JUDGMENT SOMOCHEM LTD AND PRINCE AFRICA LTD

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 114 OF 2023 SOMOCHEM LIMITED…………………………………………………. PLAINTIFF VERSUS PRINCE AFRICA LIMITED……………………………………………...DEFENDANT JUDGMENT Date of Last Order: 21/06/2024 Date of Judgment: 30/08/2024 GONZI, J. The Plaintiff sued the Defendant claiming for payment of TZS. 59,913,350.49 and USD 12,390.00 being long outstanding undisputed unpaid debt overdue from the arrangements for supply of polymers and other chemicals to the Defendant on credit basis on agreement that the Defendant would pay for the delivered goods within 60 days of issuance of tax invoices issued parallel with delivery orders. The Plaintiff also claimed for agreed commercial interest at the rate of 12% per annum from the dates the debts were due for payment. In addition, the Plaintiff claimed for specific damages, general damages and costs of the suit. 1 From the Plaint, the Plaintiff stated that on 21st July, 2020 the Plaintiff and the Defendant entered into an oral agreement for the Plaintiff to supply the Defendant with chemical compounds on credit basis. Under the Agreement, the Plaintiff supplied the Defendant with the agreed chemical compounds and issued the Defendant with nine tax invoices from 21st July, 2020 to 3rd June 2021 which remain unpaid by the Defendant. The issued Tax Invoices were issued after receipt of orders from the Defendant and each tax invoice was accompanied with its respective delivery order duly endorsed by the Defendant, hence symbolizing creation of supply agreement between the parties. The unpaid invoices forming the substance of the present suit are: i) Invoice dated 21st July, 2020 for USD. 6,195.00; ii) Invoice dated 29th July, 2020 for USD. 6,195.00; iii) Invoice dated 18th November, 2020 for TZS. 16,903,500/=; iv) Invoice dated 23rd November, 2020 for TZS. 7,670,000/=; v) Invoice dated 27th November, 2020 for TZS. 9,558,000/=; vi) Invoice dated 3rd December, 2020 for TZS. 9,882,500/=; vii) Invoice dated 12th April 2021 for TZS. 10,148,000/=; 2 viii) Invoice dated 1st June, 2021 for TZS. 10,000,000/=; ix) Invoice dated 1st June, 2021 for TZS. 10,000,000/=. The Court has taken notice that this amount pleaded as per the above invoices amounts to TZS. 74,162,000/= and USD. 12,390.00. The Plaintiff stated that despite making personal follow ups, issuance of demand letters, sending text messages, making phone calls and writing emails to remind the Defendant, the said outstanding sum has not been paid by the Defendant. The Plaintiff alleged that the Defendant once issued two cheques No. 016449 and No.016450 each for TZS. 10,000,000/= in respect of the Tax Invoices of 1st June, 2021. The Plaintiff stated that despite issuance of the cheques, the issued cheques bounced upon their being presented to bank for encashment. The Plaintiff prayed for Judgment and Decree against the Defendant for Orders that: (i) A Declaration that the Defendant breached the supply of goods agreements she had with the Plaintiff; (ii) Payment of TZS 59,913,350.49 and USD 12,390.00 being the outstanding unpaid debts; 3 (iii) Commercial interest on (i) and (ii) above at the prevailing agreed rate of 12% per annum from the date of the Cause of action to the date of Judgment; (iv) General damages as may be assessed by the Court; (v) An order for payment of interest on (i) and (ii) above at the Court’s rate per annum from the date of Judgment to the date of satisfaction; (vi) Costs of the Suit; (vii) Any other compensation or payment as this Court may deem fit and just to grant. The Defendant in the Written Statement of Defence denied to be indebted to the Plaintiff. The defendant admitted to have had a business arrangement with the Plaintiff as alleged in the Plaint except that the arrangement was not intended to constitute an enforceable legally binding supply agreement. He stated that the agreement, if any, was not registered hence not legally enforceable. On the outstanding Invoices, the Defendant under paragraph 4 of the Written Statement of Defence, disputed to have been served with the invoice of 4th December, 2020. He also disputed issuing dishnoured checques to the Plaintiff alleging that there was no notice from 4 the bank of dishonoring the cheques. The Defendant, under paragraph 5 of the Written Statement of Defence, stated that the Invoices dated 21st July 2020 and 29th July, 2020 are confusing in terms of the type of currency, figures and the products alleged to have been delivered. It was stated that the Defendant had never been served with the Plaintiff’s general terms and conditions of sale or at all. It was stated that as the claims of the Plaintiff are legally un-enforceable, the reminders and demand letters were not justified as there had never been any binding supply agreement between the parties from which a justifiable claim could arise. The Defendant prayed for dismissal of the suit with costs. During the Final Pretrial Conference, upon receiving proposals from the learned Counsel for both sides, the Court framed the following issues for determination: 1. Whether there is a binding and valid contract between the parties herein for supply of polymers and other chemicals on credit? 