CIVIL APPEAL NO

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA ( CORAM: KEREFU. J.A.. FIKIRINI. 3.A. AND MASOUD. J J U CIVIL APPEAL NO. 149 OF 2022 SOLOHAGA COMPANY LIMITED................................................ APPELLANT VERSUS THE ATTORNEY GENERAL...................................................... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Commercial Division at Dar es Salaam) (Maqoiqa, 3 Dated the 15th day of December, 2021 in Commercial Case No. 117 of 2018 JUDGMENT OF THE COURT 12» & February, 2025 KEREFU. J.A.: This appeal arises from the judgment and decree of the High Court of Tanzania, Commercial Division at Dar es Salaam (Magoiga, J.) dated 15th December, 2021 in Commercial Case No. 117 of 2018. In that case, the Attorney General, the respondent herein sued Solohaga Company Limited, the appellant, praying for the following reliefs; (a) payment of TZS 458,417,500.00; (b) payment of general damages at the tune of TZS 200,000,000.00; (c) payment of interest at the rate of 20% from the date of judgment to the date of full satisfaction of the decree; and (d) costs of the suit. l The brief material facts of the suit leading to this appeal, as could be discerned from the record of appeal, are not that complex and are, fortunately, to a larger extent not in dispute. It all started on 26th March, 2014 when The UTT Projects and Infrastructure Development PLC (the UTT-PID), a sole owned Government entity executed a loan agreement (exhibit PI) with the appellant for purposes of financing and undertaking a project relating to road opening on the surveyed plots at Msata/Masuguru Villages in Bagamoyo Coastal Region (the project). Pursuant to Clause 7.1 of the said agreement, the UTT-PID was required to finance the said project through a loan at a total cost of TZS 688,137,161.79 with conditions, among others, that the said loan, together with its interest shall be reimbursed to the UTT-PID by the appellant within thirty (30) days from the date of completion of the project. The parties further agreed to engage the services of Times Company Limited, who was appointed by the appellant, as the contractor for the project. That, the UTT-PID shall remit the agreed amount of money in two installments i.e 50% at the time of handing over the site and 50% upon completion of the project. Subsequently, in April, 2014, the UTT-PID advanced a loan to the appellant to the tune of TZS 344,068,580.85 to undertake the said project. However, the appellant defaulted to repay the advanced loan within the agreed period. The said delay led to the accumulation of the principal sum and interest to the tune of TZS 604,415,100.00. Upon issuance of demand notice and several reminder letters, the appellant and the UTT-PID, as a means of settling the matter amicably, agreed to executed a deed of settlement (exhibit P2) which was signed on 25th July, 2017. According to the said deed, the appellant was to repay to the UTT-PID the amount of TZS 500,000,000.00 in discharge of all the outstanding loan balance of TZS 604,415,100.00 in monthly installments starting from 30th May, 2017 to 30th May, 2018. That, in case of default, the accrued interest will be charged at the rate of 15% of every defaulting month. As it turned out, the appellant managed to repay only TZS 254,800,000.00 out of TZS 500,000,000.00 and thus, she again, breached the deed of settlement which resulted into a non-payment of TZS 245,200,000.00 being an outstanding loan amount and TZS 213,217,500.00 being the 15% interest on the outstanding amount, hence, making a total of TZS 458,417,500.00. Therefore, the respondent decided to institute a summary suit against the appellant praying for the following reliefs: (i) Payment o f 725458,417,500.00; (ii) Payment o f general damages at the tune o f TZS 200,000,000.00; (iii) Interest at the rate o f 20% from the date o fjudgment to the date o f fuii satisfaction o f the decree; (iv) Costs o f the suit to be borne by the appellant; and (v) Any other relief(s) the court shall deem fit to grant Since the appellant had no automatic right to appear and defend the summary suit, she filed an application for leave to appear and defend under Order XXXV rule 3 of the Civil Procedure Code, Cap. 33 of the revised laws (the CPC) and rule 19 (1) of the High Court (Commercial Division) Procedure Rules, 2018. The said application was allowed and the appellant was granted leave to appear and defend the summary suit instituted against her. In her written statement of defence, apart from admitting that she had executed the loan agreement together with the deed of settlement with the respondent, the appellant added that they had as well executed a tripartite agreement i.e the UTT-PID, the appellant and POSTA NA SIMU Savings and Credit Cooperative Society Limited (the POSTA NA SIMU SACCOS) to safeguard the UTT-PID financial interests, but in the calculation