20060419 TZHC Dar es Salaam

IN THE HIGH COURT OF TANZANIA · AT DAR ES SALAAM CIVIL CASE NO. 91 OF 2004 TANZANIA PLANTATION AND AGRICULTURAL WORKERS PLAINTIFFS UNION (TPAWU) on behalf of JOSEPH KOPPA AND 35 OTHERS VERSUS 1. PRESIDENTIAL PARASTATAL SECTOR REFORM COMMISSION (PSRC) DEFENDANTS 2. GAWAL WHEAT FARMS LTD (GAWAL) Date of last order - 13/2/2006 Date of Ruling - 19/4/2006 RULING Oriyo, l. Gawal Wheat Farms Ltd entered into a Voluntary ) Agreement with its employees, namely Joseph Koppa and 35 others. The agreement was duly registered with the Industrial Court of Tanzania and became an Award. Gawal Wheat was a specified corporation and later placed under LART for liquidation. The plaintiffs sued the defendants for payment of shs.252,301,110/= being balance of payments due to the plaintiffs on the Voluntary Agreement. 1 'I The defendants disputed the claim and raised a preliminary objection that this court lacked jurisdiction to entertain the suit pursuant to the provisions of SECTION 19 of the LART ACT No. 6 of 1991. On the basis of the objection, the defendants prayed for the suit to be struck out with costs. With leave of the court, the parties submitted written submissions to dispose of the preliminary objection. Mr. Mwakajinga, learned counsel represented the plaintiffs and Mr. Chipeta learned counsel, advocated for the defendants. In support of the preliminary objection the defendants argued that upon being specified, Gawal Wheat Farms Ltd; was placed under PSRC for divestiture purposes. In the exercise of its statutory obligations under Section 41 (1) of the Public Corporations Act No. 2 of 1992 as amended, PSRC transferred GAWAL to the Loans and Advances Realization Trust (LART) for liquidation purposes. Their further argument was that GAWAL'S liquidator, LART, was established by the Loans and Advances Realization Trust Act No. 6 of 1991 (the LART Act) as amended. The LART Act also established. The LART Loans Recovery Tribunal (LART Tribunal) with a specific purpose of dealing with all disputes arising from the administration of the LART Act and to determine disputes on all matters transferred to LART. They 2 contended that in terms of the provisions of SECTION 19 (1) of the LART Act, the LART Tribunal is vested with exclusive jurisdiction to hear and determine all matters now related to GAWAL in liquidation under LART. It was the defendants submission that the jurisdiction of this court is therefore ousted by SECTION 19 (1) above. Defendants' further submitted that it is now settled that courts of law would not normally entertain a matter for which a special forum has been established, unless the aggrieved party can satisfy the court that no appropriate remedy is available in the special forum. It was contended that the remedy sought by the plaintiffs in this court are available in the LART Tribunal. To fortify the contention, it was submitted that pursuant to the provisions of SECTION 21 of the LART Act, the LART Tribunal has all the powers of this court and is enjoined to discharge its functions in accordance with the Rules of Natural Justice. Further the defendants submitted that Decisions of the LART Tribunal are appeallable to the Court of Appeal of Tanzania under SECTION 20 of the LART Act. The court was referred to several decisions of this court on the ouster of jurisdiction. These decisions included the cases of TANZANIA PLANTATION AND AGRICULTURAL WORKERS UNION on behalf of STANLEY KIMARO and 31 Others Vs. PSRC and Another, Civil Case No. 89/2004; TANZANIA PLANTATION AND AGRICULTURAL WORKERS 3 UNION on behalf of ABDULLAH MSINDA and 32 Others Vs. PSRC and Another, Civil Case No. 88/2004 (both of the Dar es Salaam District Registry and unreported). On the other hand, the plaintiffs contended forcefully that non-performing assets under SECTION 3 of LART Act are limited to loans, advances, interests and guarantees by banks or financial institutions and excludes contracts (agreements) which are not made by banks or financial institutions. Second contention was that the object of the LART Act was to protect banks and financial institutions as well as to speed up the hearing and finalization of cases against insolvent corporations. It was the plaintiff's view that their claims were not covered by the LART Act and as such SECTION 19 (1) above does not oust the jurisdiction of this court over their suit; their interest was to enforce the Award of the Industrial Court. They submitted in conclusion that the movables and immovables of GAWAL were not non- performing assets and could be attached to realize their claims. On the earlier decisions of this court cited above in which the plaintiffs were represented by the same counsel as in this case, Mr. Mwakajinga; and in both cases, plaintiffs arguments were overruled, it was the plaintiffs' opinion that this court stretched the law too far in those decisions. 4 In rejoinder, the defendants reiterated their earlier submissions and stated that the plaintiffs narrow interpretation of the law was incompatible with the law itself. The court was referred to the decision in the case of SHANNON REALITIES LTD VS. ST MICHAEL (1924) AC 185 at page 192 - 193 as authority on the basic principles of statutory interpretation that a provision of a statute should not be interpreted in isolation but as a part of the whole working system. The court was asked to adopt that approach. Now I have to determine whether I have jurisdiction to determine the pending suit or not. It is gratifying to note at this juncture that there is no dispute on the facts. The only dispute here is on the law; and in particular the LART Act. SECTION 19 (1) of the LART Act provides as hereunder:- "The Tribunal shall have exclusive jurisdiction to hear and determine all matters arising under this Act, or relating to any non performing assets transferred to the trust under this Act." (emphasis supplied) As correctly argued by the defendants, the plain construction of section 19 (1) above is very clear in that the LART Tribunal has exclusive jurisdiction over two categories of disputes namely:- s (i) to hear and determine all matters arising under the LART Act. (ii) to hear and determine all matters relating to any non performing assets transferred to LART. In this connection, the plaintiffs arguments that their claim is not a non-performing asset transferred to LART were not erroneous; as such. What was erroneous was their narrow interpretation of section 19 (1) in that they ignored the first part of the provision which covers all other disputes which arise under the LART Act. Had the plaintiffs done so, they would have realized that after GAWAL was placed under LART for liquidation and LART'S authority to liquidate GAWAL arises from the LART Act; then any claim or matter related to assets and liabilities of GAWAL is a matter arising under the LART Act; where the plaintiffs claim fall. For the reasons stated above, I hold that this courts jurisdiction over the suit is ousted by section 19 (1) of the LART Act. Therefore I sustain the preliminary objection that 6 • • I have no jurisdiction to determine the matter. The suit is incompetently in this court and is accordingly struck out with costs. K.K. Oriya JUDGE 19/4/2006 19/4/2006 Coram: Oriya, J. For the plaintiff - Absent For the 1st defendant - Msangi advocate For the 2 nd defendant - Absent C.C. Kallage Court: Ruling delivered in the presence of Mr. Msangi counsel for 1st defendant and in the absence of plaintiff and the 2 nd defendant. K.K. Oriya JUDGE 19/4/2006 7