2. If the 1st issue is answered in the affirmative, what were the obligations of the parties under the contract? 5 3. If the 1st issue is answered in the affirmative, whether the parties fulfilled their obligations under the contract? 4. To what reliefs are parties entitled? The Plaintiff presented one Witness Mr. Pathias Shimbo, a Principal Officer of the Plaintiff Company. He attended for cross examination after having given his evidence through witness statement filed in Court on 2nd May 2024. The Plaintiff’s witness tendered in Court Exhibit P1 collectively which consists of Email correspondences between the Principal Officers of the Plaintiff and of the Defendant regarding the outstanding nine invoices which constitute the claim in this suit. All the emails have one persistent message that: “Please find below the details of overdue invoices and outstanding as on date. Please release the amount of outstanding immediately as these amounts are being overdue since long time from now”. That message is followed by a list of the nine invoices, the claimed amounts for each and their products details. An e-mail dated 10th October 2022 with the heading: “Re: Outstanding statement as on 07.10.2022- 6 Request to release the overdue invoice”, was from Rajesh Joshi of Somochem Limited to Venkata UV, Raakesh Chheda, Mehool Vyas and Divyaans Chheda, of the Defenda Company. In it the said Rajesh Joshi for the Plaintiff wrote: “Dear Raakesh Bhai, please update us on payment of 2-year-old bills. Credit insurance and banks are creating lot of problem to us.” To the above e-mail, Raakesh Chheda, for the Defendant replied thus: “Rajesh Bhai, Mehool and you had discussed some mechanism to clear old outstanding and partly giving fresh material so that in due course payments get cleared, I don’t know why the same did not get executed. This is the only and best way to clear your outstanding”. The above mentioned e-mail correspondences had been triggered and preceded by another email of 7th October, 2022 from Venkata UV of Somochem Limited to Raakesh Chheda, Mehnool Vyas and Divyaansh Chheda of Prince Africa Ltd. In the e-mail of 7th October 2022, the Plaintiff was claiming for payment of the overdue invoices dated 21st July 2020 for 6,195; 2nd February, 2021 for TZS. 10,751,350/=; 29th July, 2020 for 6195; 7 18th November, 2020 for TZS. 16,903,500/=; 23rd November, 2020 for TZS. 7,670,000/=; 27th November, 2020 for TZS. 9,558,000/=; 3rd December 2020 for TZS. 9,882,500/= and 4th December 2020 for TZS. 10,000,000/=. The total invoiced amount was indicated as 64,925,740. PW1 also tendered in Court Exhibit P2 which collectively is made up of the Nine unpaid invoices and their respective Delivery Notes. Every Invoice bears the following declaration at the foot thereof: 1. When making payment please pay through: For TZS Invoices Stanbic Bank Tanzania Ltd A/c No.9120000648718- SBICTZTX-Center branch, Dar es salaam Tanzania. For USD Invoices Stancic Bank Tanzania Ltd A/c No.9120000970970-SBICTZTX-Center Branch, Dar es salaam Tanzania. For TZS Invoices CRDB Bank PLC A/c No.0150481017500-CORUTZTZ-Tazara Branch, Dar es Salaam, Tanzania. 2. Goods remain in the property of SOMOCHEM LTD until payment has been received in full. 3. All sales are governed by our standard Terms and condition of Sale which is available on request. 8 Note: Refer Incoterms 2010 for the appropriate values applicable to Incoterms mentioned. Sales is governed by our standard Terms and Condition of the Sale which is available on request. Late payment will incur interest at a rate of 12% per Annum. Overdue invoices in the local currency will be charged at Prime lending rate published by Central Bank +4%. The Invoices have a description of goods sold, the quantity of goods, price and total amount. They also have a rubber stamp of the Plaintiff and signature of the Authorized Signatory. They have a rubber stamp of the Defendant Company and the date of receipt of the Invoices by the Defendant and signature of the Defendant’s Officer. The Delivery Notes accompanying each of the Invoices, also, show the delivery of the goods to the Defendant on the given dates, corresponding Invoice Number, description of goods, their quantity, packaging details and number of units delivered. Each delivery Note has a rubber stamp of the Defendant and signature under it, except for the Delivery Note of 4th December 2020 which has no rubber stamp or signature of the Defendant. All the Delivery Notes also have details of the Driver, the delivery vehicle and details of the Defendant’s personnel who took delivery of the goods from the Plaintiff. 