant'. Since, as we have alluded to above, the respondent knew that there had been production of gold from the Claim Tittle Areas and that the appellant had refused to pay 1% royalty hence in breach of the contracts since 2013 as pleaded under paragraph 9 of the plaint, then the period of limitation of 6 years, began to run from 2013 and ended in 2019. The claims for the year ending June, 2013 under paragraph 11 of the plaint were thus, supposed to be brought to the High Court not later than June, 2019 and not 23.12.2020 when the suit was filed in court. The same applies for the claim under paragraph 12 for the year ending June, 2014 which were supposed to be brought not later than June, 2020. Ground 1 of the appeal is thus with merit and it is accordingly allowed. The claims in question were time barred and the High Court ought not to have entertained them. Let us now, turn to the 11th, 12th and 13th grounds of appeal, under which the High Court is being faulted for holding that the balance at the negotiation table titled in favour of the appellant and for delving into interpretation of terms of contracts which were allegedly not pleaded or legally raised and also for applying the contra proferentem rule. On these grounds, it was argued for the appellants that, it was wrong for the High Court to hold that the balance at the negotiation table tilted in the appellant's favour on the basis of mere allegations that the contracts were drafted by the appellant's lawyers in the absence of the respondent's lawyer. It was insisted that, the conclusion was based on wrong premises and was against the principle of sanctity of contract as there is no law requiring that contracts should be drafted by lawyers for both parties. It was further contended that, PW1 who signed the contracts for the respondent knew and admitted that he comprehended what the contracts were all about. The counsel for the appellant also submitted that, parties to a contract are the best judges of their own interests. The appellant's further submissions on the 11th, 12^ and 13th grounds of appeal were to the effect that, the conclusion by the High Court that the bargaining power of the respondent and its ability to comprehend and appreciate the terms of the contracts was minimal, was baseless because neither in the plaint nor in its evidence, did the respondent allege that the contract were void as it had less bargaining power or that it did not comprehend the terms of the contracts. It was argued that the respondent being a limited liability company whose directors include its chairman who is a PHD holder and an ambassador as well as PW3, a holder of a degree in geology, specialised in the mining industry, its capability of comprehending the contracts cannot be doubted and undermined. It was contended that, since the respondent signed the contracts, it was bound by them whether or not it was ignorant of their precise legal effect. Regarding the complaint that the High Court delved into the determination of issues that were not pleaded or legally raised, the relevant issues were listed to include the issues that, Clause 3 is ambiguous, the Kiswahili version of the contracts not being produced by the appellant, the contracts being read to PW1 by a third party, issues regarding the confidentiality clause, that USD 10,800.00 as consideration was meagre and the issue that the respondent did not understand the terms of the contracts. It was insisted that, apart from the fact that those issues were not pleaded or properly raised by the respondent, they were not relevant to what was the dispute between the parties. As on the application of the contra proferentem rule, it was submitted that the rule applies only in cases of ambiguity, that is, where there are more than one possible meaning or where a word or statement can be understood in different interpretations. It was pointed out that, the holding that Clause 3 was ambiguous, was based on a wrong finding that it was not stated in the contracts how and from where or what data or information pertaining to gold produced from the Claim Title Areas, was to be obtained. It was insisted that there was no ambiguity in Clause 3 and further that, ambiguity does not mean absence of another clause which one might wish to be included in a contract. In response to the 11th, 12th and 13th grounds of appeal, it was submitted for the respondent that, since the fact that the contracts were prepared by the appellant without the involvement of the respondent's lawyers or any other person with legal mind who could have ably comprehended the meaning and effect of the contracts, was not disputed, the High Court cannot be faulted in concluding that the negotiation table tilted in favour of the appellant. It was insisted that, based on the evidence on record, the contracts were not negotiated but were just imposed and placed before the respondent's official (PW1) who did not understand the English language, for him to sign. It was further submitted for the respondent that, the contracts were drafted in favour of the appellant who was a stronger party. It was argued that, as rightly held by the High court, a stronger party should not be allowed to take advantage of a weaker party and that the High Court did not err in applying the rule of contra