CONSTITUTION MGOINGOLWA REGINA

IN THE HIGH COURT OF TANZANIA MAIN REGISTRY AT DAR ES SALAAM-SUBREGISTRY MISCELLANEOUS CIVIL CAUSE NO. 31097 OF 2024 IN THE MATTER OF THE CONSTITUTION OF THE UNITED REPUBLIC OF TANZANIA, 1977 AND IN THE MATTER OF THE BASIC RIGHTS AND DUTIES ENFORCEMENT ACT, CAP.3 R.E 2022 AND IN THE MATTER OF BASIC RIGHTS AND DUTIES ENFORCEMENT (PRACTICE AND PROCEDURE) RULES GN NO.304 OF 2014 AND IN THE MATTER OF A PETITION TO CHALLENGE THE PROVISION OF SECTION 18(1) (2) (ITEM 7 OF THE SCHEDULE OF IMPORT CONTROL ACT, CAP 276 R.E 2002 AS AMENDED BY THE FINANCE ACT 2024 IMPOSING INDUSTRIAL DEVELOPMENT LEVY OF CEMENT CLINKERS AS BEING UNCONSTITUTIONAL BETW EEN AMSONS INDUSTRIES (T) LIMITED---------------------------1ST PETITIONER FORTUNE CEMENT (T) LIMITED-------------------------------2ND PETITIONER VERSUS 1 THE HONOURABLE MINISTER OF TRADE AND INDUSTRIES --------------------------------------------1ST RESPONDENT THE ATTORNEY GENERAL------------------------------------2ND RESPONDENT RULING 23rd & 30th December 2024 MWANGA, J. This ruling concerns the determination of the petition's competence as required under Rules 9(1) and (2) of the Basic Rights and Duties Enforcement (Practice and Procedure), Rules 2014. That is, whether the petition is vexatious or frivolous. On the hearing date, the respondents raised five preliminary matters of law relating to the petition, which required my determination. The same reads as follows; i. The Petition is incompetent for contravening the provisions of S. 8(2) of the Basic Rights and Duties Enforcement Act [CAP 3 R.E 2019]. ii. The Petition is incompetent to contain redress, which is unattainable in the Constitutional Petition. 2 iii. The Petition is incompetent for lack of the Petitioner’s Locus Standi. iv. The Petition is incompetent for contravening the provisions of S. 6 (a), (b), and (e) of the Basic Rights and Duties Enforcement Act [CAP 3 R.E 2019]. v. The Petition is incompetent for being supported by a defective Affidavit containing extraneous matters contrary to Order XIX Rule 3(1) of the Civil Procedure Code [Cap 33 R.E 2019]. Before venturing to the determination of the points raised above, I find it pertinent to give a brief fact as per the petition and submissions from the parties. The petitioners, AMSONS INDUSTRIES (T) LIMITED and FORTUNE CEMENT (T) LIMITED, are legal persons duly incorporated in Tanzania with the business objective and mandate of owning and/or operating grinding cement production plants and/or factories within Tanzania. They are currently operating and/or producing cement with their plants/factories near Dar es Salaam City. While the 1st Petition produces the Camel Cement Brand at its factory in Mbagala Area, Dar es Salaam City, the 2nd Petitioner produces the Diamond Cement Brand at Mkuranga, Pwani Region. 3 The genesis of their petition is that, the petitioners are cement producers on their own. They assert that clinker is a key component in cement production. Thus, its availability and/or supply is a key determinant in the production and/or manufacturing process and the resultant pricing of the final product, i.e., the cement. Since their commissioning, the petitioners' grinding cement plants have had no clinker production facilities. Their cement factories essentially source clinkers outside the country through the Dar es Salaam Port in Dar es Salaam. As further alleged, the clinker production facilities in a cement factory or plant, though interconnected, are separate and massive investment undertakings that most producers, especially small producers, including the petitioners, do not have. Instead, the Petitioners’ cement factories have for years used clinker primarily imported from overseas and a small part from local producers within Tanzania who are also cement producers on their own. Their cement factories are integrated plants with clinker production facilities and thus are in direct competition with the Petitioners. Petitioners further claim that, the sourcing of clinker locally by the Petitioners has always been problematic and, as such, suicidal to their business in that, whether deliberate or not, local clinker prices are very 4 high, making it challenging for grinding cement factories (without clinker production facilities) to compete effectively, the reality which is compounded by the fact that the said clinker producers and/or supplier are also cement producers and hence competitors as well. While facing tough competition in finished goods, the Petitioners' reliance on local clinker supply raises concerns about quantity, quality, and pricing security. According to them, the supplier who is a competitor will always take advantage of the quantity and quality factors to have the ultimate pricing of the final product in his favor and