9 PW 1 tendered Exhibit P3 which is a demand letter dated 22nd September, 2022 written by Lexcon Attorneys Law Company, addressed to the Managing Director of the Defendant Company, claiming for payment of the unpaid invoices above described. In it the Plaintiff claims for payment of TZS. 93,523,409.24 as the overstayed debt originating from the supply of goods on credit basis, 15% monthly compound interests thereon and compensation for breach of contract. The demand note claims TZS. 33,047,530.39 for the invoice dated 21st July, 2020; TZS. 14,306,918.85 for the invoice dated 29th July 2020; TZS. 8,910,460/= for the invoice dated 18th November, 2020; TZS. 7,670,000/= for the invoice of 23rd November, 2020; TZS 9,558,000/= for the invoice of 27th November, 2020; TZS 9,882,500/= for the invoice of 3rd December, 2020 and TZS. 10,148,000/= for the invoice of 04th December, 2020. The Defendant presented one witness who testified as DW 1. Her name is Bernadetha Shoo, the Defendant’s Principal Officer who works as the Administrative Manager and Human Resource Officer. She filed a Witness Statement on 2nd May, 2024. She attended for cross examination. She did not tender any exhibit. Essentially, through DW1, the Defendant refuted the claims made by the Plaintiff generally and in particular she 10 refuted claims based on the Invoices of 21st July 2020, 29th July 2020 and 4th December, 2020. DW 1 testified on what was stated in the Written Statement of Defence that there was a business arrangement between the Defendant and the Plaintiff but that it had no force of law as a binding and legally enforceable contract because the agreement was not registered. The Defendant in the Witness Statement and the Written Statement of Defence protested against some Invoices claimed by the Plaintiff, not all. The Defendant in the Witness Statement under paragraph 1(j) read together with Paragraph 1(l) also, disputed the invoices of 4th December 2020, 21st July 2020 and 29th July 2020 by stating that: “The invoice dated 4th December 2020 had never been received by our company. I know the rubber stamp we use to receive documents. I have also seen the claims based on invoices dates 21st July 2020 and 29th July 2020. I state that, it is not known why the invoices are against the delivery note. It is not known the figures claimed are Tanzanian Shillings or United States Dollars. The Delivery note refers to the general terms and conditions of sales by the Plaintiff. I am not aware of those terms and conditions and if they form the contract of sale or not”. 11 Upon conclusion of the evidentiary hearing, both Learned Counsel, with leave of the Court, filed their respective final submissions. Mr. Oscar Millanzi, learned Advocate, represented the Plaintiff while Mr. Robert Rutaihwa, Learned Advocate, represented the Defendant. Briefly, Mr. Millanzi, Learned Advocate, submitted that a contract of supply of goods can be established from the conduct of the parties thereto. He relied on the decision in Gulf Aggregates (T) Limited versus Jassie and Company Limited, Commercial Case No.79 of 2022 where this Court held at page 14 that: “It follows, in essence, that with or without a formal written agreement, when a party proves to have supplied goods to another for price (consideration), and the other party receives and retains such goods, an inference may be readily drawn to the effect that, the two parties are in a contract of supply.” He submitted that, in the present case, the Plaintiff supplied goods namely polymers and other chemicals to the Defendant and the Defendant accepted and retained the same. He submitted that a contract of supply of goods was thereby established. Mr. Millanzi, Learned Advocate, submitted that the terms of the Invoices constituted the contract between the parties. 12 He prayed that the Court finds that the first issue is answered in the affirmative. On the obligations of the parties, he submitted that pursuant to the oral agreement evidenced through the tax invoices and delivery notes, the Plaintiff had an obligation to supply the Defendant with polymers and other chemicals and the Defendant had the duty to pay for the same within 60 days upon being invoiced. He submitted that there is no evidence of proof of payment by the Defendant for the outstanding invoices. He, therefore, submitted that the Defendant should be found in breach of the terms of the supply agreement. Mr. Millanzi, Learned Advocate, referred the Court to section 73 of the Law of Contract Act, CAP 345 of the Laws of Tanzania R.E 2019. He argued that where a contract is breached, the innocent party is entitled to compensation for any loss or damages which naturally arise in the usual course of things from such breach or which the parties knew when they made the contract or is likely to result from the breach. Mr. Millanzi Learned Advocate, submitted that the Plaintiff is entitled to special damages as prayed in the Plaint. He also prayed for general damages as can be assessed by the Court to be reasonable. He cited the case of Joao Oliveira and Soul of Tanzania Limited versus It started 13 in Africa Limited and Baraja Bernard Kangoma, Civil Appeal No.186/2020 decided by the Court of Appeal in Arusha. He submitted that in the foregoing case, the Court of Appeal held that: “Since general damages awarded at the discretion of the Court, in our considered opinion the amount of USD 20,000.00 awarded by the learned Trial Judge was fair in the circumstances”. The learned Counsel urged this Court to exercise its discretion and grant general damages in this case bearing in mind that the Defendant had the intention to cause loss to the Plaintiff and tarnish the Plaintiff’s reputation before the Plaintiff’s donors who most of them pulled away. Mr. Robert Rutaihwa, Learned Advocate for the Defendant, filed final submissions for the Defendant. He submitted that there was no enforceable agreement between the