RAMADA INVESTMENT LTD VS PACIFICIC INTERNATIONAL LINESPTE LTD COMM CASE NO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO 81 OF 2012 RAMADA INVESTMENT LIMITED t/a QUALITY FURNITURE AND GENERAL APPLIANCES..................................... PLAINTIFF VERSUS PACIFICIC INTERNATIONAL LINES (PTE) LTD..................... 1s t DEFENDANT PACIFICIC INTERNATIONAL LINES (T) LTD ........................2n d DEFENDANT RULING BUKUKU, J On 19th July, 2012, Ramada Investments Limited, as a Plaintiff mounted this suit against the defendants claiming for payment of special damages amounting to United States Dollars 55,418.112, interest at the rate of 12% from the date of filing of the suit to the date of judgment, an order for attachment of the defendants ship to be found within this court's jurisdiction, general damages and costs of the suit. It is alleged that, sometimes in February 2010, the Plaintiff ordered various goods from China, to wit, an iron machine and various types of chairs. The said goods were packed in Container No. PCIU 9855239 belonging to the defendants' ship at Shanghai Port, and upon i arrival at Dar Es Salam, the Plaintiff's officials discovered that the container had a very huge hole at the top side. As a result thereof, rain water had entered into the said container, and the contents thereof were destroyed and became unsalable. It is further alleged that, the Plaintiff has suffered special and general damages whereby, despite several demands, the Defendant has refused to settle the amount claimed hence this suit. Contemporaneously with the filing of this suit, the defendants filed a defence and a notice for preliminary objection in which they raised three points. The objections that from the basis of this ruling are as hereunder:- (i) That, this Honorable Court lacks jurisdiction to determine this suit; (ii) That the suit is time barred; (iii) That the suit has erroneously been initiated against the second defendant who is the disclosed agent of the first defendant; Both counsel presented lengthy written submissions in support of their respective views. I thank both of them. In his reply to the defendant's submission, counsel for the plaintiff agreed with the defendant's view with regard to the joinder of the second defendant, while the principal is know. Under such circumstances, I will not waste my time arguing this point, and thus I will dwell on the two points of objections which I will tackle them together. 2 Arguing on the issue of jurisdiction, it is the submission of Mr. Kesaria, Learned Counsel for the Defendants that, the objection as to jurisdiction of this court arises from section 31 of the terms and conditions shown on the reverse of the bill of lading which reads: "31- Law and Jurisdiction (1) The contract evidenced hereby or contained herein shall be governed by the Singapore law; (2) Any claim against the carrier hereunder shall be determined by Singapore Courts to the exclusion o f the jurisdiction o f another country." Submitting further, Mr. Kesaria alluded that, the defendants have produced and annexed to their written statement of defence as annexure DI a blank copy of the bill of lading and the terms and conditions on the reverse of it. He submitted further that, at clause 1 of the terms and conditions on the reverse of the said bill of lading, the terms "merchant" is defined to include any person who at any time has been or becomes a shipper, holder, consignee, the receiver of goods, any person owing or entitled to possession of the goods or of the bill of lading and any person acting on behalf of any such person. He thus surmised that, the plaintiff in this matter is covered by this definition. Citing a plethora of cases, it is Mr. Kesaria's submission that, it is settled law that, the parties are bound by the choice of law and jurisdiction contained in the contract of carriage, as evidenced by the bill of lading, and therefore, since the plaintiff has not discharged its 3 burden to show strong grounds or exceptional circumstances why the exclusive jurisdiction clause on the applicable law would be unjust, illegal or against public policy, then this court has no jurisdiction to hear and determine the matter. On the issue of limitation, it is Mr. Kesaria's submission that, under clause 9 of the terms and conditions specified on the reverse of the bill of lading, the defendants are contractually discharged from its liability whatsoever unless the suit is brought in a proper forum within nine months after delivery of the goods. Mr. Kesaria surmised that, according to the plaint, the goods were received by the plaintiff in the year 2010, and the suit was commenced in July, 2012, which is well beyond the nine months limitation prescribed in clause 9 of the terms and conditions of the bill of lading, and therefore the defendants are discharged from all liability in respect of the plaintiff's claim. Not only that, Mr. Kesaria went a mile further and submitted that, apart from the provision of clause 9 of the bill of lading, this suit is also time barred pursuant to Article 3 of the International Convention for the Unification of Certain Rules of Law relating to bill of lading, also commonly known as the "Hague Rules", which Tanzania acceded to this international maritime convention on 12th March, 1962 and has therefore, as a contracting state, agreed to be bound by the uniform rules of law relating to bills of lading prescribed in the said convention. Submitting further, Mr. Kesaria argued that, Pursuant to Article 2 of the convention, all contracts of carriage of goods by sea shall be subject to the provisions of the convention, and under Article 3 of the convention, 4 the carrier and the ship, (the defendants herein) shall be discharged from all liabilities in respect of loss or damage unless the suit is brought within one year after delivery of the goods. It