proferentem because Clause 3 was ambiguous. It was insisted that, where a clause of a contract is ambiguous it must be interpreted against the stronger party who insisted that it be included in the contract. In determining the 11th, 12th and 13th grounds of appeal, having considered the submissions made for and against the grounds, we should start by pointing out that, since the parties, in the instant matter, are companies hence, legal persons, then, they had equal capacity to enter into the three contracts in question. In that regard, we find it strange and inconceivable when it is argued that the respondent was a weaker party who signed the contracts without comprehending what the terms of the contracts were all about or that the balance of the negotiation table tilted in favour of the appellant. It is also our considered view that, under the circumstances of this case, the fact that the contracts were drafted by the appellant without the involvement of the respondent's lawyer, is immaterial. Since the contracts were signed by the respondent and in the absence of any complaint that inducement or force was applied, there cannot be any justification for the respondent's complaint that it did not know the effects of signing the contracts. In the book titled " Chitty on Contracts, Vol.l 29th Ed, London Sweet & Maxwell, 2004, also cited in the appellant's written submissions, it is stated that: "Where the agreem ent o f the parties has been reduced into w riting and the docum ent containing the agreem ent has been signed by one or both o f them, it is w eii established, th e p a rty sig n in g w ill o rd in a rily be b o u n d b y th e term s o f th e w ritte n ag reem en t w h eth er o r n o t h e is ig n o ra n t o f th e ir p re cise le g a l e ffe ct". [Emphasis added] Under paragraph 5 of its plaint, the respondent pleaded that the contracts were prepared and finalized by the defendant's (appellant's) management and lawyers in the absence of the plaintiff's lawyer or its fully authorized representative with legal knowledge. This complaint was persistently repeated during the trial, particularly from the testimony of PW1 and it forms the basis for the High Court conclusion that the balance of the negotiations table tilted in the appellant's favour. In so pleading and complaining, the respondent, was in essence, suggesting that its consent was not free when entering into the contracts. According to section 14 (2) of the Law of Contract Act [Cap 345 R.E. 2019] (the LCA) consent is not free when it would not have been given but for the existence of coercion undue influence, fraud, misrepresentation or mistake. It is also provided under section 16 (1) of the LCA, that: "A contract is said to be induced by \undue influence' where the relationship subsisting between the parties are such that one o f the parties is in position to dom inate the w iii o f the other and uses that position to obtain an unfair advantage over the other". The point we want to deliver here is that, because, in essence, the respondent's complaint appears to be that its consent was not free as it was caused by undue influence then, in terms of section 19 (1) of the LCA, the respondent ought to have avoided the contract instead of suing the appellant for breach of contract. This also applies to an argument that Clause 3.1 of the contracts regarding 1% royalty was just a sugar-coated clause inserted in the contracts by the appellant just to lure the respondent sign the contract. It is our considered view that, if that was the case, then, in terms of section 17 (1) (c) of the LCA, there was fraud entitling the respondent to avoid the contract under section 19 (1) of the LCA. It is also our observation that, the High Court, properly, to our view, observed that although the agreement between the parties might have become a poor bargain for the plaintiff (respondent), it was however, not the court's function to improve that bargain. As observed by the High Court, where parties freely agree to terms of contract, regardless of whatever terms they choose 21 and even if the terms are unfavourable or result in a poor bargain for one party, the task of the court is simply to enforce the contract and not to improve the parties' bargains. Parties should be bound by their bargains and courts should always uphold the principle of freedom of contract. Courts should be reluctant to interfere with the terms of a contract even where one party later finds that he made a poor bargain. See- Lulu Victor Kayombo v. Oceanic Bay Limited and Another, (Consolidated Civil Appeals Nos. 22 & 155 of 2020) [2021] TZCA 228 (7 June 2021; TanzLII). We also agree with the counsel for the appellant that, Clause 3 of the contracts is not ambiguous hence, the rule of contra proferentem was, under the circumstances of this case, not applicable. In its plain meaning, Clause 3 of the contracts clearly provides that, the parties agreed that, if the appellant commences mining operations on any part of the Claim Title Areas and if gold is produced from that part, the respondent would be entitled to royalty of 1% of the value of the produced gold. The entitlement of 1% royalty was dependent not on commencement of mining operations on any part of the Claim Title Areas but on production of gold therefrom. Clause 