Plaintiff and the Defendant in this case, apart from a mere business arrangement which the Plaintiff erroneously took as symbolizing that the Plaintiff had thereby entered into a legally binding supply arrangement with the Defendant. He submitted that even PW1, during cross examination, admitted that he had not seen any such contract 14 between the parties and that the said PW1 referred to an oral agreement for which he was not a party but that he had been told about it. Hence, PW1’s evidence was hearsay. Mr. Rutaihwa, Learned Advocate, submitted that paragraphs 3, 4, 5 and 7 of the Plaint do not talk of an existing contract with the Defendant. Rather, they refer to a business arrangement. He submitted that this means that at no time did the parties execute a contract. He submitted that not all agreements or arrangements are contracts unless they qualify as such under section 10 of the Law of Contract Act CAP 345. Mr. Rutaihwa, Learned Advocate, submitted that the plaintiff’s evidence is contradictory. He submitted that the invoice of 18th November 2020 which forms part of Exhibit P2 shows that the claimed amount was TZS. 16,903,500/= while the email correspondences Exhibit P1 at page 36 show that on that same date the amount was TZS. 8,910,460/=. Mr. Rutaihwa, Learned Advocate, submitted that if indeed there was a contractual relationship between the parties under the supply arrangement and that the payment period for each of the contract, as per the invoices, was 60 days after delivery of goods, why is it that no action was ever taken by the Plaintiff against the Defendant since 2020 when all the invoices became due for payment until the case was filed in 2023. He submitted that 15 the laxity to enforce the terms of the invoices on the part of the Plaintiff, shows that the parties did not intend their arrangement to have a legally binding contractual status capable of being enforced in Courts. He emphasized that what existed between the parties was a mere arrangement, but not a contract. Mr. Rutaihwa, Learned advocate for the Defendant, argued that in the event the Court finds that there was a binding contractual relationship between the Plaintiff and the Defendant, the Court should uphold that the plaintiff has failed to prove existence of such agreement contrary to section 111 of the Evidence Act, which imposes the burden of proof was upon the person who alleges the existence of certain facts. He submitted that the Court should find that the Plaintiff has failed to prove existence and breach of the said contract. He argued further that the amount claimed under the Invoice of December 4th 2020 for TZS. 10,148,000/= is not valid as the goods thereof were not delivered to the Defendant. He, again, argued that USD 12,390 carried by the Invoices of 21st July, 2020 and 29th July, 2020 is contradicted by the email correspondence of 21st June, 2021 part of Exhibit P1 collectively at pages 36 to 37 in which the Plaintiff had confirmed that: 16 “As per our reconciliation at our office during your visit, please find below the outstanding statement as on 21st June 2022. We do not have any invoice pending in USD and all pending invoices are in TSH as per below.” Mr. Rutaihwa Learned Advocate, also argued that even Exhibit P3, the demand letter, which was issued subsequent to the account reconciliation, has no claims by the Plaintiff against the Defendant in USD. All claims therein are in TZS. He submitted that the Plaintiff’s allegations on the Defendant having issued to him some bounced checques are not genuine because the Defendant was not notified of any such bounced checques and the Plaintiff did not bring to Court any notification of bounced checques from the bank. The bounced checques were not tendered as evidence. He prayed for dismissal of the suit with costs. That marked the end of submissions by the learned Counsel. I thank them for their submissions. The first issue for determination is whether there is a binding and valid contract between the parties herein for supply of polymers and other chemical on credit. In determining this issue, I am satisfied that the relationship of the parties in this case was sufficient to create contractual 17 relationship between them. The Law of Contract Act, CAP 345 provides under section 10 that: “10. All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void: Provided that, nothing herein contained shall affect any law in force, and not hereby expressly repealed or disapplied, by which any contract is required to be made in writing or in electronic form or in the presence of witnesses, or any law relating to the registration of documents.” In this case I find that the Defendant does not dispute the existence of free consent of parties to the agreement, rather the Defendant explicitly agrees that since 2020 there has been a voluntary arrangement for the Plaintiff to supply the Defendant polymers and other chemicals on credit. Also, the Plaintiff and the Defendant are both are legal entities capable and competent to enter into contracts. The Defendant did not allege 18 incompetence to contract. The purpose or object of the agreement between the Plaintiff and the Defendant is not in dispute either. The agreement was for the Plaintiff to supply the Defendant