PETER TE LINTEL AND SOLANDRA LTD MISC

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION)

IN THE SUB REGISTRY OF ARUSHA MISC. COMMERCIAL CAUSE NO. 13901 OF 2024 IN THE MATTER OF THE COMPANIES ACT CAP. 212 RE 2002

AND

IN THE MATTER OF SOLANDRA LIMITED

AND

IN THE MATTER OF A PETITION FOR UNFAIR PREJUDICE UNDER SECTION 233(1) AND 3(a), (b) & (c) OF THE COMPANIES ACT, NO. 12 OF 2002 BY PETER TE LINTEL HERKET……………………………………..1ST PETITIONER MARIA THERESE MARTINA WILSON.………..……………. 2ND PETITIONER AND SOLANDRA LIMITED…………………….……………………..1ST RESPONDENT CORNELIS GERADRDUS VAES………………………………2ND RESPONDENT PETRONELLA JOSEPHINA KNORR ………….…………. 3RD RESPONDENT INGRID CATHARINA MATHEA VAES………….……………4TH RESPONDENT MAYKE HENDRINA JOHANNA VAES………….…………….5TH RESPONDENT 1

RULING Date of last order: 30/1/2025 Date of Ruling: 21/02/2025 Hon. Gonzi, J. This Petition was brought under section 233 (1) and (3) of the Companies Act, Cap.212 [R.E.2002] whereby the Petitioners prayed for Relief(s) and Order(s) as follows: a) An Order and declaration that the affairs of the 1st Respondent are being conducted in a manner that is unfairly prejudicial to the interests of both the Petitioners. b) An Order compelling, the Petitioners and Respondents to hold statutory meetings in accordance with the Memorandum and Articles of Association of the 1st Respondent and grant the 1st Petitioner with a Casting Vote in all meetings of the 1st Respondent including the Board of Directors Meetings, Extraordinary, Annual General Meetings, c) An order compelling the 2nd, 3rd, 4th and 5th Respondent to submit the Petitioners the required documentation for the online updating of the 1st Respondents Statutory 2 Annual Returns in compliance with the requirements of the Business Licencing and Regulatory Authority (BRELA). d) An Order appointing an Independent Auditor/Independent Audit Firm to investigate the financial affairs of the 1st Respondent for purposes of establishing precise misappropriation and misuse of funds, et cetra and order the 2nd and 3rd Respondents to make good all losses as a result of any misappropriation and misuse of finances and assets. e) An Order the 2nd

and 3rdRespondents to handover to the Petitioners management control of the company and make a full disclosure of the entire status of affairs of the 1st Respondent in order to effectively conduct the future affairs of 1st Respondent. f) An Order the 2nd and 3rd Respondents to handover to the Petitioners any and all financial records of the company and make a full disclosure of any and all financial transactions of or in relation to the 1st Respondent in order to effectively conduct the affairs of 1st Respondent. g) An Order for a blanket Indemnity be granted to the Petitioners against any and all liabilities of the 1st Respondent from the date of its registration to date the 2nd and 3rdRespondent’shand over management control of the 1st Respondent to the Petitioners. H. An Order that 3 the 3rd Respondent be removed as managing Director and further2nd and 3rdRespondents be permanently disqualified as Directors of the 1st Respondent in order to effectively conduct the affairs of 1st Respondent. h) An Order permanently restraining the 2nd, 3rd, 4th and 5th Respondents from taking part of the management and affairs of the Company i) An Order that the 2nd and 3rd Respondents, their workmen, employees or any person claiming interest or directives from the 2nd and 3rdRespondent’shandover the company premises trading as Tumbili Lodge including the Directors residence/housing situate

at Tumbili Lodge, Farm No. 176/1/1/2/1 Olasiti Village, Arusha, 11 Dorobo Road,Postal Code 23119, Tanzania in order to effectively conduct the affairs of 1st Respondent. j) An Order authorizing the Petitioners to institute civil proceedings in their name and on behalf of the 1st Respondent against any misappropriation and misuse of 1st Respondents finances, damages, and any other reliefs as may deem fit and just. k) Costs of the Petition be borne by the 2nd, 3rd, 4th and 5th Respondents. l) Any other Relief(s) this Honourable Court may, in the circumstances deem fit and just to grant 4 The Petition was supported by Affidavit verifying Petition Sworn by Peter Te Lintel Hekkert the 1st Petitioner a person also duly authorized to swear on behalf of the 2nd Petitioner, under the power of attorney. The Answer to the Petition was not verified by way of an affidavit. I will make reference to the contents of the Petition in the course of the Ruling. On 19/11/2024 the Court ordered the matter be heard by way of written submissions and provided the schedule to that effect. The petitioners enjoyed the service of Mr. Meinrad Menini D’souza, Learned Advocate whilst the Respondents enjoyed the service of Messrs. Sabato Ngogo and Patrick Nyangusi, Learned advocates. I thank the Learned Counsel for their submissions. In his submissions Mr. D’Souza, Learned Advocate, adopted the contents of the

Petition and the Affidavit verifying the Petition Sworn by Peter Te Lintel Hekkert as well as contents of the reply to the Amended Joint Answer to Petition together with its attachments. Before submitting on the merit, Mr. Dsouza pointed out that the present Petition is supported by an Affidavit verifying the petition but in contrast the Respondents’ Amended Joint Reply to the Petition is not supported by an 5 Affidavit verifying the same. He contended that, in other words, the Respondents have not adduced any evidence and that their pleadings are bare. He urged the Court to order that the Respondents’ Amended Joint Reply to the Petition is unproven. He Cited the case of Mohamed Abdillah Nur & Others vs Hamad Masauni& Others [2024] TZCA 129 (26 February 2024) where the Court of Appeal stated thus: “I subscribe to the rule therein stated that it is the usual judicial practice that applications of this nature are determined through affidavits, the basis of the Judge's findings is on the evidence on record through the affidavit verifying petition and the affidavit verifying answer to the petition. “ Mr. Dsouza submitted further that since in applications there is no requirement to hear the matter orally and call in witnesses, thus once a petition is verified by an affidavit, it suffices that no further evidence is required. He referred the Court to the case of RAJIV BHARAT