of the default, the respondent, by design, did not rely on the tripartite agreement. In that regard, the appellant disputed the respondent's claim by stating that, she had already paid TZS 254,800,000.00 and the remaining outstanding balance is only TZS 89,268,580 and not TZS 458,417,500.00 claimed by the respondent. It was therefore the appellant's prayer that the respondent's suit regarding the alleged loan balance should be dismissed with costs. In the event, and based on paragraph 2 of the appellant's written statement of defence, a judgment on admission of TZS 89,268,580.89 was entered in favour of the respondent and the parties were invited to provide evidence on the remaining unpaid balance of TZS 369,148,191.10. To establish the said unpaid balance, the respondent relied on the evidence of one witness, Tuzo Mpiluka (PW1) together with two documentary exhibits namely, the agreement between UTT-PID and the appellant dated 26th March, 2014 (exhibit PI) and the deed of settlement between the UTT-PID and the appellant dated 25th July, 2017 (exhibit P2). On the other side, the respondent featured one witness, Deodat Mexon Siwale (DW1) plus one documentary exhibit, to wit, the Minutes of the Meeting held on 31st August, 2015 at the POSTA NA SIMU SACCOS's Headquorters (exhibit Dl). Having heard the parties and analyzed the evidence on record, the learned trial Judge decided the case in favour of the respondent and the appellant was ordered to pay to the respondent: (i) TZS 369,148,919.10 being the amount due and remained unpaid, hence constituting a breach o f contract; (ii) TZS 5,000,000.00 general damages; (iii) Interest o f the claimed amount in item (i) above, from the date o f judgment til! payment in full at the court's rate o f 7% per annum; and (iv) Costs o f the suit. Aggrieved, the appellant decided to lodge this appeal. In the memorandum of appeal, the appellant has preferred thirteen (13) grounds which can conveniently be paraphrased as follows: First, that, the learned trial Judge erred in law and facts in holding that the appellant had breached the agreement and thus liable to repay TZS 369,148,919.10; second, failure by the learned trial Judge to find that Clause 10.0 of the agreement constituted an exemption to the appellant from all negligent or willful acts or omissions, hence not liable to repay the sum of TZS 369,148,919.10; third, failure by the learned trial Judge to invoke Clause 10.0 of the agreement on indemnity and item (iii) in exhibit Dl; fourth, failure by the learned trial Judge to hold that the respondent had breached Clauses 7.0, 7.1 and 7.2 of the agreement; fifth, failure by the learned trial Judge to hold that the appellant was not liable to repay the sum of TZS 369,148,919.10 as the costs advanced by UTT-PID was supposed to be fully covered from the proceed of sale of plots by the POSTA NA SIMU SACCOS; sixth, failure to draw adverse inference against the respondent for his default to tender the tripartite agreement as an exhibit which has an effect of joining the real parties to the suit, i.e UTT-PID and POSTA NA SIMU SACCOS; seventh, the respondent's case was not proved to the required standard; eighth, failure by the learned trial Judge to confine himself to the parties' pleadings; ninth, Clauses 8.0 and 8.1 of the agreement were not considered; tenth, failure by the learned trial Judge to comply with the requirement of Order XII Rule 4 of the CPC; eleventh, failure by the learned trial Judge to apply proper principles in assessing specific damages which were not properly pleaded and strictly proved by the respondent; twelfth, the learned trial Judge erroneously relied on the deed of settlement which was void and in conflict with the agreement; and thirteenth, the learned trial Judge improperly relied on the void agreement as the parties thereto illegally agreed to oust the jurisdiction of the High Court Main/District Registry and illegally conferred jurisdiction to only the High Court, Commercial Division. At the hearing of the appeal, the appellant had the services of Mr. Alex Mashamba Balomi, learned counsel whereas Mr. Baraka Nyambita, [earned Senior State Attorney assisted by Mr. Edwine Webiro, learned State Attorney represented the respondent. It is noteworthy that, both learned counsel for the parties had earlier on lodged their respective written submissions in support of and in opposition to the appeal. We shall therefore determine the grounds of appeal, in the same manner proposed by the learned counsel for the appellant in his written submission starting with the grounds of appeal touching on the irregularities and the validity of the agreement and the deed of settlement. However, before doing so, it is crucial to state that, this being the first appeal, it is in the form of a re-hearing, therefore the Court, has a duty to re-evaluate the entire evidence on record by reading it together