with polymers and other chemicals on credit. The Plaintiff and the Defendant’s agreement had a lawful consideration in the form of mutual promises exchanged between them. The Plaintiff promised to supply the polymers and other chemicals and the in exchange, the Defendant promised to pay after delivery thereof. The Invoices in Exhibit P2 carried payment instructions for each supply of the goods delivered. That was sufficient consideration. The agreement between the Plaintiff and the Defendant is not one that the law expressly declares to be void. It amounted to a valid contract in law. The Defendant, in essence, has not disputed the existence of the contract. Rather, the Defendant has alleged that there was no intention to create a binding legal relation between the parties. To the contrary, I find that the facts surrounding this agreement clearly show that parties to the supply agreement intended to create a binding legal relation. The contract was evidenced in writing in the form of invoices and delivery notes and each invoice contained the terms of the contract which, among others, imposed a penalty of 12% per annum for any invoiced amount that would not be paid 19 by the Defendant within the agreed time. If parties imposed a sanction in their agreement in the form of a penalty interest, it means that they intended the contract to be legally binding and enforceable at the pain of payment of interest for non-performance of the contract. The argument by the Defendant that there was no intention to create legal relation, therefore, does not hold water. There is contract document in this case. However, in law, even in the absence of a written contract document, the invoices and delivery Notes issued by the Plaintiff to the Defendant which were duly signed by the parties and which accompanied each delivery of goods evidenced in writing the existence of the contract. In the case of Boxboard Tanzania Limited Versus Mount Meru Flowers Limited, Civil Case No.8 of 2016, decided by the High Court of Tanzania at Arusha, it was held that: “In my view the Pro Forma Invoice will remain as offer until accepted by the other party and upon being accepted it becomes a valid offer and the acceptance of the same creates a legal relationship between the parties”. 20 In the case at hand, I find that the delivery of good by the Plaintiff to the Defendant accompanied with the respective invoices and the acceptance of the delivered goods by the Defendant who signed Delivery Notes for the respective invoices, created a binding contract between the parties. The first issue is, therefore, answered in the affirmative. Further, I take note of what was decided in the case of AMI Tanzania Limited versus Prosper Joseph Msele, Civil Appeal No.159 of 2020, where at page 15 the Court held that: “Invoice is defined as a document or electronic statement stating the items sold and the amount payable, it is also called a bill. Invoicing is when invoices are produced and sent to customers. It is used to communicate to a buyer specific items, price and quantities they have delivered and how must be paid for by the buyer. Payment terms will usually accompany the billing information- see definitions uslegal terms.com. Therefore, according to this definition, an invoice is a statement sent to the customer describing the quantity and price specific items for payment”. 21 I have looked at the Invoices sent by the Plaintiff to the Defendant which were received along with their accompanying delivery notes. There are 9 Invoices which were tendered as Exhibit P2 and their respective Delivery Notes. Every Invoice bears the following declaration at the foot thereof: 1.When making payment please pay through: For TZS Invoices Stanbic Bank Tanzania Ltd A/c No.9120000648718- SBICTZTX-Center branch, Dar es salaam Tanzania. For USD Invoices Stancic Bank Tanzania Ltd A/c No.9120000970970-SBICTZTX-Center Branch, Dar es salaam Tanzania. For TZS. Invoices CRDB Bank PLC A/c No.0150481017500-CORUTZTZ-Tazara Branch, Dar es Salaam, Tanzania. 2. Goods remain in the property of SOMOCHEM LTD until payment has been received in full. 3. All sales are governed by our standard Terms and condition of Sale which is available on request. Note: Refer Incoterms 2010 for the appropriate values applicable to Incoterms mentioned. Sales is governed by our standard Terms and Condition of 22 the Sale which is available on request. Late payment will incur interest at a rate of 12% per Annum. Overdue invoices in the local currency will be charged at Prime lending rate published by Central Bank +4%. It is my finding that by the Defendant accepting the delivered goods and signing the Invoices containing the above terms alongside their Delivery Notes, the Defendant effectively entered into a legally binding contract between the Plaintiff and the Defendant. The terms of their contract are the ones contained in the Invoices above reproduced and, in addition, the usual implied terms and covenants applicable to the trade the parties were engaged in, applied. The first issue is therefore answered affirmatively that the Plaintiff and the Defendant had a valid legally binding agreement, hence a contract. The second issue was framed that if the 1st issue is answered in the