BHESANIA AND ANOTHER V. HARDEEP KAUR CHAGGAR AND ANOTHER, [2023] TZHCComD 266 and MOHAMED ABDILLAH NUR & OTHERS VS HAMAD MASAUNI & OTHERS [2024] TZCA 129 (Tanzlii). 6 Mr. Dsouza submitted that the Petition was filed in mid-June 2024, where the Parties’ counsel made several appearances in Court for orders. The Respondents’ learned Counsel prayed for amendments of the Joint Reply to the Petition at least twice until when the Court ordered the petition to be disposed by way of written submission. However, at no point in time have the Respondents craved for leave to file an Affidavit to verify the Respondents Amended Joint Reply to the Petition, thus they were never denied the opportunity to file an Affidavit verifying their pleadings. He submitted further that it is trite law that Respondents ought to file Verifying affidavit to prove their allegations. He relied on the case EAST AFRICAN CABLES (T) LIMITED V. SPENCON SERVICES LIMITED [2016] TZHCComD 2077 (Tanzlii). Mr. D’Souza, drew the Court’s attention to the fact that this Honorable Court made a Ruling on 27th September 2024 through Hon. U.J. Agatho J. (as he then was) that the Respondents be allowed to append documents to their Amended Joint Reply, however, the Respondents went beyond the scope allowed and introduced allegations of fraud. He prayed for the allegations of fraud at Paragraph 10 of the Amended Joint Reply to

be accordingly stuck out. 7 On the other hand, Mr. Ngogo and Mr. Nyangusi, Learned Advocates, submitted that the Court of Appeal case of Mohamed Abdillah Nur & 3 others vs Hamad Masauni & 2 others (supra) is distinguishable from the current one as in the said case the complainant was complaining that the trial Court when determining an Application for derivative action under section 234 of the Companies Act, Cap 212 neither called for witnesses to prove their case nor framed issues as required by the Civil Procedure Code Cap 33 R:E 2019. He submitted further that when the Court of appeal was deliberating on the said issue, it held that, “the application of this nature” could be determined through affidavit. The Learned Counsel for the Respondents were of the view that the Court of Appeal did not make a general conclusion that when a reply to the petition or answer to the petition, as the case may be, does not attach an affidavit verifying the facts contained in that reply or answer to the petition, the trial Court is excluded from relying on those facts in the course of hearing. The Learned Counsel for the Respondent submitted further that the case of East African Cables (T) Limited vs Spencon Services Limited, 8 (supra) is quite distinguishable from the current case as in that case it was an application for attachment before judgment under Order XLIII Rule 2 of the Civil

Procedure Code Cap 33 R:E 2019 which requires that, every application to the Court should be by way of Chamber Summons supported by an Affidavit. They submitted further that the provision of Rule 52 (1) the High Court (Commercial Division Procedure) Rules 2012 is distinct from rule 48 which requires for a witness statement in proceedings instituted by Plaint. In their view Rule 52 is for matters commenced by way of originating summons and any application made by chamber summons where evidence shall be given by affidavit unless the Court direct otherwise. They argued that rule 48 does not provide for requirement of witness statement in proceedings commenced by a Plaint, but rather the said rule provides for power of the Court to determine the manner in which evidence is to be given at any trial. The Learned Counsel for the Respondents submitted that all applications instituted under the Companies Act, are not instituted by way of originating summons rather by way of “Petition”, as provided under section 233 (1) of the Companies Act. They argued that the Companies Act does 9 not make mandatory requirement for a verifying affidavit to the Petition and if that is the case, the affidavit verifying facts cannot preclude this Court from taking into consideration the fact verified to be true in the reply to the petition or petition itself. The Learned Counsel for the Respondents

submitted that the issue of a verifying affidavit was supposed to be argued earlier, and alternatively, they prayed that if this Court finds it a crucial legal issue, the Court should allow respondents to file an affidavit verifying their joint amended reply to the petition so that justice can be done and since the decision of this Court has not yet been delivered, they prayed for amendment under Rule 24 of the High Court (Commercial Division Procedure) Rules 2012 for the purpose of correcting such error and achieve Justice between the parties. After hearing submissions regarding the issue of absence of the verifying affidavit for the Respondents’ Answer to the Petition (which they called Amended Joint Reply to the Petition), the issue ought to be addressed first. I have noted that the issue necessity of a verifying affidavit to the petition or an answer to the petition or the reply thereto, has been canvassed in various cases including the decision of this Court in Harpal Singh Virdee 10 v Rajinder Kaur Bidi & Banson Entreprises Limited [2024] TZHCCoMD 201 which made referred to the case of Mohamed Abdillah Nur & Others vs Hamad Masaiini & Others (supra). The Court of Appeal, as per Hon. Mdemu,J.A., stated that: "It is clear from the quoted part of the proceedings in the trial Court above that, parties were given right to be heard through filing their written submissions.

However, that notwithstanding, what calls for our attention at this stage to resolve is whether, this being not a normal suit, the trial Court was justified to dispose the petition basing on the grounds in the petition, answer to the petition, the affidavit verifying the petition and affidavit verifying answer to the petition. Coming to this end, Mr. Kiritta, as said, dwelt on failure to frame issues to guide written submissions and reliance on written submissions of which the current jurisprudence does not recognize it to be evidence. Going by this understanding, there is no reference supplied to us by the learned counsel to the effect that in petitions of this nature, issues must be framed to guide parties prior to filing written submissions. By this argument therefore, there is concession by Mr. Kirita and thus there is a consensus, which in our view is a usual practice that, applications of 11 this nature are determined through affidavits… In the Commercial Division of the High Court, for instance, rule 52 (1) of the High Court (Commercial Division) Procedure Rules, 2012 GN No. 250 of 2012 require evidence be by way of affidavit..In the instant application for that matter, the affidavit verifying petition and the affidavit verifying answer to the petition are the evidence which the learned trial judge rightly relied on in reaching at his findings...... This

therefore concludes the other complaint that, the basis of the trial judge's findings was not on written submissions but rather the evidence on record through the affidavit verifying petition and the affidavit verifying answer to the petition.” [Underlined supplied for emphasis] In Harpal Singh Virdee vs Rajinder Birdi & Banson Enterprises Ltd (Misc. Commercial Cause No. 42 of 2024) [2024] TZHCComD 201 (23 August 2024), following the above stated decision of the Court of Appeal, this Court held that: “In the case at hand the Answer to the amended petition and the Cross Petition do not have accompanying verifying affidavits. It is the rule, which is settled and sanctioned by the Court of Appeal of Tanzania as it can be seen in Mohamed 12 Abdillah Nur & Others vs Hamad Masauni & Others (Civil Appeal No. 630 of 2023) [2024] TZCA 129 (26 February 2024) that in determination of petitions under the Companies Act, it is the affidavit verifying the Petition or the Cross Petition, the affidavit verifying an Answer to the Petition or an affidavit verifying the Reply to Answer to the Petition that supplies the evidence in the Petition which the trial Judge ought to rely upon in reaching at his findings. Therefore, it is an affidavit verifying the petition that converts the statements therein into evidence… On my part, I find that the practice requiring petitions to be accompanied by

verifying affidavits has a force of law since there is a judicial consensus, which is the usual judicial practice that applications of this nature are determined through the evidence contained in the petitions which is conveyed through their verifying affidavits. Therefore, petitions must be accompanied with their verifying affidavits so as to carry the requisite evidence for their determination.” In the case at hand the “Joint Amended Reply to the Petition” does not have accompanying verifying affidavits. A verifying affidavit solely confirms the truthfulness of the statements contained in the petition thereby giving 13 the same evidential value. An affidavit verifying the petition barely introduces any independent piece of evidence itself. Its focus is solely on what was stated in the Petition. The affidavit verifying the petition must be sworn by the Petitioners or some of the petitioners. It is the general rule that an Affidavit is a substitute for oral evidence. This is the rule in the case of Uganda vs Commissioner of Prisons, Exparte Matovu (1966) E.A.514 at page 520. Without a verifying affidavit, a petition, its answer or reply thereto, lacks evidence on which the Court can rely for factual determination. I therefore agree with what was argued by Mr. D’SOUZA, learned Advocate for the Petitioners and I find the Respondent's “Joint Amended Reply to the Petition” as being