3, to our view, is clear with no ambiguity. As argued by the counsel for the appellant, the fact that in the contracts there were no clauses on the mode of how the respondent was to get information or data of gold produced from the Claim Title Areas, does not render Clause 3 ambiguous. With Clause 3 of the contracts which, as we have pointed out above, is clear and unambiguous, there was no need of any further interpolation of the terms of the contracts. There was no need, for instance, to consider whether USD 3,800.00 received by the respondent as consideration was meagre or not. Likewise, issues of confidentiality clauses needed no digressing. Those issues were neither pleaded nor were they relevant to what was the bone of contention between the parties, that is, whether there was production of gold from the Claim Tittle Areas entitling the respondent to 1% royalties of the value of the gold produced therefrom. It is an elementary rule that where the meaning of the words, be it in a statute or contract, is plain and unambiguous, the court is left with no choice but to give effect to its plain meaning. See- Dunia Worldwide Trading Company Limited v. Consolidated Holding Corporation (Civil Application No. 61 of 2008) [2008]TZCA 54 (18 September 2008;TanzLII). It is also a cardinal principle of the law that parties are not only bound to their pleadings but, also that the court can only determine matters that have been pleaded by the parties. See- Nkulabo v. Kibirige [1973] 1 E.A. 102 . It is also our further observation that the principles of sanctity and freedom of contract ought to have been observed. The two competent parties had negotiated and had struck the deal. Each party was bound to perform the contracts in accordance with the agreed terms. In the case of Abualy Alibhai Azizi v. Bhatia Brothers Ltd [2000] T.L.R. 288, it was stated that: 23 "The p rin ciple o f sanctity o f contract is consistently reluctant to adm it excuses fo r non-perform ance where there is no incapacity, no fraud (actual o r constructive) o r m isrepresentation ; and no principle o f p u b lic p o licy prohibiting enforcem ent". For the above reasons we find that the 11th, 12th and 13th grounds of appeal are meritorious. The parties had equal capacity to enter into the contracts and the balance at the negotiation table did not tilt in favour of the appellant. Further, the High Court unnecessarily delved into issues which were not only irrelevant to the central issue but which were also neither pleaded nor formally raised by the parties. Having done with the 11th, 12th and 13th grounds of appeal in the above manner, we should now turn to the 3rd ground of appeal which, for convenience, will be conjointly dealt with the 15th grounds of appeal. As we have intimated earlier, the central issue was whether the appellant was in breach of the contracts and in particular whether Clause 3.1 of the contracts was breached by the appellant. We have already held that Clause 3 of the contracts was clear to the effect that once mining operations are commenced by the appellant in any part of the Claim Tittle Areas and most importantly, if gold is produced from any part of the said areas, the respondent would be entitled to a royalty equal to the value of 1% of all the gold produced therefrom. In our considered view, it was clearly agreed by the parties that the 24 respondent's entitlement to 1% royalty would arise only where gold is produced from any part of the Claim Title Areas. Since the respondent claim for USD 21,610,827.00 being the agreed 1% revenue royalties, was based on the understanding that substantial amount of gold had been produced from the Claim Title Areas and as it was the defence by the appellant that no gold had been produced from the Claim Title Areas that would have entitled the respondent the claimed 1% revenue royalty, then, it was for the respondent to prove, on the balance of probability, that, indeed, there was production of gold from any part of the Claim Title Area. The pertinent question is thus, whether the respondent discharged its duty of proving that there was gold production from any of the Claim Title Areas, to the required standard. The appellant's submissions in support of the 3rd and 15th grounds of appeal are to the effect that, the respondent failed to prove that there was any production of gold from any part of the Claim Title Areas. We were referred to page 161 of the record of appeal where PW1 is on record stating that he did not know how much gold was produced from the Claim Title Areas because there were no any returns sent to the respondent. Even PW2 is on record at page 170, stating that he could not tell that the appellant got gold from the Claim Title Areas or not. It was again, argued that PW3 is also on record denying to know if any amount of gold had been produced from the relevant areas. It was further submitted for the appellant that, despite the evidence from the respondent's witnesses that there was no proof of any production of gold from the Claim Title Areas, the High Court held, at page 587 of the record of appeal that, the appellant did not only commence mining operations in Mining Right No. TR 13/91 but also that, the appellant was producing gold out of such mining operations. We were also referred to page 