and subjecting it to a critical scrutiny and if warranted, arrive at its own conclusion of facts subject to the usual deference to the trial court's findings based on credibility of witnesses - See D.R. Pandya v. Republic [1957] E.A 336 and Jamal A. Tamim v. Felix Francis Mkosamali & The Attorney General, Civil Appeal No. 110 of 2012 (unreported). $ In arguing the twelfth and thirteenth grounds of appeal, Mr. Balomi faulted the learned trial Judge for relying on the void agreement and a deed of settlement. Starting with the agreement, Mr. Balomi referred us to Clause 11 which provides that: "In case o f any differences arising on issues relating to this agreement-its implementation or interpretation, efforts would be made to resolve the same through mutual discussions between the parties herein. In the event the parties fail to resolve the said differences by mutual discussions, either party shall be at liberty to refer the difference or dispute to Arbitration and or the High Court, Commercial Division." He then argued that, the above clause had rendered the said agreement void and un-enforceable, as the parties erroneously agreed to oust the statutory jurisdiction of the High Court Main/District Registry. To amplify further on that point, Mr. Balomi cited sections 2 (2) and 28 of the Law of Contract Act, Cap. 345 (the LCA) and argued that, since the said agreement was void ab initio, it was improper for the learned trial Judge to act on it and award reliefs to the respondent. To buttress his proposition, he referred us to the cases of Shyma Thanki & Others v. New Palace Hotel [1971] 1 EA 199 at 202 and East Africa Breweries Limited v. GMM Company Ltd (2002) T.LR. 12. As for the deed of settlement, Mr. Balomi argued that the same is void because it was not signed by all parties who executed the tripartite agreement. He equally faulted the learned trial Judge for failure to draw an adverse inference against the respondent for failure to tender the tripartite agreement as an exhibit during the trial. According to him, the tripartite agreement is an integral part of the main agreement (exhibit PI). In his response on these grounds, Mr. Webiro strongly challenged the submission made by Mr. Balomi by arguing that, both the agreement and the deed of settlement are valid documents, as they were voluntarily executed by the parties who agreed to be bound by them. That, the said parties, to a large extent, had already honoured some of the terms and conditions enshrined thereto. Mr. Webiro also challenged the submission made by Mr. Balomi regarding Clause 11.0 of the agreement. He contended that, the said clause did not oust the jurisdiction of the High Court Main/District Registry but parties selected the High Court, Commercial Division as a forum to adjudicate their disputes taking into account the nature of their transactions which had commercial significance. To buttress his proposition, he cited the cases of Scova Engineering S.P.A & Another v. Mtibwa Sugar Estates Limited & 3 Others, Civil Appeal No. 133 of 2017 [2021] TZCA 74: [12 March 2021: TanzUI] and Mashishanga Salum Mashshanga v. CRDB & 2 Others, Civil Appeal No. 535 of 2021 [2024] TZCA 203: [19 March 2024: TanzUI]. He thus distinguished the cases cited by Mr. Balomi by arguing that facts in those cases are not relevant to the current appeal. He added further that, the choice of forum in this appeal, is in compliance with section 7 (1) of the CPC. As for the deed of settlement, Mr. Webiro challenged the submission made by his learned friend by making cross reference to the tripartite agreement which had never came into force, as it was not signed by the POSTA NA SIMU SACCOS. He also added that, the said document is not part of the record of appeal because it was not tendered by the parties during the trial. He thus beseeched us to disregard the submission made by Mr. Balomi on that aspect. He then insisted that, since the agreement together with the deed of settlement are both valid documents and voluntarily executed by the parties, it was li correct and proper for the learned trial Judge to act on them and decide the matter in favour of the respondent. From the submissions made by the learned counsel for the parties on these grounds of appeal, we wish to start by stating that, it is common ground that jurisdiction of courts is a creature of statute and is conferred and prescribed by the law and not otherwise. Pursuant to section 7 (1) of the CPC, cited to us by the learned counsel for the parties, courts shall have jurisdiction to try all suits of a civil nature except for suits of which their cognizance is either expressly or impliedly barred. It is also a cardinal principle of the law that parties are bound by their agreement and their choice of forum should be enforced by the court i.e the sanctity of contracts. This Court, in several occasions, has pronounced itself on the