20101107 TZCA Dar es Salaam

IN THE COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM (CORAM: MUNUO, l.A., MASSATI, l.A., And MANDIA, ].A.) CIVIL APPLICATION NO. 126 of 2010 TANZANIA INVESTMENT BANK LTD ............................................. APPLICANT . VERSUS MEIS INDUSTRIES COMPANY LTD ...................................... 1ST RESPONDENT. THE GOVERNMENT OF THE GREAT SOCIALIST PEOPLES' LIBYAN ARAB lAMAHIRIYAN ................................. ~ ............ 2No RESPONDENT (Application for the Revision from the Judgment/Decision of the High Court of Tanzania at Dar es Salaam) {Karua, l.) dated the 27th day of October, 2010 in Civil Appeal No. 124 of 2010 RULING OF THE COURT 06 th November & 14th December, 2010 MUNUO, J.A: The applicant, Tanzania Investment Bank Ltd, brought a notice of motion under section 4 (3) of the Appellate Jurisdiction Act, 1979 (as amended), Cap 141 R.E. 2002 and Rules 48 (1) and 65 (1) of the Court of Appeal Rules, 2009 moving the Court to:- ·· 1 . 1. Call for and inspect the record of the High Court in Civil Case No. 124 of 2010 to be examined to satisfy itself as to legality correctness and propriety of the decision made therein; 2. Set aside the said judgement and decree, and nullify the proceedings; 3.. Award costs; and 4. Any other relief deemed fit by the Court. The application was made on two grounds namely:- 1. That the judgement and decree thereto is problematic; 2. That there is an apparent error on the face of the record of the High Court in that it ordered . specific performance of a non- existent contract; 3. That the applicant a necessary party was not joined to the suit; and 4. That the Z1d Respondent was duly served. 2 At the commencement of the hearing, Mr. Swai, learned advocate, represented the applicant. He deponed to an affidavit in support of the revision. The 1st Respondent decree holder, MEIS Industries Company Ltd, sued· the 2nd Respondent, officially known as the Great Socialist Peoples' Libyan Arab Jamahiriyan in Civil Case No 124 of 2010 in the High Court of Tanzania, DSM Registry, for breach of contract and prayed for the II following orders: a) A declaratory order that the 2nd respondent's refusal and or default to disburse and cause the release in favour of the 1st Respondent in Tanzanian currency equivalent to US $ 20,000,000/= for his accrued interest currently held in Account no. 004-200-000 2216-01 at the Tanzania Investment Bank (TIB) is unreasonable, unfair, arbitrary and unjustifiably injurious to the 1st Respondent. b) An order for the immediate disbursement or release in favour of the 1st Respondent of the said amount of Tanzanian shilling equivalent to 3 US $ 20 million plus accrued interest from account no. 004-200- 0002216-01 held at TIB. c) Payment of general damages at the court's discretion. d) Payment of interest on the decretal sum at the Court's rate of 12% per annum from the date of judgement till full payment; e) Costs of the suit; and f) Any other relief deemed fit by the Court. The case giving rise to the revision started as Civil Case No. 124 of 2010 in the High Court of Tanzania, Dar es Salaam Registry. The parties to the said suit were the 1st Respondent, then the plaintiff, and now the decree holder. The defendant was the 2nd Respondent. The applicant, Tanzania Investment Bank, was not a party to the said suit. The record of the trial High Court shows that the suit proceeded ex parte under Order VIII Rule 14 (2) (b) of the Civil Procedure Code, Cap. 33 R.E. 2002, upon the default of the 2nd Respondent to appear and defend the action despite having been duly served. 4 .. The facts of the case are not complicated. On 20th July, 2005 the government of the United Republic of Tanzania executed a Debt Swap Agreement which was later amended by an Addendum No. 1 dated 4th March, 2009, annexture A to the· affidavit in support of the revision. Articles 4.02 and 4.03 are relevant in this matter; 4. 02 the amount of Tanzania shillings equivalent to United State Dollars Twenty Million (say US$ 20,000,000) plus accrued interest currently held at the Tanzania Investment Bank Account no. 004- 200-0002216-01 shall be advanced to MEIS Industries for a cement factory to be constructed in Lindi. 4. 03 Subject to article 4. 02. . MEIS shall repay the loan plus accrued interest to Account no.· 004-200- 0002216-01 held at Tanzania Investment Bank within the terms to be agreed upon between the parties herein mentioned and MEIS Industries. 