mere statements with no evidential value for not being accompanied with the requisite verifying affidavits. This anomaly was raised in the submissions in chief and the Respondents had a room to respond thereto in their reply submissions where they canvassed it adequately. The question to be answered is what is the way forward? Mr. Ngogo, Learned Advocate pleaded with the Court to allow amendment to the “Joint Amended Reply to the Petition” so as to file the affidavit verifying the petition. Faced with a similar issue in the case of Harpal Singh Virdee (Supra) this Court held that: 14 “In this case, while the pleadings are complete and the petition is ripe for hearing, the Respondent has not yet filed verifying affidavits to the Answer to the Petition and the Cross Petition. In effect there is no evidence whatsoever before the Court upon which the Respondent could make submissions upon… On my part, I am settled that failure to file an affidavit or counter affidavit would not exclude a party from proceedings nor would it be fatal to his case. It would only imply that he has admitted the factual allegations made by the other side with nothing to say on his part. If the Respondent in this case fails to file affidavits verifying the Answer to Amended Petition and the Cross Petition, the two documents will thereby be rendered mere papers with no evidential value and the Respondent

will be debarred from relying thereon in making his submissions or in challenging any factual arguments which might be raised by the Petitioner….As the hearing of counsel's submissions has not yet been done, in my view, the Petitioner will not be prejudiced, save as to costs, if the Respondent is allowed to present affidavits verifying the Answer to the Amended Petition and the Cross Petition. (Underlining supplied) 15 The circumstances of the case above are distinguishable from the case at hand as in this case the matter was raised during the hearing stage. The petitioner had already filed their written submissions in chief, hence thereby making its arguments in the hearing of the application at hand. In making the submissions which tantamount to oral hearing, the Petitioners were entitled to rely on the evidence from both sides already present in Court. If the Respondents are allowed to amend their Joint Amended Reply to the Petition”, after the other side has already been heard on the merits of the case based on the earlier on present evidence, it will be very unfair to the Petitioner. The goal posts cannot be shifted by one side after the game has started. The rules of the game cannot be changed mid-way in the course of the game. I decline the prayer by Mr. Ngogo, Learned Advocate. As it is, there is no evidence in Court by the Respondents controverting the

factual allegations contained in the Petition and its verifying affidavit. The petition therefore proceeds unopposed, factually, through it can be legally challenged by the Respondents. Submitting on the merits of the petition, Mr. D’Souza, Learned Advocate for the Petitioners, submitted that the Petition is made under Section 233(1) & 3(a), (b) and (c) of the Companies Act, No. 12 of 2002. He 16 added that the Petitioners have established that they have an interest in the affairs of the Company from the time it was registered and are named members therein thus their Membership has not ceased as per Exhibit SOL- 2 Collectively. He cited the case of JITESH JAYANTILAL LADWA V. BHAVESH CHANDULAL LADWA AND OTHERS, Misc. Civil Application No. 148 of 2022, HCTCD at Dar es Salaam at Page 19, Ismail J, held that: “In such a case, therefore, the petitioner must establish that he has interest in the affairs of the company, and that there should be a breach of his rights under the memorandum and articles of association” He further cited Section 24(1) of the Companies Act, Cap 212 of 2002 which provides that: 24(1) ‘The subscribers to the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as a member in its register of members” It was the argument by Mr. D’souza, Learned Advocate, that on the basis of the

foregoing authorities, the Petitioners have the requisite locus to petition. 17 Regarding the claims for unfair prejudice he submitted that in the case DHIRAJLAL WALJI LADWA AND OTHERS V. JITESH JAYANTILAL LADWA AND ANOTHER, [2023] TZHCComD 376, Hon. D. J.Nangela J. at Page 49 held that: “A Petitioner seeking remedy under that provision, is duty bound to establish four elements to the satisfaction of the Court, that: (1) the conduct of the company’s affairs; (2) has prejudiced; (3) unfairly; (4) the petitioner’s interest as a member of the company. [Emphasis added] He submitted further that, to establish the elements supra, the test applied is objective and not subjective as it was elucidated in the case of JITESH JAYANTILAL LADWA V. BHAVESH CHANDULAL LADWA AND OTHERS (Misc.Civil Application No. 148 of 2022, HCTCD). Mr. D’souza submitted on the first element on “the conduct of the Company Affairs” referring to Paragraphs 7, 9, 10, 11 and 12 of the Petitioners’ Petition that there are multitude of ill-conducts which were conducted by the 2nd and 3rd Respondents who are the resident Directors violating, inter alia, the Memorandum and Articles of Association (‘SOL-2 18 Collectively’). He submitted that the 2nd and 3rd Respondents being in the control of the affairs of the 1st Respondent have not acted collectively as Directors but rather arbitrarily in the affairs of the 1st

Respondent and this has prejudiced the Petitioners herein. He relied on the case of RAJIV BHARAT BHESANIA AND ANOTHER V. HARDEEP KAUR CHAGGAR AND ANOTHER [2023] TZHCComD 262 at Page 32 and DHIRAJLAL WALJI LADWA AND OTHERS V. JITESH JAYANTILAL LADWA AND ANOTHER (Supra) at Page 50. On the second element he submitted that the term ‘prejudicial’ was elaborated in DHIRAJLAL WALJI LADWA AND OTHERS V. JITESH JAYANTILAL LADWA AND ANOTHER (Supra), at Page 55 where the Court elaborated it that it encompasses a broad meaning which may be financial damage to the value of the petitioner’s shares, also it might be disregards of the rights of the members without any financial consequence and accountability for that matter. He submitted that the 2nd and 3rd Respondents have excluded the Petitioners from accessing the financial information of the 1st Respondent Company. He referred the Court to Annexure SOL-7 which portrays that due 19 to poor management and lack of proper financial controls there is a financial loss in the business and it is worth noting that SOL 7 was signed and authenticated by the 2nd Respondent in person and the Respondents did not Call the Shares or participate in the AGM as they were happy with the 1st Petitioner investment as a result Tumbili Lodge was established, however are in cognizance of his investment as that will affect the Vaes family shares and with over US$