affirmative, what were the obligations of the parties under the contract? This issue is in a way answered by looking at the terms of the above reproduced content of the invoices and their delivery notes. The agreement was one for supply of polymers and other chemicals. The Plaintiff had the duty to supply the agreed quantities of polymers and other chemicals and the Defendant 23 had a duty to take delivery thereof and pay for the same on time. The modality of payment was described in each invoice. Penalty for late payment was also agreed upon as disclosed in the invoices. The third issue was framed that if the 1st issue is answered in the affirmative, whether the parties fulfilled their obligations under the contract? As to the Plaintiff’s obligations of supplying the polymers and other chemicals, it is not disputed, rather it is conceded by the Defendant, that indeed the Plaintiff supplied the Defendant with polymers and other chemicals under “business arrangement”. The only contention by the Defendant was that there existed no binding agreement. As to the Defendant’s duty to take delivery of the supplied goods, the delivery notes prove that indeed delivery was done. On the Defendant’s obligation to effect payment of the amounts due on time, all the evidence show that the Defendant is in arrears. In the Email correspondences forming Exhibit P1. The Defendant promised to pay or to make arrangements for further supplies of polymers and other chemicals while periodically repaying the amounts due. This proves that the Defendant did not fulfil his obligations to pay for the supplied goods. The Demand letter shows the insistence by the Plaintiff 24 to have the unpaid up invoices be paid by the Defendant. The Non-payment for the supplied goods, amounted to breach of contract by the Defendant. To what reliefs are parties entitled? This is a question of law and facts. The Plaintiff has prayed for damages and interest. It was held by the Court of Appeal of Tanzania in the case of Evarist Peter Kimathi and Another Versus Protas Lawrence Mlay, Civil Appeal No. 3 of 2000, Court of Appeal of Tanzania at Arusha, that: “It is common knowledge that damages for breach of contract being pecuniary compensation which the law awards to a person for the injury or loss sustained through the act or default of another, may be either general or specific but not exemplary or punitive. The law is clear under section 73 of the Law of Contract Act, CAP 345 that: “73.-(1) Where a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, 25 when they made the contract, to be likely to result from the breach of it. (2) The compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. (3) Where an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge is entitled to receive the same compensation from the party in default as if such person had contracted to discharge it and had broken his contract. (4) In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non- performance of the contract must be taken into account.” Therefore, in this case, the Plaintiff is entitled to compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. The Plaintiff has prayed for both specific and general damages for breach of contract. In 26 Civil Appeal No.74 of 2019 between Philipo Joseph Lukonde and Faraji Ally Saidi, as well as in Misc. Civil Application No.79/2019 between Mawalla Advocates and Fosunwood Tanzania Limited, this Court insisted that once parties have duly entered into a contract, they should honour their obligations under the contract and that they should act within the signed agreement. On Specific damages, the rule is that to specific damages must be specifically pleaded and strictly proved. In Zuberi Augustino vs Anicet Mugabe (1992) TLR 137 at page 139 it was stated by the Court that: "It is trite law, and we need not cite any authority, that special damages must be specifically pleaded and proved." The Plaintiff in the Plaint in this case prayed for the following reliefs. (i) A Declaration that the Defendant breached the supply of goods agreements she had with the Plaintiff; (ii) Payment of TZS 59,913,350.49 and USD 12,390.00 being the outstanding unpaid debts; 27 (iii) Commercial interest on (i) and (ii) above at the prevailing agreed rate of 12% per annum from the date of the Cause of action to the date of Judgment; (iv) General damages as may be assessed by the Court; (v) An order for payment of interest on (i) and (ii) above at the Court’s rate per annum from the date of Judgment to the date of satisfaction; I will proceed to consider each of the reliefs prayed for. As the Court has already answered the first, second and the third issues in favour of the Plaintiff, the Plaintiff is entitled to the prayer of declaration that the Defendant breached the supply of goods agreements she had with the Plaintiff. As to the reliefs in prayers (iii) and (iii,) the same are craving for specific damages. The Plaintiff is praying for payment of TZS 59,913,350.49 and USD 12,390.00 being the outstanding unpaid debts and payment of commercial interest on at the prevailing agreed rate of 12% per annum from the date of the Cause of action to the date of Judgment. The 12% per annum is derived from the terms agreed in the invoice hence payable as