applicability of the above principles. See for instance, the cases of Sunshine Furniture Co. Limited v. Maersk (China) Shipping Co. Limited, Civil Appeal No. 98 of 2016 [2020] TZCA 1934: [23 January 2020: TanzUI], Mashishanga Salum Mashishanga (supra) and Scova Engineering SPA (supra). Specifically, in the latter case, the Court having revisited a number of cases and relevant texts, observed that, "...choice o f law and forum clauses are binding and they are not contrary to public policy nor would it be a contravention o f section 28 o f the Law o f Contract Act, Cap. 345 R.E. 2002. "Cementing further on this position, the Court referred to the commentary by Pollock and Mulla in the Indian Contract and Specific Reliefs Act, 11th Ed. at page 454 where it was observed that: "Where two or more courts have jurisdiction to try a suit, the agreement between die parties limiting the jurisdiction to one court is neither opposed to public policy nor a contravention o f s. 28 o f the Contract Act. So long as the parties to a contract do not oust the jurisdiction o f all courts which would otherwise have jurisdiction to decide the cause o f action under the law, it cannot be said that the parties have by their contract ousted the jurisdiction o f the court and where the parties to a contact agree to submit the dispute arising from it to a particular jurisdiction which would otherwise also be a proper jurisdiction under the taw, their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as againstpublic policy." [Emphasis added]. Being guided by the above authorities and having considered the nature of the agreement between the appellant and the UTT-PID, we agree with Mr. Webiro that, Clause 11,0 of the agreement did not ouster the jurisdiction of the High Court Main/District Registry but parties expressed their choice on an appropriate forum to adjudicate their dispute. We have as well noted that, throughout the trial, Mr. Balomi did not challenge the validity of the said agreement and or raise any concerns regarding the jurisdiction of the High Court, Commercial Division to entertain the matter, he only raised the said issue in his final written submissions. With profound respect, we find the submission by Mr. Balomi, at this stage, to be nothing, but an afterthought. As correctly argued by Mr. Webiro even the cases of Shyma Thanki & Others (supra) and East Africa Breweries Limited (supra) relied on by Mr. Balomi on this aspect, are distinguishable with the facts of this appeal, as in those cases, the parties' choice of forum ousted the jurisdiction of the court, which is not the case herein. In this appeal, parties selected the High Court, Commercial Division, which had the requisite jurisdiction to entertain their dispute. Having perused the record of appeal, we are also in agreement with Mr. Webiro that, the submission made by Mr. Balomi regarding the issue of tripartite agreement, is misconceived, as the said document is not part of the record of appeal. That said, we find the twelfth and thirteenth grounds of appeal to have no merit. The appellant's complaint on the sixth ground regarding non­ joinder or misjoinder of the parties, is straight forward and should not detain us. It is on record that, the said issue was also not raised by the appellant during the trial, but only featured in Mr. Balomi's final written submission. Having considered the appellant's final written submission, parties' pleadings and the provisions of Order 1 rule 9 of the CPC, the learned trial Judge, at page 301 to 303 of the record of appeal, observed that: "Mr. Balomi in his final written submission raised and argued an objection to the maintainability o f this suit This is: One, non-joinder o f parties and by failing to join UTT-PID and POSTA NA SIMU SACCOS LIMITED despite being a body corporate capable o f being sued and sue renders the suit not tenable. According to Mr. Baiomi, the Attorney General was just a necessary party whose presence is necessitated by law in the Government proceedings which alone is not enough to maintain this suit...I have carefully studied and considered the pleadings by the parties and the relevant law, I am prepared to overrule this point The reasons, I take this stance are; one, the point o f misjoinder and non-joinder was raised as an afterthought because the plaintiff at paragraph 1 o f the plaint clearly stated why he instituted this suit in his capacity and the defendant in his written statement o f defence noted the same as not being disputed...I see no reasons to agree with Mr. Baiomi's arguments and I consider his submission on this point as a technicality to avoid the liability rather than point o f law as he wants this court to believe...In this suit there is no dispute that the Attorney General is a necessary party and the UTT-PID is 100% Government institution which in all respect is represented by the Attorney General..." On our