osmanli building centre company ltd vs altas yag su ve tarim urunleri gida insaat otomotiv nakliyat sanayi ve ticaret as 2023 tzhccomd 294 14 august 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM MISC. COMMERCIAL APPLICATION NO. 81 OF 2023 (Arising from Commercial Case No. 90 of 2022) OSMANLI BUILDING CENTRE COMPANY LIMITED....................................................... APPLICANT VERSUS ALTAS YAG SU VE TARIM URUNLERI GIDA INSAAT OTOMOTIV NAKLIYAT SANAYI VE TICARET A.S.......................... RESPONDENT RULING A.A. MBAGWAJ. This is an application for security of costs filed under Order XXV Rule 1(1) and 2(1) of the Civil Procedure Code. The applicant, being the defendant in Commercial Case No. 90 of 2022 has brought this application praying for the following orders; 1. The Honourable Court may be pleased to order the respondent to give security for costs incurred and those likely to be incurred by the applicant defending the suit and thus order the deposit of United States i Dollars Thirty-Six Thousand Six Hundred Thirty-Two and Nine Cents (USD 36,632.9) as security for costs. 2. Costs of this application 3. Any other reliefs) this Honourable Court may deem fit and just to grant. The application is supported by an affidavit affirmed by Ramzan Turkmen, the applicant's Principal Officer. In contrast, the application has been contested by the respondent through a counter affidavit of Ugul Altas, the Principal Officer of the respondent. The applicant states that the respondent ALTAS YAGSU TARIM URUNLERI GIDA INSAAT OTOMOTIV NAKLIYAT SANAYI VE TIGARET A.S who is the plaintiff in Commercial Case No. 90 of 2022 is a limited liability company incorporated under the laws of Turkey. That the said respondent instituted the suit against the applicant claiming, among other orders, payment of USD 1,004,430.08. The applicant further states that the respondent has no immovable properties in Tanzania nor does any of its officers reside in Tanzania. As such, the applicant prays the Court to order the respondent to deposit security for costs in Commercial Case No. 90 of 2022 to the tune of 2 USD 33, 623.9 to cover the costs that are likely to be incurred by the applicant in case the main case is dismissed. In reply, the respondent does not deny being a foreign company incorporated and conducting its business in Turkey. Further, the respondent does not deny the fact that it has no immovable properties in Tanzania. When the application was scheduled for hearing Ms. Elizabeth Kifai and Mr. Malick Hamza, learned advocates appeared for the applicant whereas the respondent was represented by Winjaneth Lerna, learned advocate. Submitting in support of the application, Ms. Elizabeth Kifai had it the applicant has to establish three ingredients namely, one, that the plaintiff is residing outside Tanzania, two, that the plaintiff does not possess any sufficient immovable property in Tanzania other than the property in dispute, and three, that the court, on its own motion or upon an application by the defendant, finds it fit to grant the application. She expounded that the respondent is a foreign company incorporated in Turkey as clearly pleaded under paragraph 1 of the plaint and paragraph 2 of the respondent's counter affidavit. Further, the applicant's counsel argued that the respondent has failed to show, in the counter affidavit, that she owns any immovable property in Tanzania. In support of her contention, the learned counsel cited the case of JCR Enterprises Limited vs Islam and Two Others, Commercial Case No. 77 of 2007, in which Masati J as he then was, held that where a company does not have sufficient immovable property, the court should grant order for security for costs. More so, the applicant's counsel expounded that award of costs depends on various factors including complexity of the case and value of the subject matter. She explained that since the subject matter in this case is USD 1,004,430.08, MM Attorneys who were engaged by the applicant for legal representation in Commercial Case No. 90 of 2022 charged the applicant 3% of the claimed amount in the plaint as instruction fee. In fine, learned counsel submitted that the applicant has established the requisite conditions and for that reason she urged the Court to find the application meritorious and grant the orders sought. In reply, Ms. Winjaneth Lerna, learned counsel for the respondent submitted that there are only two conditions for grant of application namely, that the respondent is a foreign company and that it does not possess any immovable property in the country. The respondent's counsel told the Court that she had no dispute with the fact that the respondent is a foreign company. 4 f However, Winjaneth remarked that the applicant failed to prove that respondent does not have immovable property. On this, the learned counsel for respondent relied on the provisions of section 110 of the Evidence Act which requires a party who asserts certain facts to prove them. Regarding the amount for security for costs to wit, USD 36,632.09 proposed by the applicant, the respondent's counsel had it that it is highly exaggerated. She argued that the applicant attached an engagement letter to the affidavit but the same is not signed by the client. Winjaneth opined that such an ailment connotes that the indicated amount is not genuine. She thus, strongly submitted that lack of proof of the amount claimed for security for costs by the applicant leaves doubt as to whether the same has been charged. With respect to USD 3,000 as consequential costs likely to be incurred, the respondent's counsel submitted that the applicant failed to attach a receipt of filing fee. Due to absence of receipt, the respondent's counsel opined that the same has also been exaggerated. To that end, she prayed the Court to dismiss the application. Alternatively, the learned counsel urged the Court to allow the deposit of a reasonable amount should it find it fit to grant the application. 5 I have gone through the parties' depositions and their rival arguments. The key issue for determination is whether the applicant has established the conditions required under Order XXV Rule 1(1) of the Civil Procedure Code. It is undisputed fact that the respondent company filed a suit to wit, Commercial Case No. 90 of 2022 against the applicant claiming for a sum of USD 1,004,430.08 being outstanding dues for the purchase of refined sunflower oil from Altinordu-Ordu/Turkey to Dar es Salaam. It is also very clear under paragraph 1 of the plaint that the respondent is a Turkish company and its operations are conducted in Turkey. Moreso, under paragraph 4 of the applicant's affidavit, it is deponed that the respondent has no sufficient immovable properties within the country. This fact was not countered by the respondent. Order XXV Rule 1(1) entitles the Court to order the plaintiff to give security for costs where the plaintiff is not residing in the country and does not possess any sufficient immovable property within Tanzania. As alluded to above, it has been sufficiently established that the respondent is a foreign company and does not possess any sufficient immovable property 6 within the country. As such, the applicant has satisfied the requirements under Order XXV Rule 1(1) of the Civil Procedure Code. Furthermore, Ms. Elizabeth Kifai, submitted that the applicant arrived at the proposed amount of USD USD 36, 623.9 after computing the instruction fee based on 3% of the claimed amount in the plaint i.e., USD 1,004,430.08 plus incidental costs. The applicant's counsel expounded that USD 33,632.9 is an instruction fee which has been calculated based on 3% of the liquidated claim whereas USD 3,000 is estimated ancillary costs which are likely to be incurred by the applicant. The guide on instruction fee is provided under the Advocate Remuneration Order. Item 8 of the Ninenth Schedule to the Advocates Remuneration Order entitles an advocate to charge 3% of the liquidated claim where the claim is TZS 400,000,000/= or above. Thus, having considered the above, it is unfeigned findings that the proposed amount for security for costs is fair and reasonable. All the above considered, I find the application meritorious. Consequently, I order the respondent who is the plaintiff in Commercial Case No. 90 of 2022 7 to deposit in court a sum of USD 36, 623.9 within thirty (30) days from the date of this ruling. Costs to follow the event in the main suit. It is so ordered. A.A. Mbagwa JUDGE 14/08/2023 8