such. Now the rule is that specific or special damages must be specifically pleaded and 28 strictly proved. The claims for specific damages in this case were specifically pleaded under different paragraphs of the Plaint. Have they also been strictly proved? It is a question of evidence. The Plaintiff attempted to prove the specific damages claimed vide the nine Invoices tendered as Exhibit P1 collectively as well as the Emails which were Exhibit P 2 and the Demand Letter Exhibit P3. The Defendant was consistent in disputing some of the claims of the plaintiff under the Invoices forming Exhibit P2. I have looked at the Invoice of 4th December 2020. It has no stamp or signature of the Defendant to indicate that it was sent by the Plaintiff and delivered to the Defendant. Its accompanying delivery note also does not have rubber stamp or signature of the Defendant acknowledging receipt of the goods. It only has details of the driver and details of the one receiving the goods. There still lingers some questions as to whether the Plaintiff really supplied the Defendant with the purported goods covered by the invoice of 4th December 2020. The Defendant has disputed that allegation vehemently. The burden of proof was upon the Plaintiff but the Plaintiff has failed to substantiate the same as against the Defendant. The claim of TZS. 10,148,000/= for the Invoice of 4th December 2020 is therefore not 29 sufficiently and strictly proved as specific damages. The Plaintiff is not entitled to it. I must say that the Plaintiff in this case was not strict in attempting to prove the specific damages strictly. The claims for the invoices of 21st July, 2020 and 29th July, 2020 were seriously disputed by the Defendant. If we ask a question as to how much was due to the Plaintiff from the Defendant under the 21st July, 2020 and 29th July, 2020 Invoices, the answer becomes vague, tenuous and inconclusive. The sum of USD 12,390 carried by the Invoices of 21st July, 2020 and 29th July, 2020 is contradicted by contents of the email correspondence of 21st June, 2021 which forms part of Exhibit P1 collectively at page 36 to 37. Exhibit P1 which originates from the Plaintiff, shows the amounts due for the 21st July 2020 and 29th July 2020 to be TZS. 6,195 for each and not USD. 6,195 each. One would wish to think that such figures therein are unrealistic and might have been intended to be expressed in USD rather than TZS. However, any thoughts of possibility of a bonafides mistaken use of the currency name are immediately brushed aside by the further explanatory content of the same Exhibit P1 where the Plaintiff states that: “As per our reconciliation at our office during your visit, please find below the outstanding statement as 30 on 21st June 2022. We do not have any invoice pending in USD and all pending invoices are in TSH as per below.” (emphasis added) The Invoices of 21st July, 2020 and 29th July, 2020 are also listed as among the outstanding invoices in TZS. Exhibit P1 was tendered in Court by the Plaintiff himself with a bid to prove his claims strictly. The Court has no reason to distrust his records which are indicated that they were reached at after reconciliation of account in the Plaintiff company. Whereas that Exhibit P1 expresses the amount in the invoice of 21st July 2020 and 29th July 2020 in Tanzania Shillings 6,195.00 for each, to the sharp contrast, Exhibit P2 also tendered by the Plaintiff, shows that the amount of 6,195 for 21st July 2020 and 29th July 2020 is actually in USD and not in TZS, hence it is USD. 6,195. While one is confused as to which one is the correct currency, he encounters the Plaintiff’s Exhibit P3 which is the Plaintiff’s Demand Letter to the Defendant. In it the Plaintiff expressly claims TZS. 33,047,530.39 for the invoice dated 21st July, 2020 and TZS. 14,306,918.85 for the invoice dated 29th July 2020. Now, the question that follows is if the Plaintiff in Exhibit P1 indicates that as on 21st June, 2022 the Plaintiff did not have any invoice pending in USD and all pending invoices were in TZS, where did the claims in USD as shown in Exhibit P2 for 21st July, 2020 and 29th July, 2020 come 31 from? Since the Invoices of 21st July, 2020 and 29th July, 2020 predate the details of 21st June 2022, contained in the email correspondences forming Exhibit P1 that negates existence of pending USD invoices, it means that by 21st June 2022, the USD Invoices for 21st and 29th July 2020 had been cleared by the Defendant. The rule is that special damages must be specifically proved. In Anthony Ngoo & Another vs Kitinda Kimaro (Civil Appeal No. 25 of 2014) [2015] TZCA 269 (25 February 2015) at page 16: “In relation to special damages, the law is settled. Special damages must be proved specifically and strictly.” In the case at hand, the Plaintiff is far from being specific and strict in proving the special damages on claims carried by the Invoices of 21st July 2020 and 29th July 2020. It was his duty to prove the specific claims strictly. I will therefore take the amount as expressed in Exhibit P1 that they represent the figures 6,195 in TZS because according to the Plaintiff, by 21st June 2022, the Plaintiff had made reconciliation of accounts and had found that there was no pending invoice