outmanoeuvre his opponent and/or competitor. Also, that reliance on local clinker supply poses formidable cash flow challenges. It is further asserted that, unlike imported clinker suppliers that offer favorable credit terms of up to 180 days, local clinker producers demand 100% upfront payment with no flexibility. More or so, being small cement producers made to source their clinker locally and from competitors negatively impacts their cash flow and financial planning. Apart from that, local clinker sourcing poses quality and operational efficiency challenges and/or problems as opposed to imported clinker, which consistently demonstrates superior quality across various parameters, and the ease of bulk transportation from the Dar es Salaam 5 Port contrasts sharply with the logistical challenges of transporting locally produced clinkers over a long distance. Also, because the local suppliers are competitors, the available clinkers for supply to small cement producers are always inferior. Hence, double standards by the local suppliers cannot be ruled out. They use superior quality for their productions and supply inferior products for others to buy. Likewise, the local clinker suppliers produce clinker within their integrated cement plants and hence have no logistical challenges of transporting them (for their cement production). Henceforth, it gives them an overwhelming edge in pricing the final product. Besides, clinker is naturally bulky, and smaller cement producers with non-integrated plants like the Petitioners located in Dar es Salaam have a vast operation challenge to transport clinker from Tanga or Kilwa (the current source of supply of clinker), a distance of 330km and 600km respectively daily, which significantly impacts negatively on the operational efficiency of the Petitioners. Similarly, the Petitioners currently source their clinker overseas, and hence, transport logistics for transporting clinker are limited to 10 – 30km from Dar es Salaam Port. In contrast, the local clinker suppliers cause 6 huge liability and supply consistency issues for small cement producers, the petitioners included. Equally, local suppliers sell their clinkers on an ex-factory basis, shifting the liability for transportation to buyers (like the petitioners) over extensive distances, leading to operational/handling costs and/or challenges. Local suppliers of clinker do not guarantee supply consistency and, thus, owing to unplanned shutdowns (which are rampant), adversely affect operations and/or production of the Petitioners. Petitioners alleges further that, much as they do have issues with the government's drive towards the spirit and principle of local content and, hence, promoting local industrialization, the imposition of the impugned levy is unconstitutional. It is stressed that shifting sourcing from the current overseas suppliers to local suppliers will significantly disrupt the small cement producers, ultimately driving them out of production and placing them at the mercy of integrated cement plant producers and their competitors. Additionally, the introduced levy interferes with the market forces in the industry in a discriminatory and predatory manner. And that the intended effects of the levy are not proportional to the negative impact they cause. Further, the levy does not set mechanisms against abuse by the local suppliers regarding the availability, quantity, and quality of 7 Clinker to be supplied and the terms and conditions thereof. Hence, it is burdensome that Petitioners and other producers in a similar category will close down for lack of clinker, as evidenced in the years 2016 – 17. That on 31st January 2024, upon learning that the 1st Respondent was preparing for the imposition of the impugned levy to be tabled to the Parliament of the URT Budgetary Session, the Petitioners wrote to the Confederation of Tanzania Industries, an umbrella association of industries where they are members, to raise the concerns and consequences of the measures that were to be imposed by the 1 st Respondent. In addition, on 28 June 2024, the Parliament of the URT, upon being moved by the Respondents, passed the impugned levy as part of the Finance Act 2024. On 10 July 2024, the Petitioners wrote to the 1 st Respondent, raising its complaints in the enacted levy, the subject of complaint herein. However, the 1st Respondent remained silent and gave no response. Given the above facts, the petitioners are proclaiming that the introduced section 18A (1) and (2) (Item 7 of the Schedule) of the Import Control Act Cap 276 is discriminatory, infringes petitioners right to work, 8 right to participate fully in the process leading to the decision affecting them and their wellbeing and the nation. For ease of reference, the prayers are couched in the following