609 of the record of appeal, where the High Court concluded that the appellant had continued to extract gold from the respondent's former claim title area, in particular from the Mining Right No. TR 13/91 which forms part of the Nyabirama Pit. It was argued that the conclusion by the High Court was against the evidence on record and also that the contracts by the parties had nothing to do with gold produced from Nyabirama Pit. It was again submitted that construction of the berm/bench within the Mining Right No. TR 13/91 did not amount to gold production. Responding to the submissions made in support of the 5th and 15th grounds of appeal, it was submitted for the respondent that, the finding by the High Court that there was production of gold from the Claim Tittle Area and particularly from the Mining Right No.TR 13/91 cannot be faulted. It was argued that, gold production from that particular area was proved to the required standard and further that since the finding was based on facts, the same cannot be interfered with by this Court. To buttress this point, the respondent's counsel referred us to our previous decisions in Ahmed Shilla Mkumbo v. Republic (Criminal Appeal No. 235 of 2010) [2010] TZCA 18 (25 November 2010;TanzLII) and Yassin Salum Kagurukila v. Republic (Criminal Appeal No. 106 of 2019) [2022] TZCA 677 (7 November 2022;TanzLII) whereby in the latter case it was stated that where a case is essentially one of fact, in absence of any indication that the trial court failed to take some material point or circumstances into account, it is improper for the appellate court to say that the trial court has come to an erroneous conclusion. Picking from the above argument, which tend to suggest that the Court is restricted from interfering with the High Court findings based on facts, our response is that the argument is misconceived. Under rule 36 (1) (a) of the Rules, on any appeal from a decision of the High Court or Tribunal acting in the exercise of its original jurisdiction, the Court is empowered to re-appraise the evidence on record and draw its own inferences of facts and reach at its own findings of facts. See also- Paulina Samson Ndawavya v. Theresia Thomasi Madaha (Civil Appeal No. 45 of 2017) [2019] TZCA 453 (11 December 2019;TanzLII), Jamal A. Tamim v. Felix Francis Mkosamali & The Attorney General (Civil Appeal No. 110 of 20120 and Matha Wejja v. Attorney General and Another [1982] T.L.R. 35. The High Court did also find that, based on the evidence of PW1, PW2 and PW3, the Claim Title Areas were being fully utilised by the appellant for mining operations and other activities ancillary to mining operations. Then, based on the testimony of PW2 and the report on the site visit (Exhibit P5), the High Court found that the Mining Right No. TR 13/93 which is part of the Claim Title Areas, was being utilised for gold-bearing ore stock piling (dump) and that it supports a reinforced concrete wall fence, water piping system, observation tower and it forms the first berm/bench of INyabirama Pit. That the area was being utilised by the appellant in the above manner was admitted by DW1 and DW3 in cross-examination who added that apart from construction of the berm, the Mining Right No. TR 13/91 was stripped. It was thus, concluded by the High Court that since the appellant had dug and constructed a berm/bench on the Mining Right No. TR 13/91 which forms part of Nyabirama Pit from which the appellant was also digging and removing mineralized ores, there was no doubt that there was gold production and the respondent was entitled to payment of royalty. It was found by the High Court that the appellant did not only commence mining operations in the Mining Right No. TR 13/91 but, also that, the appellant was producing gold out of such mining operations. Having revisited the evidence on record, we are not in agreement with the High Court that, based on the evidence on record, it could be concluded that gold was produced from any part of the Claim Title Areas. Though, as also found by the High Court, there was evidence in abundance proving that the appellant had commenced mining operations and was fully utilizing part of the Claim Title Areas in terms of Clause 1.1 of the contracts by stacking, dumping mineral wastes, construction of berm/bench and a reinforced concrete wall fence, water piping system, observation tower etc, there is no evidence to prove that gold was being or had been produced from any part of the Claim Title Areas. The mining operations going on over the Claim Title Areas, to our view, could not amount to the gold production meant by the parties under Clause 3.1 of the contracts. According to the testimony of Engineer Perez Joshua Ntinginya (PW2) at page 169 of the record of appeal, when he visited the site, he did not find any mining but, he witnessed activities relating to mining being done on the Mining Right No. TR 13/91. Even in his statement found at page 260 of the record of appeal, PW2 merely concluded that the Claim Title Areas were being fully utilised by the appellant for mining activities and other activities ancillary to mining operations for gold production, and therefore that, the appellant was benefiting from utilising the Claim Title Areas. It is thus, clear that, all what was testified by PW2 was to the effect that, the appellant had commenced mining operations over the Claim Title Areas, mostly over the Mining Right No.TR 13/91, which to our view, was in terms of Clause 3.0 of the contracts. PW2's evidence did not prove that gold had been or was being produced for the Mining Right TR. 13/91. 