5 ., I ........, Subsequently, the Ministry of Foreign Affairs of Tanzania, the Bank of Tanzania, the Tanzania Investment Bank, both Respondents and the President's Office held consultative meetings on 9th June, 2009 and 10th June, 2009 per the minutes drawn, Exhibit PS (as reflected in the judgment of the High Court at page 9). Following the consultative meetings, the Investment Agreement was drawn. The applicant annexed Addendum no. 1 and the Investment Agreement to the affidavit in support of the application as annexture LLA -3. The 1st Respondent, MEIS signed the Investment Agreement. So did the government of the United Republic of Tanzania and the Tanzania Investment Bank. The 2nd Respondent, the government of Libya did not . sign the Investment Agreement. However, the 2nd Respondent had, in the course of consultations approved the Lindi Cement Project to be executed by MEIS from the funds in Account no. 004-200-0002216-01 in the Tanzania Investment Bank. Because the 2nd Respondent declined to sign the material Investment Agreement, the 1st Respondent filed Civil Case no. 124 of 2010 seeking specific performance. The learned judge entered judgment for the 1st Respondent. 6 .. A Drawn Order extracted from the judgement was addressed to the Director General of the Tanzania Investment Bank Ltd ordering the bank to disburse the funds in Account no. 004-200-0002216-01 to the 1st Respondent upon the 1st Respondent "Decree Holder abiding by the conditions of the facility as spelt out in the Investment Agreement." The executing court also issued a Notice to show cause to the applicant bank, annexture B to the Reply Affidavit. The Notice to show cause states, inter -alia; 'Wotice to show cause Why Execution should not issue (0.21) In the High Court of Tanzania District Registry at Dar es Salaam. CIVIL CASE NO. 124 of 2010 .. Whereas the Decree holder, the plaintiff above named has made an application to the court for 7 execution ol the Decree passed against you on the 2;th day of October ?010 in this action. You are hereby required to appear before this court on the :ld day of Novembe~ 2010 at 12.00 o'clock in the forenoon either in person or by an advocate to show cause why execution should not • N issue.... The applicant did not, and has not responded to the above Notice to show cause. Instead, the applicant instituted this revision. He, nonetheless conceded that provided the money is disbursed at the exchange rate prevailing at the material time, and provided the bank got its due management fee as stipulated in the Investment Agreement, the applicant would have no objection to releasing the funds to the 1st Respondent as per the terms of the said agreement. Counsel for the applicant further complained that by not being joined in the suit, the bank was condemned unheard which is contrary to the 8 natural justice principle of giving a party a hearing before taking adverse action against him or her. Hence, Mr. Swai urged us to nullity the proceedings, judgement and decree of the High Court. He also prayed for costs for the revision. Denying that the applicant had been condemned unheard, Mr. Kamara maintained that the 1st Respondent had no cause of action against the bank which was why the bank was not joined to the suit. The bank's interests under the Investment Agreement, counsel observed, were provided for under the said agreement so the bank suffered no prejudice by not being joined to the action . .Reiterating that the 1st Respondent had no cause of action against the bank, Mr. Kamara referred us to the case of Ami Mpungwe versus Ahas Sykes, Civil Appeal No. 67 of 2000 (CA) (unreported) wherein the Court held that where there is a cause of action, the plaintiff has the discretion to choose who to sue. 9 , . ., Refuting that the bank had been condemned unheard, Mr. Kamara cited the case of Investment Power Tanzania Ltd and the matter of the Companies Act (Cap. 202 R.E. 2002) and in the matter of a Petition by a Creditor of an administration order by Standard Chartered Bank (Hong Kong) Ltd. (Petitioner) Civil Application No. 1 of 2009 (CA) (unreported) wherein the Court considered the right to be heard. The Court held that · the right to be heard is recognized by Article 13 (6) (a) of the Constitution of the United Republic of Tanzania which states, inter- alia; 11 13 (6) (a) To ensure equality before the law, the State Authority shall make procedures which are appropriate or which take into account the following principles; namely:- a) When the rights and duties of any person are being determined by the court or any other agency, that person shall be entitled to a fair hearing and the rights of appeal or other legal remedy against the . ,, decision of the court or of the other agency ,, concerned.... Holding that it is a principle of natural justice to give a party a hearing before taking adverse action against him or her, the Court re-affirmed the decision in the case of Abbas Sherally and Another versus Abdul Sultan Haji Mohamed Fazalboy, Civil Application No. 38 of 2002 (CA) (unreported) in which the Court observed that:- "The right of a party to be heard before adverse action or decision is taken against such a party has been stated and emphasized by the courts in numerous decisions. That right is so basic that a decision which is arrived at in violation of it will be nullified, even if the same decision would have been reached had the party been heard, because the violation is considered to be a breach of natural Justice." 