200,000 not accounted for. On the element of ‘unfairly’, the Learned Counsel for the Petitioner cited the case of DHIRAJLAL WALJI LADWA AND OTHERS V. JITESH JAYANTILAL LADWA AND ANOTHER (supra) at page 57, the Court elaborated that the concept of fairness must be viewed in the context of commercial relationship (in contrast to a family relationship) governed by inter alia the Articles of Association. He submitted that Notwithstanding Paragraphs 7, 9, 10, 11 and 12 of the Petition the MEMARTS of the 1st Respondent have been violated by the 2nd and 3rd Respondents as they excluded the Petitioners’ involvement in the business. He further argued that according to Paragraph 9 of the Petition, the 2nd and 3rd Respondents, being the Resident Directors, have failed to 20 conduct Annual General Meetings contrary to the company’s constitution as per the MEMARTS (Article 42) and the 3rd Respondent appointed herself as the Managing Director contrary to Article 98. Further, it was submitted that the Respondents decided to pay themselves salaries/Directors fees without proper Board of Directors meetings or resolutions and this was contrary to Article 90 of the Articles of Association. He further submitted that the 2nd Respondent being bankrupt mislead the insurance companies and covered up having an insurance policy thus the best interests of the company were un-protected. Further, it was

submitted that the 2nd and 3rd Respondents who are responsible for the day-to-day activities of the 1st Respondent, do not want to be held accountable for the finances of the company or that of the 1st Petitioner invested into the company. They referred the Court to annexture SOL-7 at pages 9, 10 and 20. Also it was complained that the Respondents have unilaterally appointed a new auditor because the chosen auditor in SOL-7 exposed the respondents’ misdealing, lack of financial responsibility and integrity. 21 On the last element which is ‘the petitioner’s interest as a member of the company’; it was submitted that as the Petitioners have established through the Petition that they are legitimate members of the 1st Respondent Company, the affairs of the 1st Respondent have been conducted in a way which is prejudicial and unfair to the detriment of their interests in the Company. They prayed to adopt the aforesaid arguments It was submitted further that the 2nd and 3rd Respondents, being the resident Directors who are in charge of the day-to-day affairs of the Company, lacked accountability and transparency in the affairs of the 1st Respondent Company. Submitting further, Mr. Dsouza argued that it is required for Directors to act collectively. He cited the case of MOROGORO HUNTING SAFARIS LIMITED VS. HAMIMA MOHAMED MAMUNYA, Civil Appeal No. 117 of 2018 CAT at DSM at page 18). He

argued that to be able to do so, the Petitioners ought to be supplied with the requisite financial records and information that the Respondents are desperate to hide. It was submitted that another part of the Petitioners’ grievance is lack of legal compliance and the manner that the 1st Respondent is being run by 22 the 2nd and 3rd Respondents it was argued that the 2nd and 3rd Respondents use the company’s generated finances for their personal gains at the same time claiming their personal expenses as investment/contribution. It was thus argued that without a Court Order there is no way the Respondents will provide full and complete books of accounts; hence an investigative audit is desired. It was submitted that the very nature of Petitions under the Company Act Cap. 212 is simple in nature to wit, if the said Act requires a certain act be done such as holding statutory meetings, the Respondents have to show such meeting were held and, in a manner, prescribed. Mr. Sabato Ngogo, Learned Advocate, assisted by Mr. Patrick Nyangusi, Learned Advocates, submitted in reply on the merits of the petition. They submitted petition for unfair prejudice stand out as an important legal weapon in the hands of those shareholders who for some reasons might lack sufficient power or influence over decisions touching the affairs of the Company or crucial matters affecting the business of their

body Corporate. This can include abuse of powers, breaching mandatory Memorandum and Articles of Association and excluding shareholders from the management or decision-making over the affairs company where there 23 is expectation of being involved. Unfair prejudice principle is not for members of the company who are holding majority shareholders and who are holding managerial position of the company like the Directors who are entrusted with the management of the company. And further to that, under the principle of “Equity”, it dictates that he who comes to equity must come with a clean hand. It was submitted for the Respondents that for a petitioner to succeed in petition for unfair prejudice, he must adduce facts and evidence to the satisfaction of the Court that, the company’s affairs are being conducted in a manner which is unfairly prejudicial to the interest of its members generally or of some part of its members, and that the actual or proposed act or omission of the company is or would be so prejudicial. It was submitted that all what was demanded by the Petitioners in their demanded letter annexed as annexure Sol -3 collectively was replied and respondent by the Respondents’ demand letter also annexed in their petition as Sol- 3 and further requested to hold a meeting to deliberate on the issues which were demanded save for issues which were not to be addressed by

specific authorities like the issue of non-compliance with BRELA 24 (filing annual return,) Tax compliance from TRA and the issue of class A working permit. It was submitted that the Petitioners rushed to this Court before they could use their internal mechanism of resolving issues pertaining to their concern which they had demanded whereby instead of conducting the proposed meeting, on 12th June 2024, the petitioners rushed to this Court claiming for an order of unfair prejudice. It was submitted that Petitioners did not produce any evidence to this Court showing that, as it was suggested by the Respondent, they tried to conduct internal meeting to address the issue and at the end of the day it ended in futile. It was further submitted that the Petitioners being the Majority shareholders and Directors of the 1st Respondent company are directly involved in the management of the 1st Respondent’s affairs, according the 1st Respondent’s Memorandum and Articles of Association attached to the petition as Sol-2 collectively. It was submitted that the petitioners have equal right to vote and decide affairs of the company without their interest being compromised. It was submitted that there is no evidence adduced to the extent that there is any decision which has been passed by the Respondents 25 without involving them or in the course of passing the decision, Petitioners were excluded

from voting or they were prevented from voting. It was submitted that the act of the Petitioners rushing to the Court to claim for unfair prejudice while they are part of the management of the 1st Respondent goes contrary to the principle of “Directing”, as it was well elaborated in the case of Linda Samwel Machangu & another vs Hotel Continental Limited, Winding up Commercial Cause No. 38 of 2023, High Court Commercial Division at Dar es Salaam (un reported) attached on skeleton submission of the petitioners at page 66 – 68. The Respondents’ Counsel submitted that whereas under paragraphs 10 and 11 of the petition together with the submission by the Counsel for the Petitioners, it has been stated that the Petitioners demanded for issue of annual returns, tax issue, financial records and books of account, on the other side according to Annexure R2 attached to the “Joint amended reply to the petition”, the 1st Petitioner is the only person mandated to update information in ORS system and he has never appointed any other person. It was submitted that there is no evidence from the Petitioner that, they had asked information for filing annual return and Respondents declined to 26 provide that information which includes signing consolidated form and attaching audited financial statement. It was submitted that while the petitioners are alleging that issues of finance are not managed