29 With due respect, we do not agree with the conclusion of the High Court that because the appellant had dug, and constructed a berm/bench on the Mining Right No. TR 13/91 which forms part of Nyabirama Pit from which the appellant was also digging and removing mineralized ores from which the final refined gold is obtained, then gold was being produced from Mining Right No. TR 13/91. It should be borne in mind that, the Nyabirama Pit from which gold was being produced, was not subject to the contracts between the parties. In the instant case, the respondent was duty bound to prove that gold was being produced from any part of the Claim Title Areas subject to the contracts it had entered with the appellant and not that gold was being produced from Nyabirama Pit. Since there was no proof that gold had been produced or was being produced from any part of the Claim Title Areas, then, the respondent was not entitled to 1% royalty in terms of Clause 3.1 of the contracts and the appellant was thus, not in breach of the contracts. Having found that there was no breach of the contracts, meaning that the respondent failed to prove its claim, ordinarily we would have ended here because all the remaining grounds have been rendered redundant. However, for the sake of completeness we think we should, a lb eit briefly, consider the 2nd,4th 5th and 9th grounds of appeal which generally are complaints regarding not only against the award of USD 17,476,132.6029 as specific damages but, also the manner they were awarded. On the above grounds of appeal, the counsel for the appellant submitted that, it was wrong for the High Court to have awarded USD 17,476,132.6029 as specific damages which besides being not proved as the High Court itself found, they were awarded based on the document containing data/information on the value of gold production from Nyabirama Pit from 2013 to 2021, which was not admitted in evidence and after the burden of proof had improperly been shifted to the appellant. In reply, it was submitted for the respondent that the High Court did not err in awarding the specific damages in question and further that, the High Court decision in awarding the same was based on findings of facts to which this Court had no jurisdiction to interfere unless it is shown that the decision is a result of a complete misapprehension of the substance, nature or non­ direction on the evidence, a violation of some principles of law of procedure or have occasioned a miscarriage of justice. Regarding this line of argument, we have already restated what are the powers of this Court on appeal, in terms of rule 36 (1) (a) of the Rules. We will not repeat ourselves. It was also argued for the respondent tha,t the procedure adopted by the High Court was in order as the High Court had powers to do so in terms of Orders XI rule 12 and XVIII rule 12, both of the Civil Procedure Code [Cap.33 R.E. 2019] (the CPC) as well as under section 176 (1) of the Evidence Act. The counsel for the respondent further contended that, the document containing information of the value of gold produced from Nyabirama Pit, was properly relied upon because before its receipt, the parties were heard. It was contended that once filed, the document became part of the court record. It is trite law that specific damages are awarded not only upon being specifically pleaded but, where they are also strictly proved. See- Zuberi Augustino v. Anicet Mugabe [1992] T.L.R. 137 and Stanbic Bank Tanzania Limited v. Abercrombie & Kent (T) Limited, Civil Appeal No. 21 of 2001. In the instant case, the fact that, the respondent failed to strictly prove the specific damages it had claimed, cannot be disputed. In its judgment, at page 600 of the record of appeal, the High Court concluded that: "Put differently, Exh.P7 is o f no value in establishing that the sp ecific am ount claim ed by the P la in tiff was produced from the form er claim areas. That being said, although le g ally the P la in tiff m ay be en titled to paym ent o f specific damages, te c h n ic a lly th e am ou n t cla im e d b y th e P la in tiff h a s n o t been s tric tly p ro v e d to have a rise n o r d e riv e d from am ou n t o f g o ld p ro d u ctio n s o le ly p ro d u ce d from th e fo rm e r cla im a re a s". [Emphasis added] As amply explained earlier and without being repetitive, it suffices to point out at this stage, that, after the High Court had retired and having found, in the course of composing its judgment, that, the respondent had failed to prove the specific damages it had claimed, as above demonstrated, the High 32 Court, despite the objection raised by the counsel for the appellant, ordered the appellant to file and avail the court with information or data regarding the amount of gold and its value produced from three pits including from the Nyabirama Pit covering the period from 2013 to 2021. Based on the said document filed by the appellant's counsel containing data/information of the value of the gold produced