mode; a) That the act by the Government of the United Republic of Tanzania introducing industrial levy on goods u/s 18A “CEMENT CLINKERS HS CODE 2523:10.00” in the Finance Act, 2024 by amending Section 18A (1) and (2) (Item 7 of the Schedule) of the Import Control Act Cap 276, is biased, unilateral and discriminatory contrary to the provisions of Article 13(2) of the Constitution of United Republic of Tanzania of 1977 as amended (hereinafter called “the URT Constitution”). b) The act by the Government of the United Republic of Tanzania introducing industrial levy on goods u/s 18A “CEMENT CLINKERS HS CODE 2523:10.00” in the Finance Act, 2024 by amending Section 18A (1) and (2) (Item 7 of the Schedule) of the Import Control Act Cap 276, infringes the Petitioners’ right to work and earn a livelihood contrary to the provisions of Article 22 of the URT Constitution. 9 c) The act by the Government of the United Republic of Tanzania introducing industrial levy on goods u/s 18A “CEMENT CLINKERS HS CODE 2523:10.00” in the Finance Act, 2024 by amending Section 18A (1) and (2) ( Item 7 of the Schedule) of the Import Control Act Cap 276, without stakeholders consultation and/or engagement infringes the Petitioners’ right to participate fully in the process leading to the decision affecting them and their wellbeing and the nation contrary to the provisions of Article 21(2) of the URT Constitution. d) Any other reliefs this honorable court deems fit to grant. e) Each party is to bear its costs. During hearing of the Preliminary objections, the respondents were represented by Ms. Narindwa Sekimanga, SSA, assisted by Lucy Kimaro, SA, and Wisdom Francis, SA. In contrast, the petitioners enjoyed the service of Mr. Alex Mgongolwa, assisted by Mr. Sostenes Mbedule Karage Rashid & Mr. Kenedy Mgongolwa, and Mr. Nabori Mdemu, both learned counsels. Submitting on the first Preliminary objection, Ms. Narindwa, SSA, said the present petition is incompetent, per section 8 (2) of BRADEA. It 10 contains the grievances or complaints that could have been addressed by the Fair Competition Commission and not by a constitutional petition. She added that, as evidenced in paragraphs 1 (a), 8 (a) & 8 (b) of the petition, on particulars relied on and paragraphs 9 (a) – (e) of the originating summons, the petitioners are supposed to complain about the competition in the market as the central issue of the petitioners is the lack of clinker compared to other cement producers and so, they complain about an unfair advantage over others. The learned state Attorney supported her contention with the case of Tanzania Cigarette Company Ltd vs. Fair Competition Commission & AG, Miscellaneous Civil Cause No. 31 of 2010, in which it was stated that, the party shall first exhaust that remedy if the alternative forum is provided. Per contra, Mr. Alex Mgongolwa, learned counsel, refuted such contention. He insists that, at this stage, this court is mandated to investigate the vexatiousness or frivolousness of the petition. He invited the court to visit the definition of Vexatious as provided in the Black Law Dictionary, 8th Edition: thus "Vexatious” means a party bringing the petition is not bonafide and merely intends to embarrass the opponents. on the other hand, “Frivolous” means not having a serious purpose. 11 Replying to the preliminary point raised, the counsel believes that, in essence, the purpose of this petition is to challenge the provision of section 18 A 1 and (2) of the Import Control Act as amended by the Finance Act. He emphasized that, what is before the court is an Act that came into operation on 1/7/2024, whereas fair competition has no power to declare a provision of the law unconstitutional. He said it is the prerogative power of the High Court to declare any law or provision unconstitutional as per Article 64 (5) of the Constitution. Hence, this petition is in the right place to be determined, not any other forum. Therefore, the HC has to construe the constitution's article on unfairness, discrimination, and unjust provisions. While aligning his argument with the present petition, the counsel emphasized that, it clearly stated that the petitioners are in the cement production industry and that the impugned law intends to discriminate against them. The law's unfairness and discriminatory nature are being challenged. On the grounds of the petition, he insisted that paragraphs 1 (a) and (b) have practical issues to be determined. Mr. Mbedule distinguished the case of Cigarette Ltd vs. Fair Competition(supra), which states that they are challenging the law about the production or importation of 12 clinkers, which is already in operation. Hence, fair competition is not an appropriate forum. In rejoinder, Ms. Lucy Kimario argued that, this court cannot determine