well, yet according to annexure Sol 7 which the 1st Petitioner signed, at pages 6, 7 13, 14, 15 and 16 his is the finance Director of the 1st Respondent Company. it was reasoned as to how the 1st Petitioner could be one of the top managing team dealing with financial matters of the 1st Respondent and yet again complain and demand to be supplied with financial records which are all incorporated in the said audited financial statement. It was submitted that the claim that Respondents have hidden financial records for the purpose of audit cannot stand. They argued that if annexture SOL 7 was incomplete, the 1st Petitioner could not sign the same as the finance director. On the issue of tax compliance as complained, it was submitted in reply that there is no evidence adduced by the petitioners showing that, the Tanzania Revenue Authority has issued any notice to the 1st Respondent showing that there has been noncompliance of tax or any notice of assessment from the commissioner General of TRA showing that the TRA 27 owes the 1st Respondent a huge amount of tax liability or there has been noncompliance of the tax by the 1st Respondent. On the issue of not having a Class “A” resident permit, it was replied that the issue is not among the issues which amount to violation of the Memorandum and articles of Association of the 1st Respondent, therefore, it cannot be termed as conduct or

act which will be construed to be unfair prejudice of the member. On the issue of not having insurance cover to cover the business of the 1st Respondent, it was submitted in reply that according to the Annexure R9, attached to the “Joint amended reply to the petition” the business of the 1st Respondent is well covered. Further the argument that the 2nd Respondent was declared bankrupt as per Sol- 13 attached to the reply to the joint amended reply to the petition, it was submitted in reply that what was declared bankrupt was the company named Bioshape Holding B.V and not the 2nd Respondent in person. On the issue of non-holding of the company meetings, it was submitted in reply that there are no facts or evidence adduced by the petitioners showing that the Respondents are reluctant in conducting the said meetings. 28 It was submitted the power to call meeting is vested both to the petitioners and respondents. It was reasoned that had it been that those powers had only been vested to the Respondents as per the 1st Respondent’s MEMART or by the law, the petitioners could have a cause to say that the Respondents do not want to call for members’ meetings or board meeting of the 1st Respondent. It was submitted that the 1st Petitioner is the Chairperson of the board according to Sol 2 as provided by Article 77 at page 22. The meeting which was postponed in this year was prompted by

the Sol-3 but the Respondents requested for another date. Instead of preparing for another meeting and deliberate their issues and concerns, the petitioners rushed to this Court to claim for unfair prejudice. It was submitted that since all petitioners an Respondents have equal powers of convening meeting of the 1st Respondent, neither part can blame others. Both parties had a duty to convene a meeting in accordance with Sol- 2 attached to the Petitioner’s Petition. Counsel for the Respondents submitted that in the case of Rajiv Bharat Bhesania & another vs Hardeep Kaur Chaggar & another, the issue involved directors signing a contract showing that there was 29 shareholding in trust with another company without the consent of its members and when the company secretary was demanded to convene members’ meeting of the company, he declined to do so, thus unfair prejudice was established. It was argued that in the present case there are no such facts. As regards the case of Jitesh Jayantilal Ladwa vs Bhavesh Chandulal Ludwa & 5 others, it was submitted that in that case, the interest of minority of shareholder was prejudiced and directors of the company had made several decisions including entering into agreement with another entity for selling of shares without the consent of the petitioner. It was argued that in the case at hand the facts are not similar since there is no any

decision which has been made by the Respondents in exclusion of the petitioners. As regards the case of Dhirajlal Walji Ladwa & 2 others vs Jitesh Jayantilal & another, the directors made a decision of terminating and appointing another Director without the consent of other shareholders and members of the company. It was submitted that this is not the case with regards to the matter at hand 30 With regard to the issue of reliefs, the Respondents submitted that none of the reliefs prayed for is justified by the facts of the present case. In conclusion, the Learned Counsel for the Respondents submitted that according to annexure R2 – R6 attached to the “Joint amended reply to the petition”, it has been resolved that, it is the petitioners and the company secretary who have been dealing unfairly with the affairs of the 1st Respondent including making changes of the 1st Respondent without the consent of other members (1st -5th Respondent). It was submitted that all annexures R2 – R6 were made by the 1st Respondent together with one Pauline Mtui and the Respondents were never been consulted and no meeting was conducted to resolve on the same. By way of rejoinder submissions on the merits, the Petitioners submitted that the mere failure to hold AGMs is sufficient misconduct of affairs of the company, there is no need to inquire about exhaustion of internal remedies as erroneously

suggested. It was also submitted that the entire submissions of the Respondents lack proof in the desired manner, as submitted. Further it was argued that the issue of the insurance is straight forward in that it is not regulated by 31 TIRA and the Respondents lied and made a misleading statement that puts the policy in a questionable state. It was submitted that the Respondents’ failure to provide the Petitioners with the desired information and documentation as of right is the proof needed to establish that there is a huge brick wall that prevents the Petitioners from being informed and well informed of all affairs of the company. The brick wall is created by the Respondents to prevent them from being accountable for the manner they run the business. Mr. Dsouza, Learned Advocate, argued that the Auditor’s Report (SOL-7) should not be taken lightly. He concluded that the Respondents have failed to show good faith, being resident directors in occupation and control of the day-to-day activities of the company. That marked the end of the submissions by the Learned Counsel for both sides. Now, again, in determining the merit of the petition this Court shall proceed on the footing that whereas in law failure to file an affidavit or counter affidavit would not exclude a party from proceedings nor would it be fatal to his case, it would on the other hand imply that he has admitted

the 32 factual allegations made by the other side with nothing to say on his part. Since the Respondents in this case failed to file affidavits verifying their Answer to Petition and up to the stage of conducting the hearing of the case, their Answer to Petition which they called “Joint Amended Reply to Petition”, was thereby rendered mere paper with no evidential value. Annextures R1 to R6 annexed to it face the same fate. The Respondents are accordingly debarred from relying thereon in making their submissions or in challenging any factual arguments raised by the Petitioners. The Respondents’ Counsel in the submissions raised strong arguments but whose basis is the evidence embedded in the “Joint Amended Reply to Petition” which unfortunately remains unverified by an affidavit. The Court can do nothing than simply ignoring such factual arguments which the Respondents themselves chose not to give any evidential value for the purpose of determination of the present petition. It is a sad story, but it is the law. The Respondents guided by their Learned Counsel ought to have known it better. The Court being a Court of law, will abide by the law. The Petition at hand is one for unfair prejudice under the provisions of section 233 of the Companies Act Cap 212 R.E 2002. It is vital for this kind of petitions that the Petitioner must be a member of the company registered 33 as such

under the register of members or a person to whom shares of a former member have been transferred by operation of the law. This was elucidated in the case of Rupesh Kumar Soni Vinod and others (supra). Undoubtedly, the Petitioners herein are members as per Exhibit SOL-2 Collectively. In a case involving an alleged unfair prejudice under section 233 of the Companies Act, the test of such unfairness is an objective one. Section 233 (1) of the Companies Act, Cap.212, R.E 2002 provides “A petition may be brought under section 233 of the Companies Act, Cap.212 R.E 2002 on the grounds that the affairs of the Company are being carried out or have been conducted in a manner that is unfairly prejudicial to the interests of its members generally or of some part of its members (including the least himself) or that ant actual or proposed act or omission of the company (including any act or omission on its behalf) is or would be so prejudicial. If the Court is satisfied that the petition is well founded, it may make such interim or final orders as it sees fit for giving relief in respect of the matters complained of.” 34 In the case of Dhirajlal Walji Ladwa & 2 others v Jitesh Jayantilal Ladwa & another (Supra) as relied by the Petitioners’ Counsel in his submissions, there are legal elements to be established before a petition can be allowed by the Court. As regards the sort of conducts