from Nyabirama Pit, the High Court, made its calculations and concluded that the rightful amount payable as 1% royalty revenue to the respondent from 2013 to 2021 was USD. 17,476,132.6029 which was accordingly awarded to the respondent as specific damages. The burning question here is whether, considering the fact that the parties had closed their respective cases and the High Court had already found that the respondent had failed to strictly prove specific damages, it was in order and proper for the High Court to order the appellant produce evidence to prove what the respondent had failed to do. We are increasingly of the view that, the procedure adopted by the High Court was out of the ordinary and unwarranted in our adversarial system in which, among other things, it is upon the plaintiff to prove his case. Regardless of the reasons given by the High Court for adopting the said procedure, such as, the spirit of playing its rightful role of ensuring that truth is revealed and that justice and fairness prevail over any injustice suffered and its noble duty to uphold the truth and administering justice in a fair manner, still, it was not proper for the High Court, having found that the respondent had failed to prove its claim for specific damages, to have ordered and forced the respondent to produce data which would prove the respondent's claim. In a more or less similar scenario in the case of Geita Gold Mining Ltd & Another v. Ignas Athanas (Civil Appeal No. 227 of 2015) [2019] TZCA 55 (6 April 2019;TanzLII), the Court observed that: "As rig h tly subm itted the learned counsel fo r the appellants, as a m atter o f law, special dam ages m ust be sp ecifically pleaded and strictly proved - see A n ic e t M ugabe versu s Z u b e riA u g u stin o [1992] TLR. 137\ A s th e re co rd show s, the resp o n d en t sta te d th e s p e c ia l dam ages in h is p ie a d in g s b u t d id n o t p ro ve them b y evidence , In th e absence o f evid en ce to p ro ve s p e c ia l dam ages, th e a p p ro p ria te cou rse to ta ke w as fo r th e fir s t a p p e lla te co u rt to d ism iss th e re sp o n d e n t's cla im s fo r s p e c ia l dam ages on g ro u n d th a t th e y w ere n o t p ro v e d to th e re q u ire d stan d ard . To o rd e r re -tria l w as n o t a p p ro p ria te rem ed y a s b y a ll n e ce ssa ry im p lica tio n s w o u ld te n d to su g g e st th a t th e fir s t a p p e lla te c o u rt h a d an in te n tio n to a s s is t th e re sp o n d e n t to e sta b lish h is case... [Emphasis added] The High Court, was thus, not justified to adopt such a procedure which tends to suggest that it intended to assist the respondent prove its claim for specific damages. By adopting such a procedure, the High Court, did also improperly shift the burden of proof to the appellant We also find that, Orders XI rule 12 and XVIII rule 12 of the CPC cited by the counsel for the respondent to justify the High Court adopted procedure, are not applicable to the case at hand. Whereas under Order XI rule 12, the document produced should be so produced by a party upon oath which was not the case in the case at hand, Order XVIII Rule 12 provides for recall of witnesses by the court. We are also of the considered view that, under the circumstances of this case, where the High Court had already found and concluded that the respondent had failed to strictly prove specific damages, section 176 (1) of the Evidence Act, could not be applicable. It should also be pointed out that the data or information pertaining to the amount of gold and its value produced from Nyabirama Pit, that was filed by the appellant in compliance with the order of the High Court and from which the amount of USD. 17,476,132.6029 as specific damages was calculated, were irrelevant in as far as the case between the parties was concerned. What was required was the amount and value of gold produced from the Claim Tittle Areas and in particular from the Mining Right No. TR 13/91. Nyabirama Pit was not the subject of the contracts entered between the parties and the agreed respondent's entitlement to 1% royalty of the value of all gold produced was for gold that would be produced from any party of the Claim Title Areas and not from Nyabirama Pit. It is also in evidence that Nyabirama Pit contained 35 about 14 more other claim title rights. The calculations of USD 17,476,132.6029 awarded to the respondent as specific damages were thus, based on wrong premises not pleaded in the respondent's plaint. Consequently, the 2nd,4th, 5th and 9th grounds of appeal are allowed. All said and done and for the foregoing reasons, we find the appeal meritorious. The respondent had completely failed to prove its claims against the appellant to the required standard and the High Court ought to have dismissed the same. We thus, allow the appeal, quash and set aside the High Court Judgment and decree. Appeal allowed with costs. DATED at DAR ES SALAAM this 17th day of December, 2024. R. J. KEREFU JUSTICE OF APPEAL A. M. MWAMPASHI JUSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL The Judgment delivered on this 18th day of December, 2024 in the presence of Mr. Iman Mafuru, learned counsel for the Appellant and Mr. John Carol Chogoro, learned counsel for the Respondent, is hereby certified as a true cof