whether the petitions are discriminatory in the market process because Economists must conduct the research. Hence, the petitioners should exhaust the remedy in the fair competition market before coming to this court. Otherwise, the petitioners would move the court to deal with business intricacies. Regarding the second Preliminary objection, Ms. Narindwa argued that, the petitioners' prayers in paragraphs a, b, and c complain about the government's act of introducing an Industrial levy on imported goods, including clinker. Given that, if the government's act is unlawful, it cannot be termed unconstitutional. The state Attorney referred the case of Freemann Aikael Mbowe vs. Director of Public Prosecutions & 2 others, Civil Appeal No. 382 of 2021, stating that the petitioners should have sought judicial review and not constitutional petition if at all, they are complaining about the government's actions. On the other hand, Mr. Alex Mgongolwa submitted that, the State Attorney misconceived the word “act.” To him, it is about the enactment 13 of the law as opposed to verbal actions. He said, the government introduced the bill and took it to parliament for enactment. Then, the law was put into operation. He was insistent that, the remedy available is to declare that the law is unconstitutional on that score; the case of Freeman Aikael Mbowe is irrelevant. Mr. Mbedule insisted that, the case of Aikael Mbowe vs DPP is distinguishable as on page 11, the case was about the actions of the DPP, whereas the petition intend to challenge the law. In rejoinder, Ms. Lucy reiterated her earlier position that the petitioners are challenging the government's “act,” which must be challenged by judicial review. According to her, a constitutional court cannot award such redress, and there is no prayer that this court shall declare a provision of the law unconstitutional. More or less, the third point of objection is about locus standi. Ms. Narindwa said the petitioners are a corporate body and do not have Locus Standi to bring the constitutional petition that their rights from article 12 – 29 have been infringed. She cited the case of Tanzania Epilepsy Organisation Vs. AG, Miscellaneous Civil Casuse No. 5 of 2022, which states that the petitioners cannot be personally affected by infringing their rights. Hence, they do not have locus standi to file the petition. In rebuttal, Mr. Mbedule, stated that the above case is distinguishable as it challenged 14 section 39 of the LMA, which the organization was not licensed to deal with in marriage issues. In rejoinder, Ms. Lucy Kimario said that to have a locus standi, one has to have interests and rights. Since companies are not human beings, the BRADEA law does not accommodate them because it concerns human rights, not corporate ones. Rights against discrimination cannot be enjoyed by a corporate body. Next in line is the fourth Preliminary objection, where Ms. Narindwa contends that, the petition contains sections 6 (a), (b), and (e) of BRADEA. The petitioners do not have an address, particulars of the facts & no evidence—name and address of the respondents. In originating a summons, the particular facts contain proof. Mr. Alex Mgongolwa argued that, on page 4 of the originating summons, the entire paragraph shows particulars of facts, and no exhibit is attached. They are facts only. He added the purpose of the provision is to give addresses you can serve to parties. One cannot be at fault for not following the format they may know only. All the requirements are provided for. Hence, the preliminary objections be overruled. In rejoinder, Ms. Lucy Kimario learned that the State Attorney dropped her 15 argument on the relevance of the Pos in sections 6 (a) and (b) but maintained section 6(e) of BRADEA. She sustained that the particular facts contained evidence in originating a summons. The fifth and last point of objection is that affidavits supporting the petition are defective in containing extraneous matters. It is argued that, the affidavit of Ahmed Hassan Abdallah in paragraphs 11, 12 & 13 includes arguments & opinions—likewise, the testimony of the first petitioner, Ayub Minja. According to the state attorney, this contradicts Order 19, Rule 3 (1) of CPC—the case of Tanzania Epilepsy Organisation Vs. AG (supra) was also referred to on pages 17, 18, 19 & 20. She concluded that, the affidavit is defective, which makes the petition incompetent. Therefore, the petition is to be struck out with costs. On the other hand, Mr. Alex Mgingolwa controverted such an argument. He said whether there is extraneous matter in the affidavits or not, is a question of evidence. Hence, this cannot be judged as Preliminary Objection at this stage. He further asserted that this is the petitioner's case; therefore, respondents