which may affect the conduct of the company’s affairs, it was stated in Bhavesh Chandulal Ladwa & 3 Others vs. Jitesh Jayantilal Ladwa, Misc. Commercial Cause No.35 of 2020, that the same may include: “All matters that may be brought to the attention of the Board of directors for consideration.” This Court noted that, even “refusal by a company to convene a general meeting” would amount to an act of the company. However, whether it is to be regarded unfair or prejudicial, it will all depend on the circumstances. From that premise, this Court had the following to say regarding what do all that means: It means, therefore, that, actions or omissions in compliance or contravention of the articles of association of a company may or may not constitute the conduct of the company's affairs depending on the precise facts.” At paragraph 9 of the petition, the Petitioners averred that Annual General Meetings are not being conducted by the 2nd and 3rd Respondents 35 who are the resident directors of the 1st Respondent Company and who are responsible for the day to day activities and management of the Company in Tanzania. This has not been denied by the Respondents who have not brought any admissible factual allegations to the contrary. By the 2nd and 3rd Respondents not causing Annual General Meetings of the 1st Respondent Company to be conducted, it amounts to an unfair and prejudicial

conduct of the affairs of the 1st Respondent Company. The petitioners contended that the Respondents excluded them from accessing financial information of the 1st Respondent Company resulting to financial losses due to lack of financial control as evidenced in paragraph 10 (ii) of the Petition. It was argued that these conducts are an affront to the company’s wellbeing and they qualify as conducts worth bringing to the attention of the Board of Directors something which was not done. There is no factual contradictory answer to the petition and thus the averments goes un-contested. I am of the view that transparency in the management of the company’s finances, is a paramount issue in corporate governance. The Petitioners, being members of the 1st Respondent Company, are entitled to full disclosure of the financial information of the 1st Respondent Company wherein they have invested their money by purchasing and holding shares. 36 The 2nd and 3rd Respondent as the resident Directors running the day to day affairs of the 1st respondent company, are duty bound to disclose the true and current financial situation in the company to the Petitioners who are among the members thereof. At paragraph 10(ii) and (iii) of the Petition as verified, the Petitioners averred that they demanded from the 2nd and 3rd Respondents full and unfettered access to all financial records of the Company and

the supporting Documents and that the Petitioners further demanded that all financial records from the Year 2018 be accurately duplicated (photocopied) and presented to the Petitioners. These were to include: all Invoices and Receipts- accounts payable and accounts receivable; all EFD issued Receipts and “Daily ZED Reports”; all Local Purchaser Orders (LPO’s); all Bank Statements; each entry in the Booking system and all records of the Accounting and Financial systems; the 3rd Respondents to supply the Petitioners with full and complete documented and clear statements of Income and Expenditure; Profit and Loss (PNL) account from the Company’s inception to date. All these allegations remain un-contested by the Respondents. I find that not to be a fair manner of running the affairs of the company in relation to rights and expectations of the Petitioners as 37 Members. In Ebrahimi v Westbourne Galleries ([1973] AC 360, 379) Lord Wilberforce held that: the Courts need not look exclusively at a company’s constitution when deciding the nature of the obligations undertaken by its participants. What is important is the giving of effect to the full set of terms and understandings on which it has been agreed the company will operate, be they expressed or implied. Thus, for example, where there is a reasonable expectation that all shareholders will participate in the company’s management,

exclusion from management may be considered unfairly prejudicial, and a remedy will be available under s 241. This was the case in Diligenti v RWMD Operations Kelowna Ltd where the Court concluded that, in such circumstances, there are ‘rights, expectations and obligations inter se’, which are not submerged into the company structure, and these rights are enjoyed by a member as part of his status as a shareholder in the company ... Although [the applicant’s] fellow members may be entitled, as a matter of strict law, to remove him as a director, for them to do so in fact is unjust and inequitable, and 38 is a breach of the equitable rights which he in fact possesses as a member. At paragraphs 10(iv) of the Petition, the Petitioners assert that they demanded the 2nd and 3rd Respondents to grant them full authorized bank access in any and all bank accounts in the name of the 1st Respondent Company. At paragraph 10 (v) of the verified petition show that the Petitioners had demanded from the 2nd and 3rd Respondents a Forensic Audit to be undertaken on all financial affairs of the company. In terms of paragraph 10 (vi) of the Petition, the Petitioners further demanded from the 2nd and 3rd Respondents to provide them with a clear and substantiated statement of Tax Liability of the company since 2019 to date through Annexture SOL-3. In paragraph 10(viii), the Petitioners demanded from

the 2nd and 3rd Respondents to provide a Statement of Payment of Rent (Arrears) from 2019 to date as there is over US$ 76,700 (up to Dec. 2023) rent that is not paid and alleged that it is not clear if the 1st Respondent has paid Withholding Tax on rent. As per Exhibit SOL-3 the Respondents conceded to the presence of unresolved issue regarding the VAT. 39 According to paragraph 11(i) of the Petition, the 1st Petitioner- Peter te Lintel Hekkert, has invested substantially into the 1st Respondent Company, between the years 2019 and 2022 whereby a sum of over United States Dollars Four Hundred Ninety-Seven Thousand (Us$ 497,000.00) was invested by him in the company. That was acknowledged by the 2nd Respondent and, further, the Petitioners have not been supplied with actual evidence of the particulars for payment or the sums of money claimed to be legitimately invested by the 2nd and 3rd Respondents as per Exhibit SOL-6. I have gone through Exhibit SOL-6. I have seen the investments done by the 1st Petitioner, the 2nd Respondent and the 3rd Respondent. However, I have not come across an investment agreement so as to ascertain the extent of 1st Petitioner, the 2nd and 3rd Respondents. In all the foregoing instances, the 2nd and 3rd Respondents as the resident directors were duty bound to act in a more transparent manner towards the Petitioners as members of the company, as regards

the financial affairs of the 1st Respondent Company. The term ‘members’ is more inclusive. One reason is that members can describe owners of companies and other incorporated entities that do not have any share capital. In Jackman v Jackets Enterprises Ltd, 14((1977) 4 BCLR 358), where a shareholder was denied relief for her 40 exclusion from the company’s management as she, had no real expectation of having any management role, Farley J held that: “Those expectations which the Courts will consider are not ‘those that a shareholder has as his individual “wish list”. They must be expectations which could be said to have been (or ought to have been considered as) part of the compact of the shareholders’. In the case at hand, I find that the expectations of the Petitioners to be fully involved in the financial affairs of the company they have enormously invested in are not merely their wish list. They are expectations which can be said to have been (or ought to have been considered as) part of the compact of the shareholders. As regards the element of “prejudice”, and that of “unfairness’, this Court had stated in Bhavesh case (supra) that: “In a Petition as the one at hand, the conduct complained of must be both prejudicial and unfairly so” and, that, “both elements need to be satisfied and, if either is not, the petition will not be well founded.” 41 I have looked at paragraph

