T INTERNATIONAL CONTAINER VS A D CO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM MISC. COMMERCIAL APPLICATION NO. 130 OF 2023 (Arising from Commercial Case No. 120 of 2021) BETWEEN TANZANIA INTERNATIONAL CONTAINER TERMINAL SERVICES LIMITED................................. APPLICANT VERSUS A & D COMPANY LIMITED..................................... RESPONDENT RULING Date of Last Order: 16/02/2024 Date of Ruling: 21/03/2024 M KE HA,J: The present application is moving the court to be pleased lifting corporate veil of the respondent company so that execution proceedings can be allowed to proceed against Messrs. Rehmatullah Habib Rehmatullah, Feroz Habib Rehmatullah and Anderson B. Makubo. According to the affidavit supporting the Chamber Summons, the three persons were Directors and shareholders of the respondent at the time when transactions leading to 1 | P a ge the decree about to be executed, were concluded. The application is brought under sections 38, 68 (e) and 95 of the Civil Procedure Code. It is supported by an affidavit sworn by Mr. Frank Kifunda, the applicant's advocate. On the other hand, the application is contested through a counter affidavit affirmed by Ms. Victoria S. Mgonja, the respondent's counsel. When the application was called for hearing, Mr. Benedict Mayani learned advocate appeared for the applicant. On the other hand, Ms. Victoria Mgonja appeared for the respondent. When Mr. Mayani learned advocate was invited to argue the application, he merely adopted the contents of the affidavit supporting the application as part of his submissions. In terms of paragraphs 2, 3, 5, 6, 7 and 8 of the affidavit, when the applicant was about to procure a decree against the respondent, the Directors instituted winding up proceedings before this court. These happened to be the only shareholders of the respondent company. The affidavit indicates that, the said persons were in control of every activity of the company including but not limited to the breach of the Agreement in Commercial Case No. 120 of 2021. They remained being Directors up to when the decree in Commercial Case No. 120 of 2021 was issued. 2 | P a ge Ms. Mgonja learned advocate submitted in reply by adopting the contents of the counter affidavit in opposition of the application. In the said counter affidavit, all the contents of paragraphs 2, 3, 5,6, 7 and 8 of the applicant's affidavit are admitted. The learned advocate confirmed the fact that, winding up proceedings were under way. The only issue for determination is whether the applicant managed to demonstrate sufficient cause for lifting corporate veil. In terms of the decision in YUSUPH MANJI VS. EDWARD MASANJA & ANOTHER (2006) T.L.R. 127, before the decree holder succeeds in having the veil of incorporation lifted for purposes of execution of a decree he has to prove that, according to the circumstances prevailing at the time of making an application for execution of his decree, there is no real separation between the company and its owners. The decree holder has also to prove the company's actions which are wrong and fraudulent, say, concealing assets of the company or doing other acts calculated to obstruct execution of the decree against it and that, unless the veil of incorporation is lifted, the decree holder stands to suffer for not enjoying what the court decreed in his favour. 3 | P a ge The respondent could not dispute the fact that winding up proceedings had been initiated to wind up the respondent company. The learned advocate for the respondent submitted that, there were no more assets to cover the applicant's decree. No doubt, the winding up of the respondent is one of such acts which in the circumstances of this case, can be viewed as calculated to frustrate the execution process. These are sufficient reasons for ordering the lifting of veil of incorporation. I thus order the lifting of veil of incorporation to allow the applicant to proceed with execution of her decree against the Directors of the respondent named hereinabove. The application is granted. I make no order as to costs. DATED at DAR ES SALAAM this 21st day of MARCH 2024. Court: Ruling is delivered in the presence of t parties' advocates. c. p. EHA JUDGE 21/03/2024 4 | Page