cannot choose what to say. The counsel added that Order 19 Rule 1 talks of the affidavit about temporary orders. It says an affidavit is a substitute for oral evidence. Therefore, it should be confined to matter within one’s knowledge. All pleaded is within the 16 knowledge of the deponent. On winding up, the counsel prayed that all five Preliminary Objections be overruled for lack of merits. Ms. Lucy rejoined that extraneous matter reflects arguments and opinions. She referred to the case of Epilepsy(supra) on page 21. According to her, the extraneous matters include objections, prayers, and conclusions, and the remedy is to expunge these paragraphs. To her, the affidavit shall comply with Order 19, Rule 3 of the CPC, hence, particulars of fact containing evidence are contrary to the law. I have reviewed the petition and submissions of the parties on the respective points of objection. As the parties rightly observed, under Rule 9(1) and (2) of the Basic Rights and Duties Enforcement (Practice and Procedure), Rules 2014, I have to determine whether the petition is vexatious or frivolous. Given this, at this stage, I must, of course, refrain from making any determination on the merits or demerits of the petition. A decision on the merits or demerits of the same must await the substantive consideration of the facts and applicable law after a full hearing before a bench of three judges. In determining the merit or otherwise of the preliminary objections, I wish to start with second point of objection that the Petition contains unattainable redress in the constitutional petition. I have gone through 17 the originating summons as presented by the petitioners. Prayers sought in paragraphs a, b, and c are for this court to declare that the act by the Government of the United Republic of Tanzania introducing an industrial levy on goods u/s 18A “CEMENT CLINKERS HS CODE 2523:10.00” in the Finance Act, 2024 by amending Section 18A (1) and (2) (Item 7 of the Schedule) of the Import Control Act Cap 276, is biased, unilateral and discriminatory contrary to the provisions of Article 13(2); infringes the Petitioners’ right to work and earn a livelihood contrary to Article 22; and infringes the Petitioners’ right to participate fully in the process leading to the decision affecting them and their wellbeing and the nation contrary to the provisions of Article 21(2), both of the Constitution of United Republic of Tanzania of 1977 as amended (hereinafter called “ the URT Constitution ” ). In my understanding of the prayers sought, the petitioners seek to challenge the action of the government introduces such legislation. Section 4 of the interpretation of Laws Act, Cap. 1 defines the word “act” as used in the prayers of the petitioners as “ “act” when used with reference to an offence or civil wrong, includes an omission and extends to a series of acts or omissions or a series of acts and omissions.” 18 From the above law extract, the word “act” is used as a verb action instead of the word “Act,” which connotes legislation or an Act of Parliament. The exact section 4 of the Interpretation of Laws Act defines “Act” as; “…“Act,” when used with reference to legislation, means any Act, Decree, or Ordinance passed by the Parliament of the United Republic or, as the case may be, the House of Representatives of Zanzibar or by any Council previously having authority or power to pass laws in Tanzania or, as the case may be, Zanzibar, such Act, Decree or Ordinance having been assented to by or on behalf of the President or other proper legislative authority but does not include an Act of the Community.” Given the above provision of the laws, I disagree with Mr. Alex's counsel that the word "act" used in the prayers sought refers to an act of parliament. On the other hand, I entirely agree with Ms. Narindwa and Lucy, the state Attorneys that the prayers sought connotes that, the petitioners want to challenge the government's actions by introducing the said legislation, which another forum could do, and not an act of challenging the Act of parliament. 19 That being said and done, this point alone suggests that the petition is in bad shape. It is, therefore, vexatious and frivolous. Since this point has succeeded in throwing out the petition, I do not find a need to determine other preliminary points for academic exercise. Given the above, the petition is struck out. Each party is to bear its costs, and it is ordered accordingly. Dated at Dar es Salaam this 30th day of December, 2024 MWANGA J JUDGE 30/12/2024 COURT: The ruling delivered on 30th December 2024 in the presence of Adv—Kalaghe Rashid, who also hold brief of advocate Seni Malimi; Alex Mgingoilwa and Sosten Mbedule Advs for Petitioners and Ms. Lucy Kimario for the Respondents. MWANGA JUDGE 30/12/2024 20