10(i) of the Petition wherein the Petitioner averred that they called for an AGM to be held on 21st May 2024 but that that it was postponed by the 2nd, 3rd, 4th, and 5th Respondents and that the 2nd and 3rd Respondents failed to heed to the Petitioners’ demands for full disclosure and access to all company’s affairs. I have gone through Exhibit SOL-4 Collectively. From the Exhibit it is evident that the AGM was postponed due to the Petitioners delivering a demand notice and an intention to sue before even the convening of the meeting, as a result the Respondents saw that there was a need to resolve the demanded issues before involvement of other members of the company. However, it should be noted that holding company’s Annual General Meetings, is a requirement of the law and not a convenience of the management of the company concerned. The Companies Act under section 133 stipulates that: “Every company shall in each year hold a general meeting as is its annual general meeting in addition to any other meetings in that year and shall specify the meetings as such in the notices calling it . At the annual general meeting, the company shall, wherever practicable and subject to the provisions of this Act transact the following business 42 a) to have laid before the members the annual accounts; b) to have laid before the members the directors’ report; c) to have laid before the

members the auditor’s report; d) the appointment of auditors for the period up till the next general meeting at which accounts are laid e) the re-election of any directors retiring and seeking re-election in accordance with any requirement in the company’s articles of Association f) the election or confirmation of appointment of any directors in accordance with any requirement in the company’s articles of association” The argument that the Petitioners are also directors of the 1st Respondent Company, does not absolve the 2nd and 3rd Respondents from the duty to call and hold the General Meetings. It is on record at paragraph 10(i) of the Petition that the Petitioner called for an AGM to be held on 21st May 2024 but that that it was postponed by the 2nd, 3rd, 4th, and 5th Respondents. This shows that at least the Petitioners had called for the General Meeting but which was postponed by the 2nd, 3rd, 4th, and 5th Respondents. Be it as it may, calling for the Annual General Meetings is a shared duty of all Directors of the company. It makes no difference whether 43 the Petitioners are among the Directors or not, the Annual General meeting was not conducted. That is contrary to the law and a prejudice to the affairs of the company in general and the Petitioners as shareholders in particular. It was averred at paragraph 11(ii) of the Petition that the 2nd and 3rd Respondents are the

resident Directors and are hesitant in applying and obtaining a Directors’ Class A Residence Permit for the 1st Petitioner that is issued by the Director of Immigration Services referring to Exhibit SOL-3. I have gone through the said Exhibit where the Respondents denied being responsible. In my view, obtaining of Residence permit and work permit for the 1st Petitioner, much as might be among the roles of the resident Directors of the company, does not fit under unfair prejudice under section 233 of the Companies Act. The petitioner is required to show how the alleged unfair prejudicial conduct has affected him “as a member of the company.” The complaint is therefore misplaced. In paragraph 11(iii) of the petition, there is a complaint that the 2nd and 3rd Respondents, being the resident Directors, are resistant to include the 1st Petitioner as bank co-signatory in all bank accounts in the name of the 1st Respondent. According to Exhibit SOL-3 the Respondents had not 44 refused to make the 1st Petitioner as a co signatory. The complaint is misconceived. In paragraph 11(viii) of the petition, there is an allegation that the 2nd and 3rd Respondents hid the Company’s computers and business and financial records during the time the 1st Petitioner stayed at the Company’s premises i.e. between 11/08/2023 and 18/08/2023, 17/11/2023 and 26/11/2023, 19/02/2024 and 24/02/2024 and

29/04/2024 to date; an act that also prompted the Petitioners to make a formal demand i.e. letter Ref: 01/SOL/MMD/2024 dated 10th May 2024 (“SOL 3”). I have gone through Exhibit SOL 3 in response, the issue of hiding computers was not canvassed by the Respondents’ Reply thus amounting to drawing adverse inference that it is indeed factual that the said computers were hidden by the 2nd and 3rd Respondents. In paragraph 11 (ix) the Petitioner averred that the 2nd and 3rd Respondents have failed to show detailed, accurate and documented financial records signifying all legitimate company’s income and expenses. Further that, the said 2nd and 3rd Respondents only keep financial records in their personal handwritten books. I have gone through Exhibit SOL-8 Collectively, undoubtedly the financial records are handwritten. Owing to the 45 fact that there were computers at the registered office and which are allegedly hidden, raises doubts as to the financial records keeping and management of finances of the 1st Respondent Company by the 2nd and 3rd respondent. In paragraph 11 (xi) (xiv) (xv) (xvi) of the Petition, the petitioners alleged that, there is no clear compliance to the statutory requirements including the payment of taxes with the Tanzania Revenue Department (TRA) and filing Statutory Annual Returns (F.128) with BRELA. Further, that the 2nd and/or 3rd Respondents refused to

sign the Directors’ Contracts as it would result into financial responsibilities and accountability and as a result the said Respondents are treating the Company as their sole family business in exclusion of the Petitioners as per Exhibit “SOL-9 Collectively”. I find that since the non-compliances complained of are statutory requirements hence mandatory, the Respondents by failing to do so, have prejudiced both the Petitioners shareholders and the Company itself. The petitioners averred under paragraphs 13 and 14 of the Petition that, the Directors and Members are at a deadlock and no proper management and decisions can be undertaken and that there exist clear hostilities. I have gone through Exhibit SOL-3 collectively and SOL-11 46 Collectively. It is undisputed that there is a hostility between the Petitioners and the Respondents resulting into difficulty in conducting of the affairs of the 1st Respondent Company hence unfairly prejudicial to both sides, the Petitioners and the Respondents. It is my considered view and thus my finding that the conducts complained of by the Petitioners herein constitute acts that are unfairly prejudicial to the company, the Petitioners and to some extent the Respondents. The petition is meritorious. The final consideration is what reliefs this Court should grant in the circumstances. As to the appropriate remedies, under section 233(1) of

the Companies Act, the Court has broader powers to grant the suitable remedies in respect of the matters complained of. If the Court is satisfied that the petition is well founded, it may make such interim or final order as it sees fit for giving relief “in respect of the matters complained of”. Section 233 (3) and (4) provide: 233:- (3) Without prejudice to the generality of subsection (1), the Court's order may: 47 (a) regulate the conduct of the company's affairs in the future, (b) Require the company to refrain from doing or continuing an act complained of by the petitioner or to do an act which the petitioner has complained it has omitted to do, (c) authorize civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the Court may direct, (d) Provide for the purchase of the shares of any members of the company by other members of the company or by the company and, in the case of a purchase by the company, for the reduction accordingly of the company's capital, or otherwise. (4) If an order under this section requires the company not to make any, or any specified, alteration in the memorandum or articles, the company does not then have power without leave of the Court to make any such alteration in breach of that requirement. In this Petition, the Petitioner has prayed for the following reliefs: 48 a) An Order and