11 Counsel for the 1st Respondent cited the cases IPTL cited supra; Maisha Machunguzi versus Saab Scania Tanzania Branch, Civil Appeal No. 4 of 1998 (CA at Mwanza) at page 4 (unreported); and Elisa Mosses Msaki versus Yesaya Ngateu Matee (1990) TLR 90 (CA) in which the court held that only matters canvassed in the trial would be entertained on appeal or revision. The disbursement of the funds was not dealt with by the executing court, counsel for the 1st Respondent pointed out so the revision is premature. Furthermore, counsel for the 1st Respondent argued, the bank's role is to administer the funds in terms of the provisions of the Investment Agreement. He referred us to the case of the Bank of Tanzania versus Devram P. Valamblia Civil Application No. 15 of 2002 (CA) (unreported) at pages 13-14 wherein the court held that it is not the responsibility of the bank to contest garnishee orders (here Drawn Orders) in cases where the bank is not a party to the suit. On the disputed Drawn Order, counsel for the 1st Respondent referred us to the provisions of section 38 (1) of the Civil Procedure Code, Cap. 33 R.E. 2002 which vests in the executing court, power to adjudicate on matters relating to the decree by stating; 12 ''38 (1) All questions arising between the parties to the suit in which the decree was passed or their representatives and relating to the execution, discharge or satisfaction_ of the decree, shall be determined by the court executing the decree and not by a separate suit ,✓ Contending that the revision is not properly before the court, counsel for the 1st Respondent urged us to dismiss the said revision with costs. The issue is whether this revision is competent. Section 4 of the Appellate Jurisdiction Act, 1979 Cap. 141 R.E. 2002 as amended provides for revision thus- "4. (1) The Court of Appeal shall have Jurisdiction to hear and 13 determine appeals from the High Court and from subordinate courts with extended jurisdiction. (2} For all purposes of and incidental to the hearing and determination of any appeal in the exercise of the jurisdiction conferred by this Act the Court of Appeal shall, in addition to any other power, authority and jurisdiction conferred by this Act have the power of revision and the power, authority and jurisdiction vested in the court from which the appeal is brought. (3) without prejudice to subsection (2), the Court of Appeal shall have the power, authority and jurisdiction to call for and examine the record of any proceeding before the High Court for the purpose of satisfying it self as to the correctness, legality or propriety of any finding, order or any other decision · made thereon and as to the regularity of any proceedings of the High Court. " 14 • The present revision was brought under the provisions of section 4(3) of the Appellate Jurisdiction Act. However, the subject matter of the revision had not been entertained by the High Court. Had the applicant positively responded to the Notice to show cause, the executing court would have had an opportunity to address the complaints raised by the applicant in this revision. The matter would not have ended there. If the applicant were not satisfied with the orders of the executing court, it would then seek I, revision in the court. It is clear from the decisions in the cases Mosses Msaki versus Yesaya Ngateu Matee (1990) TLR 90 (CA); Maisha Machunguzi versus Saab Scania Tanzania Branch; and Independent Power Tanzania Limited cited supra that matters not raised at the trial or appeal in the High Court would not be entertained by the Court of Appeal on revision. We are satisfied that the subject matter of the revision before us has not been dealt with by the executing court. Under the circumstances, we agree with counsel for the 1st Respondent that the revision before us is premature. We accordingly dismiss the revision with costs. 15 . " \ DATED at DAR ES SALAAM this ih day of November, 2010 E.N.MUNUO JUSTICE OF APPEAL S. A. MASSATI . JUSTICE OF APPEAL W. S. MANDIA JUSTICE OF APPEAL I certify that this is a true copy of the original. 16