payable in USD by the Defendant. There is another aspect that defeats the special damages claims by the Plaintiff. The Nine Invoices forming Exhibit P2 have a total sum that surpasses the total claim in the Plaint. When all the sums invoiced by the 32 Plaintiff and expressed in TZS as indicated in the nine invoices in Exhibit P2 are added up, they amount to TZS. 74,162,000/=. The Plaintiff in prayer (ii) in the Plaint is claiming for payment of TZS. 59,913,350.49 (without the amount in USD) as the sums due under the same nine invoices which were tendered as Exhibit P2. There is no explanation on how the outstanding amount of TZS. 74,162,000/= in the nine invoices in Exhibit P2 suddenly became TZS. 59,913,350.49 prayed for in the Plaint. All in all, the Plaintiff has claimed for lesser sums in the pleadings and has brought evidence attempting to prove more sums than what is claimed in the pleadings. Parties are bound by their pleadings. The Court therefore proceeds to deal with the plaintiff’s pleaded claim of TZS. 59,913,350.49. Out of the pleaded sum, the unsubstantiated invoice amounts in respect of the invoice of 4th December 2020 is deducted, that is TZS. 10,148,000/=. With this deduction, the balance of the due to the Plaintiff from the Defendant is TZS. 49,765,350.49. Under their contract, a penalty in the form of payment of interest at 12% per annum was agreed to be chargeable for late payment. The contractual terms contained in the invoices do not prescribe the period within which the invoiced sums should have been paid by the Defendant. The plaintiff has argued that the invoiced amounts were to be paid within 60 days but that 33 period was not substantiated anywhere by the Plaintiff. In this regard, I take it that the invoiced sums became due when the Plaintiff officially demanded for their payment by way of the demand letter. Exhibit P3 is the Plaintiff’s demand letter dated 22nd September, 2022 written by Lexcon Attorneys Law Company, to the Managing Director of the Defendant Company, claiming for payment of the unpaid invoices all the outstanding. According to the agreed terms and conditions in the Invoices, the whole outstanding amount of TZS. 49,765,350.49 shall accrue interest of 12% per annum. The interest thereon shall accrue as from 22nd September, 2022 when the amounts were officially demanded. Next, I will turn to general damages. In Anthony Ngoo & Another vs Kitinda Kimaro (Civil Appeal No. 25 of 2014) [2015] TZCA 269 (25 February 2015) it was held that: “According to Lord Macnaghten in Stroms v Hutchison 1905 A.C. 515, "general damages" are such as the law will presume to be the direct natural or probable consequence of the act complained of." While general damages are awarded at the discretion of the Court, the Court is required to give reasons in awarding the same. This is the rule 34 in the case of Alfred Fundi versus Geled mango and 2 others, Civil Appeal No.49 of 2017 decided by the Court of Appeal of Tanzania. In the present case, I find that payment of TZS 20,000,000/= is reasonable as general damages for the breach of contract. Since the Plaintiff is a business entity it could have generated profit from investment of the invoiced money had the defendant paid timely. Also, as the Plaintiff supplied the goods on credit trusting the Defendant, the failure by the defendant to pay for the supplied goods borders around breach of trust. Further, the Plaintiff made several efforts to have the amount paid peaceably such as by writing the Defendant e-mails and demand letter but all ended in vain. The Plaintiff deserves payment of general damages of TZS 20 million as a reasonable amount in the circumstances. The Plaintiff has claimed interest at the Court rate of 7% per annum on the decretal sum from the date of Judgment and Decree. I will grant it as it is since it is the minimum rate awardable. Costs follow the event. Therefore, costs of this suit shall be borne by defendant. In fine, the Court does hereby enter Judgment and Decree against the Defendant and in favour of the Plaintiff for Orders that: 35 (a) The Court does hereby declare that the Defendant is in breach of the supply of goods agreements she has with the Plaintiff; (b) The Defendant is ordered to pay the Plaintiff TZS. 49,765,350.49 being the outstanding unpaid debts for Plaintiff’s supply of polymers and other chemicals on credit; (c) The Defendant shall pay the Plaintiff contractual interest on the amount in (b) at the rate of 12% per annum from 22nd September 2022 to the date of Judgment and Decree. (d) The Defendant shall pay the Plaintiff TZS 20,000,000/= (TZS Twenty Million only) as general damages for the breach of supply agreement between them; (e) The Defendant shall pay the Plaintiff interest on the Decretal sum at the Court rate of 7% per annum from the date of delivery of Judgment and Decree to the date of full and final satisfaction thereof; (vi) Costs of the Suit shall be borne by the Defendant. It is so ordered. 36 A.H.GONZI JUDGE 30/08/2024 Judgment is delivered in Court this 30th day of August, 2024 in the presence of Mr. Oscar Millanzi, Learned Advocate for the Plaintiff also holding brief for Mr. Robert Rutaihwa, Learned Advocate, for the Defendant. A. H. GONZI JUDGE 30/08/2024 37