declaration that the affairs of the 1st Respondent are being conducted in a manner that is unfairly prejudicial to the interests of both the Petitioners. b) An Order compelling, the Petitioners and Respondents to hold statutory meetings in accordance with the Memorandum and Articles of Association of the 1st Respondent and grant the 1st Petitioner with a Casting Vote in all meetings of the 1st Respondent including the Board of Directors Meetings, Extraordinary, Annual General Meetings, c) An order compelling the 2nd, 3rd, 4th and 5th Respondent to submit the Petitioners the required documentation for the online updating of the 1st Respondents Statutory Annual Returns in compliance with the requirements of the Business Licencing and Regulatory Authority (BRELA). d) An Order appointing an Independent Auditor/Independent Audit Firm to investigate the financial affairs of the 1st Respondent for purposes of establishing precise misappropriation and misuse of funds, et cetra and order the 2nd and 3rd Respondents to make good all losses as a result of any misappropriation and misuse of finances and assets. 49 e) An Order the 2nd and 3rd Respondents to handover to the Petitioners management control of the company and make a full disclosure of the entire status of affairs of the 1st Respondent in order to effectively conduct the future affairs of 1st Respondent. f) An Order the 2nd and

3rd Respondents to handover to the Petitioners any and all financial records of the company and make a full disclosure of any and all financial transactions of or in relation to the 1st Respondent in order to effectively conduct the affairs of 1st Respondent. g) An Order for a blanket Indemnity be granted to the Petitioners against any and all liabilities of the 1st Respondent from the date of its registration to date the 2nd and 3rdRespondent’shand over management control of the 1st Respondent to the Petitioners. H. An Order that the 3rd Respondent be removed as managing Director and further 2nd and 3rd Respondents be permanently disqualified as Directors of the 1st Respondent in order to effectively conduct the affairs of 1st Respondent. h) An Order permanently restraining the 2nd, 3rd, 4th and 5th Respondents from taking part of the management and affairs of the Company i) An Order that the 2nd and 3rd Respondents, their workmen, employees or any person claiming interest or directives from the 2nd and 3rdRespondent’shandover the 50 company premises trading as Tumbili Lodge including the Directors residence/housing situate at Tumbili Lodge, Farm No. 176/1/1/2/1 Olasiti Village, Arusha, 11 Dorobo Road,Postal Code 23119, Tanzania in order to effectively conduct the affairs of 1st Respondent. j) An Order authorizing the Petitioners to institute civil proceedings in their name

and on behalf of the 1st Respondent against any misappropriation and misuse of 1st Respondents finances, damages, and any other reliefs as may deem fit and just. k) Costs of the Petition be borne by the 2nd, 3rd, 4th and 5th Respondents. l) Any other Relief(s) this Honourable Court may, in the circumstances deem fit and just to grant I have considered the suitability of the prayers contained in the Petition in great detail. I decline to grant prayers (E), (G), (H), (I) and (J) above. I find it not suitable to order that the 2nd and 3rd Respondents handover to the Petitioners management control of the company or removal of the Company’s managing Director, because essentially it is upon the Members to decide who shall manage their company. The Petitioners herein are the majority shareholders in the 1st Respondent Company. They have the power to appoint and remove directors in the company. 51 I decline to grant the prayer giving an Order for a blanket Indemnity to the Petitioners against any and all liabilities of the 1st Respondent from the date of its registration to date the 2nd and 3rd Respondent’s hand over management control of the 1st Respondent to the Petitioners. The prayer is denied because it might have bearing to curtailing rights and liabilities of third parties who are not parties to this case and who might have dealt with the company while it was under the

management of the 2nd and 3rd Respondents. I decline to grant the prayer for an Order permanently restraining the 2nd, 3rd, 4th and 5th Respondents from taking part in the management and affairs of the Company. This is within the mandate of the Members of the Company. Further, to grant that relief would have a counterproductive effect of making the Court’s orders herein granted incapable of being performed. The management and affairs of the Company may include those which this Court orders by its order that they be performed by the Company’s management including the present resident directors who are in office. I decline to grant the restraining order sought that the 2nd and 3rd Respondents, their workmen, employees or any person claiming interest or directives from the 2nd and 3rd Respondent’s should handover the company’s 52 premises trading as Tumbili Lodge, including the Directors’ residence/housing situate at Tumbili Lodge, Farm No. 176/1/1/2/1 Olasiti Village, Arusha. The arrangement or legal basis under which the said company’s premises trading as Tumbili Lodge, including the Directors’ residence/housing are occupied was not litigated in this case. Further, the implementation of that order, if granted, might affect other persons not parties to the present case. At any rate, that matter can be resolved by the meeting of Members of the Company. I have considered the

appropriate reliefs in the circumstances of the present case by taking into account the matters complained of. The nature of my orders shall mainly be guided by section 233(3) (a, (b) and (c) of the Companies Act. I do hereby make the following orders: a) The Court does hereby declare that the affairs of the 1st Respondent Company are conducted in a manner that is unfairly prejudicial to the interests of both Petitioners. b) The Court does hereby make an Order compelling, the Petitioners and Respondents to hold a statutory meeting of members in accordance with the Memorandum and Articles of Association of the 1st Respondent Company within 30 days from the date of this Ruling. 53 c) The Court does hereby make an Order compelling the 2nd, 3rd, 4th and 5th Respondents to immediately submit to the Petitioners the required necessary documentation for the purpose of an online updating of the 1st Respondent’s Statutory Annual Returns in compliance with the requirements of the Registrar of Companies at the Business Licencing and Regulatory Authority (BRELA). d) The Court does hereby make an Order compelling the Directors of the 1st respondent Company, within 30 days of the Ruling, to appoint at the expenses of the 1st Respondent Company, an Independent Auditor to investigate the financial affairs of the 1st Respondent Company and submit his report within 30 days of his being appointed

as such to both the Board of Directors and the Members of the 1st Respondent Company. e) An Order is issued against the 2nd and 3rd Respondents to handover to the appointed Auditor, all the relevant financial and other records of the company and make a full disclosure to him/her of all the financial transactions of or in relation to the 1st Respondent Company from 2019 to the date of his appointment, in order to effectively conduct the audit of 1st Respondent Company. f) The Court does hereby make an Order authorizing the Petitioners to institute civil proceedings, where necessary, in their names and on behalf of the 1st Respondent Company, against any 54 misappropriation and misuse of 1st Respondent’s finances, damages and any other reliefs as may be deemed fit and just. Each party shall bear its own Costs of the Petition. It is so ordered. A. H. GONZI

JUDGE 21/02/2025 Ruling is delivered in Court this 21st day of February, 2025 in the presence of Mr. Meinrad D'souza, Advocate for the Petitioner and Mr. Patrick Nyangusi, Advocate for the Respondent. A. H. GONZI

JUDGE 21/02/2025 55