NOVA ESPERANCE SERVICES LTD VS SVT T LTD MISC

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA COMMERCIAL DIVISION AT PAR ES SALAAM MISCELLANEOUS COMMERCIAL APPLICATION NO.10383 OF 2024 (Arising from Commercial Case No. 21 of 2023) NOVA ESPERANCA SERVICES LIMITED........................ APPLICANT VERSUS SVT TANZANIA LIMITED........................................... RESPONDENT RULING Date of Last Order: 03/07/2024 Date of Ruling: 22/08/2024 MKEHA, J: The applicant is moving the court for an order of lifting veil of incorporation of the respondent so as to hold the Directors of the respondent responsible and liable for all debts in respect of Commercial Case No. 21 of 2023. The application is made under sections 38, 68 (e) and 95 of the Civil Procedure Code as well as section 2(3) of the Judicature and Application of Laws Act. The application is supported with an affidavit sworn by Mr. Frank Kifunda, an advocate authorised by the applicant to make oath in support of the application. 1 | Page Despite service, the respondent did not respond to the application. As such, the application is being determined basing on the affidavit in support of the application, whose contents, were adopted by Mr. Benedict Magoto Mayani learned advocate for the applicant, as his submissions. In terms of paragraph 5 of the affidavit, efforts of the applicant to trace the respondent's attachable properties in view of executing the decree against the latter, were unsuccessful. It is for that reason the applicant seeks lifting of veil of incorporation to hold the respondent's directors liable. The only determinative issue is whether absence of attachable properties belonging to a judgment debtor company is a sufficient ground for lifting veil of incorporation. It is settled that, before the decree holder succeeds in having the veil of incorporation lifted for purposes of execution of a decree, he has to prove that, according to the circumstances prevailing at the time of making an application for execution of a decree, there is no real separation between the company and its owners. The decree holder has also to prove the company's actions which are wrong and fraudulent, say, concealing assets of the company or doing other acts calculated to obstruct execution of the decree against it and that, unless the veil of incorporation is lifted, the decree holder stands to suffer for not enjoying 2 | Page what the court decreed in his favour. See: YUSUPH MANJI VS. EDWARD MASANJA & ANOTHER (2006) TLR, 127. The affidavit accompanying the instant application does not in any way state acts done by the company in bad faith for purposes of frustrating execution of the decree. Absence of attachable properties without evidence that the same have been fraudulently hidden or disposed by a judgment debtor company, is no good ground for lifting veil of incorporation. For the foregoing reasoning, the application is dismissed for being unmeritorious. DATED at DAR ES SALAAM this 2/d dayy AUGUST 2024. C.P.MKEHA JUDGE A 22/08/2024 COURT: Ruling is delivered in the presence of Mr. Benedict Magoto Mayani learned advocate for the appljcant. C.PJMKEHA JUDGE 22/08/2024 3 | Page