part, having revisited the parties' pleadings and the entire record of appeal and the fact that throughout the trial the appellant did not raise the said issue and or invoke the provisions of Order 1 rule 10 (2) of the CPC, we find no justification to fault the finding of the [earned trial Judge on this matter. In the premises, this ground of appeal equally fails. On the tenth ground, Mr. Balomi faulted the learned trial Judge for failure to comply with the provisions of Order XII rule 4 of the CPC as there was no notice issued to the appellant prior to the issuance of judgment on admission. According to him, the appellant's purported admission in the pleadings (written statement of defence) did not entitle the respondent to a judgment on admission. In his response to this ground, Mr. Webiro challenged the submission made by Mr. Balomi by arguing that, Order XII rule 4 of the CPC does not require the issuance of notice prior to the delivery of judgment on admission. He clarified that, the said provision, covers admission of liability made in pleadings and or otherwise. To amplify further on that point, Mr. Webiro referred us to page 78 of the record of appeal and argued that, since in her written statement of defence, the appellant admitted that she owed UTT-PID TZS 89,268,580.89 and she did not object the prayer by the respondent on the issuance of judgment on admission, the learned trial Judge was correct to pronounce the said judgment in favour of the respondent. It is glaring that, the rival arguments advanced by the learned counsel for the parties on this ground centered on the interpretation and applicability of Order XII rule 4 of the CPC. For the sake of clarity, the said provisions provide that: "Any party may at any stage o f a suit, where admissions o f fact have been made either on the pleading, or otherwise, apply to the court for such judgment or order as upon such admissions he may be entitled to, without waiting for determination o f any other question between the parties; and the court may upon such application make such order, or give such judgment, as the court may thinkjust." Given the position of the law stated above, we agree with Mr. Webiro that there is no requirement of notice to be issued prior to the issuance of judgment on admission. The notice is required under Order XII rule 3 of the CPC. Under Order XII rule 4, the court has discretion to either enter judgment upon admission or make such order as it thinks fit. It is noteworthy that, having been served with the respondent's plaint on the claim of TZS 458,417,500.00 being a principal sum under paragraph 3 of the respondent's plaint, the appellant, under paragraph 2 of her written statement of defence responded that: "The content o f paragraphs 3... o f the plaint is strongly disputed and the plaintiff is put to strict proof thereof. The amount claimed of TZS 458,417,500.00 are baseless as the principal sum loaned was TZS 344,068,580.85and out o f this amount TZS 254,800,000.00 has been paid making the amount remained as a principal sum be TZS 89,268,580.89. The computation o f the interest done by the plaintiff should have considered the remaining sum o f TZS 89,268,580.89 something they did not do." [Emphasis added]. It is also on record that, on 28th September, 2021, when the matter was called for hearing, Mr. Webiro, learned counsel for the respondent brought to the attention of the court the fact that, under paragraph 2 of the written statement of defence, the appellant had admitted that she owed the respondent TZS 89,268,580.89. He therefore, prayed for judgment on admission in respect of that amount in favour of the respondent in accordance with Order XII rule 4 of the CPC. Mr. Balomi, learned counsel who had the conduct of the appellant's case did not object to the said prayer, following which the learned trial Judge entered judgment on admission in respect of the uncontested amount. Therefore, in the light of the above position of the law and having considered the parties pleadings and on what exactly transpired before the trial court, we find the appellant's criticism on the procedure adopted by the learned trial judge to issue a judgment on admission, in respect of TZS 89,268,580.89 is, with respect, without any justification. In the upshot, we also find the tenth ground of appeal devoid of merit. Having so found, we now turn to consider the first, second, third, fourth, fifth, seventh, ninth and eleventh grounds. In these grounds, the appellant's main complaint is that the learned trial Judge erred in holding that the appellant had breached the agreement and thus liable to repay TZS 369,148,919.10 without taking into account Clause 10.0 of the said agreement which constituted an exemption to the appellant from all negligent or willful acts or omissions done by UTT-PID. Submitting on these grounds, Mr. Balomi referred us to exhibit D1 and the