registered trustee of cornelius christian aid to churches and the needy foundation vs equity bank tanzania limited 2022 tzhclandd 12722 30 november 2022

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (LAND DIVISION) AT PAR ES SALAAM LAND CASE NO.241 OF 2022 REGISTERED TRUSTEES OF CORNELIUS CHRISTIAN AID TO CHURCHES AND THE NEEDY FOUNDATION.................................................................. PLAINTIFF VERSUS EQUITY BANKfTANZANIA) LIMITED...... ...................... DEFENDANT RULING Date of Last Order: 09.11.2022 Date ofRuling: 30.11.2022 T.N. MWENEGOHAJ The center of the dispute between the parties herein arises out of a breach of a lease agreement, entered by the two on the 1st June, 2013. The plaintiff claims that, the defendant has gone against the terms of the said agreement, hence she is entitled to payments as arreas of rent to the tune of 344, 948, 750/=. And further payments of Tshs 68,989,750/= as advance from 1st December, 2022 until the judgment, decoration and handing over of the premises to the plaintiff. i The defendant is against the case and has filed a preliminary objection on point of law that, the Court has no jurisdiction, owing to the existence of an arbitration clause in their lease agreement. Advocate Eugenia Mark Shayo for the defendant has insisted in her written submissions that, according to clause 9 of the lease agreement, it was agreed that, if the dispute arises concerning the said agreement, the same shall be reffered to arbitration. Therefore, the plaintiff has defied the arbitration clause by filing the instant case. This is contrary to section 7(1) of the Civil Procedure Code, Cap 33 R.E 2019. That, since the parties have expressed agreed on the forum in case the dispute arise, the same should be respected as stated in Scova Engineering S.P.A versus Mtibwa Sugar Estates Limited and others, Civil Appeal No. 133 of 2017, Court of Appeal of Tanzania (unreported) In reply, Advocate Daniel Haule Ngudungi for the plaintiff maintained that, the objection is misplaced as the defendant has already taken steps in the suit by filling a written statement of defense. Hence, she has submitted herself to the proceedings. She cannot claim for an arbitration referral. Above all, the provision of section 15 of Cap 15 of the Laws, do not ouster the jurisdiction of Courts as the same is a creature of statutes and it can only be ousted by statute. Therefore, the Scova Engineering S.P.A, case (supra), is distinguishable in the circumstances at hand. I have carefully considered the competing arguments of counsel for the parties. I gather that the kernel of the matter is whether the Court has jurisdiction to entertain the matter at hand or the presence of the arbitration clause obliges this Court to refer parties to arbitration. 2 There is no dispute that, the parties agreed to submit themselves to arbitration shall the dispute arise with regard to their lease agreement, (see clause 9 of the lease agreement). The plaintiff's advocate on his part has contended, since the defendant has filed a written statement of defense, she cannot invoke the applicability of the submissions clause. But the defendant counsel has insisted that the arbitration clause should be respected. I may agree with what the plaintiff counsel is saying, but if I do so, I will be defeating the intention of parties to include the arbitration clause in the said agreement between the parties. It is in my opinion that, the parties intended to benefits associated with such clause, including reducing costs and time involved in settling their dispute at a place and before a person of their choice. As it was decided in an English case of Heyman v. Darwins Ltd. (1942) AC 356 at page 375, that;- "I venture to think that not enough attention has been directed to the true nature and function of an arbitration clause in a contract. It is quite distinct from other clauses. The other clauses set out the obligations which the parties undertake towards each other but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement of both parties that if any dispute arises with regard to the obligation which the one party has undertaken to the other, such dispute shall be settled by a tribunal of their own constitution As well explained in the case above quoted, an arbitration clause forms a separate agreement which the parties have to obey. At this point the 3 plaintiff claims the lease agreement was breached, but she by disobeying the arbitration clause, she is also breaching another agreement, enforceable between her and the defendant. It is settled that, who ever comes to equity must come with clean hands. The plaintiff therefore, must be willing and able to carryout her own obligations as agreed. Having so observed, I find this objection by the defendant to have merits M. Mwenegoha. Judge 30/11/2022 4