is thus the argument of Mr. Kesarial that, other than the contractual discharge of liability after 9 months pursuant to clause 9 of the terms and conditions specified on the reverse of the bill of lading, the defendants are likewise discharged from liability pursuant to Article 3 of the Hague Rules. Arguing with equal force, Mr. Mnyele, Learned Counsel for the plaintiff submitted that, annexure DI referred to by the counsel for the defendants is not the contract (bill of lading) that were entered between the parties, rather, their concern is on annexure QF-3. He further submitted that, there is no evidence at all that the terms contained in annexure D are also in annexure QF-3, regard being that, the goods under dispute were imported from China and not Singapore, and that, the arguments raised by the counsel for the defendants would hold water if they counl be referring to actual documents that constituted a bill of lading as between the parties. Mr. Mnyele submitted further that, as long as a reference is made to a document to support an argument, in a preliminary objection, that preliminary objection is no longer a matter of pure law, making reference to the case of Mukisa Biscuits Manufacturing Co. Ltd. V. West End Distributors Ltd. [1969] E.A 696. Arguing further, Mr. Mnyele submitted that, there is no doubt that, the facts that are in the bill of lading are yet to be admitted and ascertained, and further that, 5 a contract like the bill of lading cannot be the basis of raising a preliminary point of law because a bill of lading in itself is not a law. With regard to the issue of limitation, it is Mr. Mnyele's submission that, the limitation of time in the bill of lading is inconsequential, in view of the fact that, there is a statute that regulates matter of limitation and thus, parties cannot contract out or contrary to the statute. He further argued that, it is the law of limitation that provides for limitation of actions. Therefore, since this suit is based on breach of contract of carriage, and according to the terms of part one of the first schedule to the Law of Limitation Act, the limitation is six years. Similarly, it is the submission of Mr. Mnyele that, Hague Rules cannot apply because they are not part of our laws, and there is no evidence of domestication of the said Rules. Under such circumstances, he therefore prays that the preliminary objection be dismissed with costs. From the outset I should state that, the two preliminary points of objection, one on jurisdiction, and the other on limitation, hinges on the bill of lading which is annexed as DI to the Written Statement of Defence. Having gone through Mr. Kesaria's submissions, I have noted that, his submission on the two points is an elaboration of what would appear to be issues to be raised in evidence. They are based on matters of fact. This is clearly a case where evidence is required to prove the circumstances as to whether annex DI to the Written Statement of Defence is one and the same document as annex QF3 to the plaint (as submitted), or whether the plaintiff conveniently omitted to annex the terms and the conditions of the bill of lading etc. In the celebrated case 6 of Mukisa Biscuits Manufacturing Co. Ltd. V. West End Distributors Ltd. (supra), Law, J .A had this to say: "So far as I aware, a preliminary objection consists o f a point o f law which has been pleaded, or which arises by dear implication out o f pleadings, and if argued as a preliminary point may dispose o f the suit. Examples are an objection to the jurisdiction o f the court or a plea o f limitation or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration A preliminary objection raises a pure point of law, which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. Not only that, a preliminary objection if successful should be capable of disposing the matter preliminarily without the court having to ascertain the fact elsewhere, apart from looking at the pleadings. That being the parameters within which preliminary objections should be taken. It is thus my considered opinion that, these two points of preliminary objection raised by Mr. Kesaria herein cannot really qualify for a preliminary objection. As rightly submitted by counsel for the plaintiff, such arguments needs to be proved by evidence, because, as long as a reference is made to the bill of lading which is yet to be ascertained, then the points raised are no longer matters of pure law. It was held by the court in the case Bi Kubwa Issa Ali V. Sultan Mohamed Zahran [1997] TLR 295), that, a preliminary objection based on an allegation itself requiring to be proved with evidence cannot be sustained. 7 Therefore, only matters raising a point of law which could dispose of the suit summarily ought to be considered by the court when dealing with a preliminary objection. All the above considered, it is my view that, the issue whether the terms contained in annexure DI are one and the same terms as those contained in annexure QF3, can best be resolved upon production of evidence in a trial and not by way of preliminary objection. And since both the objections arises from the disputed bill of lading, it is best the issues be resolved at the trial. As for the issue of the suit being instituted against the second defendant who is a disclosed agent of the first defendant, this court finds, and as correctly submitted by counsel for the defendants, that, the suit against the second defendant cannot be maintained and therefore, it is struck out with costs. It is ordered accordingly. ...... ...................... A.E BUKUKU JUDGE 05 DECEMBER, 2012 8 Ruling delivered this 05th day of December, in the presence of Mr. D. Kesaria Learned Advocate for the Defendants, also holding brief of Mr. Mnyele Learned Advocate for the Plaintiff. .................. A.E BUKUKU JUDGE 05 DECEMBER, 2012 Word Count: 1,434 9