tripartite agreement and argued that, the source of loan repayment was the appellant's 40% share of revenue from the project directly paid to UTT-PID by POSTA NA SIMU SACCOS. That, the said money was not paid to the appellant, because the project was frustrated by various reasons set out in exhibit Dl. It was therefore the argument of Mr. Balomi that, in the circumstances, it was the respondent who breached the agreement and not the appellant. To substantiate his argument, Mr. Balomi referred us to the testimony of PW1 and specifically, exhibits PI and P2 and argued that, during the trial, PW1 admitted that the appellant had already paid TZS 254,800,000.00 in servicing the loan leaving only the remaining balance of 89,268,580.89 and not TZS 458,417,500.00 claimed by the respondent. He thus insisted that, the respondent's case was not proved to the required standard and if the learned trial Judge could have properly evaluated the evidence on record, he would not have come to an erroneous conclusion that the appellant had breached the contract. Based on his submission he prayed for the appeal to be allowed with costs. In response, Mr. Webiro disputed the submission advanced by Mr. Balomi by referring us to the testimony of DW1 and argued that, during cross examination, the said witness narrated all the stages of the project and admitted that, after signing of the deed of settlement, the appellant failed to repay the remaining balance of TZS 245,200,000.00 together with interest of 15%. As for the applicability of Clause 10.0 of the agreement, Mr. Webiro contended that, the same is only applicable on issues of losses and or damages which are occasioned by negligence or omission of the defaulting party. It was his argument that, since in this appeal, the appellant did not adduce evidence during the trial to that effect, the said clause is not applicable. He then argued that, during the trial, the respondent has managed to prove her case against the appellant to the required standard through the evidence of PW1 together with exhibits PI and P2 which was corroborated by the evidence of DW1. Finally, and based on his submission, Mr. Webiro urged us to dismiss the appeal, with costs, for lack of merit. Having closely considered the submissions made by the learned counsel for the parties on the above grounds and revisited the evidence adduced by DW1, we find no difficulty to agree with the submission of Mr. Webiro that, the respondent's case was proved to the required standard. At this juncture, we find it apposite to reproduce the evidence of DW1 found at pages 285 and 286 of the record of appeal. Specifically, during cross examination by Mr. Webiro, when DW1, at page 285 of the record of appeal, was shown the deed of settlement tendered by PW1 as exhibit P2, he testified that: "I know and recognize exhibit P2 and I signed it According to exhibit P2, we failed to pay the money back. It is true by the time, we signed the contract (exhibit P2), the amount was TZS 604,415,100.00. We agreed to reduce interest and I was to pay TZS 500 Mill. There was a schedule o f payment which was to end 3&h May, 2018. Our Company out o f that agreement was able to pay TZS 254,800,000.00 only. The unpaid amount is TZS 245,200,000.00 remained unpaid. It is true the unpaid amount attract interest at 15% per month." It is common ground that, the learned trial Judge, among others, evaluated and analyzed the above evidence and made a finding that the respondent had managed to prove the case against the appellant to the required standard. In the circumstances, and having revisited the entire evidence on record, we are satisfied that the trial Judge properly analyzed the evidence availed before him and reached to an appropriate conclusion hence there is no justification to interfere with his decision. Again, and with profound respect, we find the submission made by Mr. Balomi that the case against the appellant was not proved to the required standard to be unfounded and not supported by the record. In the event, we find the first, second, third, fourth, fifth, seventh, ninth and eleventh grounds of appeal to have no merit. Since the above finding disposes of the appeal, we see no compelling reasons to consider the remaining ground of appeal. In view of what we have endeavoured to discuss, we do not find cogent reasons to vary the decision of the trial court. Consequently, we hereby dismiss the appeal in its entirety with costs. DATED at DODOMA this 17th day of February, 2025. R. J. KEREFU JUSTICE OF APPEAL P. S. FIKIRINI JUSTICE OF APPEAL B. S. MASOUD JUSTICE OF APPEAL The Judgment delivered this 18th day of February, 2025, in the presence of Mr. Alex Balomi, learned counsel for the Appellant via Video Conference from Dar es Salaam and in the presence of Ms. Jenipher Kaaya, learned Senior State Attorney for the Respondent, is hereby certified as a true copy of the original.