arusha blooms ltd another vs tib development bank ltd others 2019 tzhc 120 31 october 2019

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (DAR ES SALAAM DISTRICT REGISTRY)

AT DAR ES SALAAM MISC. CIVIL APPLICATION CAUSE NO. 809 OF 2018

IN THE MATTER OF ARBITRATION AND IN THE MATTER OF ARBITRATION ACT, [CAP 15 R. E. 2002]

BETWEEN ARUSHA BLOOMS LIMITED....................................1st PETITIONER (UNDER RECEIVERSHIP) FELIX MREMA.......................................................... 2nd PETITIONER

VERSUS TIB DEVELOPMENT BANK LIMITED..................... 1st RESPONDENT DANIEL WELWEL (JOINT RECEIVER AND MANAGER OF ARUSHA BLOOMS LIMITED........... 2nd RESPONDENT VINTAN MBIRO, (JOINT RECEIVER AND MANAGER OF ARUSHA BLOOMS LIMITED.... .......3rd RESPONDENT

RULING Date of last order: 16/07/2019 Date of ruling:31/10/2019 MLYAMBINA, 3 . This petition has been preferred under Sections 3 and 21 (d) o f the A rbitration Act, Cap 15 [R.E. 2002], Rules 5, 10 and 11 o f the A rbitration Rules, Section 2 (3) o f the judicature and application o f Laws Act, Cap 1 R.E. 2002 and Section 95 o f the C iv il Procedure Code Act, Cap 33 [R.E. 2002]. The petitioners prayed for the following orders: 1. That, the dispute between the petitioners and 1st respondent be referred to arbitration. i 2. That, the 1st respondent to participate fully in the arbitration process already commenced by petitioners at national construction council.

3. Transfer of ownership of the 1st applicant's farm no. 140/1/1 and farm no. 140/1/2 Chekereni, Arumeru District, Arusha be stayed pending final disposal of arbitration between the applicants and the 1st respondent.

4. Costs of this petition be provided for. When answering to the petition, the respondents raised five plea in lim ine litis namely: i. That, there is no citation of enabling provision of the law. ii. That, the 1st petitioners (under receiver ship) cannot take out proceedings without the receivers and or their consent. iii. That, the 2nd petitioner has no power to sign petition for the 1st petitioner. iv. That, the second petitioner has no locus standi and cause of action against the respondents. v. That, the suit has been overtaken by events. On the non citation of the law legal point of objection, as properly submitted by the petitioners, there is no any specific provision of the law in our jurisdiction which empowers the Court to grant the reliefs sought. As such and as held in the case o f N orconsult v. Tanzania N ational Roads Agency, Misc. Commercial Application No. 10 of 2008 (unreported), Section 2 (3) o f the JALA is relevant in filling such lacunae. Indeed, Section 3 of the 2 Arbitration Act is the bedrock on which a process to access to arbitration can be based. Needless the above observation, even if I could agree with the respondent's that the petitioners have not cited the enabling provision, it is the current law of the land that Courts should uphold the overriding objective principle and disregard minor irregularities and unnecessary technicalities so as

to abide with the need to achieve substantive justice. That proposition of the law is well reflected in the provision of Section 6 o f the W ritten Laws Miscellaneous Amendment A ct No. 3 o f 2018. Through the Court of Appeal Rules are not applicable to this Court, the Court can borrow the wisdom contained under the Tanzania Court of Appeal (Amendment) Rules G.N No. 345 of 2019 in particular Rule 9 which amendment reads: "Provided that where an application om its to cite any specific provision o f the law or cites wrong provision , but the jurisdiction to grant the order sought exists, the irregularity or om ission can be ignored and the Court m ay order that the correct law be inserted." Again, the omission to cite enabling provision of the law (if any) does not necessarily have to touch the interests of the parties by barring them to bet justice before the Court. In the case of Jacob Magoiga Gichere v. Penina Yusuph, Juma C. J stressed on oxygen principle which has been brought by the written laws (Misc. Amendment) Act No. 3 of 2018. It requires the Courts to deal with cases justly with regard to substantive justice. As such, the first ground of objection is devoid of merits. I equally find the second, third and fourth grounds of objection to lack eight on the reasons stated by the petitioners. That, one, the powers vested unto a receiver and manager under the provisions of

Section 253 (e) and 416 (1) o f the Com panies Act, Cap 212 (R .E 2002) are merely in connection with actions taken against an outsider. There is no any specific provision that covers a situation where the intended legal action or proceedings are to be taken against the receiver and managers as it applies in this matter. The respondents have argued that the 1st petitioner ought to have sought and obtained consent of receivers before lodging the petition against them. This is not a proper legal argument because the law bars person to be judges of their own case " Nemo Judex in Causa Sua". As it was held in the cited case of K obii Tanzania Ltd v. Mariam Kisangi T/A Mnafu Traders, Misc. Commercial Application No. 12 of 2007 (unreported), in situation where there is no procedure to cater for certain situation, the Court is obliged to use its common sense, justice, equity and good conscience and resolve the problem before it to further the interests and prevent abuse of the process. Two, the 2nd petitioner being the statutory director and majority shareholder of the 1st petitioner had the mandate to sign the petition on her behalf. Three, the 2nd petitioner being the majority shareholder of the 1st petitioner has got both legal and equitable interest on the 1st petitioner and her assets as well. 4 As regards the last point of objection, it was the respondent submission that this

petition has been overtaken by events. Thus, one of the relief (s) sought by the petitioners at paragraph 21 of their petition is for the order to preserve the subject matter pending commencement and finality of their arbitration sought. It was the respondent's submission that the said properties have already been disposed of and the title has already passed so as to realize the outstanding loan which was due as was advertised by TIB Development Bank on 21st April and 4th June, 2018 respectively. In view of the respondents there is nothing this Court can do to preserve the subject matter at this stage since the same could serve no practical purposes. To buttress their submission, the respondents cited the case of Shabiri Ebrahim an d 2 O thers v. Seiem an Rajabu M izino and Registrar of Titles Civil Application No. 40 of 2007 (CAT) in which the Court cited the case of Joachim Ka/embe V. M. K Mwamtima and S h e ll and B. P Tanzania Ltd v. The U niversity o f D ar es Salaam . In that case the Court held at pages 8-9 that where it is shown that the application has been overtaken by events, the Court has to dismiss the application. In reply, the petitioner submitted that, in prayer no. 3, the petitioners are praying for an order to stay transfer of ownership of the property, subject of the party's dispute pending final disposal of arbitration between the petitioners and 1st

respondent. The petitioner asserted that, no any piece of evidence has been adduced by the respondents confirming that transfer of ownership has already taken place. That, sale of property is one thing and transfer of ownership of that property is another thing. Thus, transfer is done by the Ministry of Lands and is evidenced by endorsements made by the Registrar of Titles on the Certificate of Title. In view of the petitioner, since the alleged sale took place till to date, no any transfer has been done. That being the case, the objection is unfounded. To support their objection, the petitioner cited the case of Zein Mohamed Bahroon v. Re/i A ssets Holding Co. Ltd Misc. 307 of 2017 at page 8 (unreported). In rejoinder to the point that the suit is being overtaken by events, the respondents submitted that the sole purpose the TIB Development Bank (a Creditor) appointed receiver was to realize the outstanding debts owned by the 1st petitioner. This was done by disposing assets guaranteed under debenture agreement which the petitioners are now asking this Court to preserve. I have painstakingly labored to consider the arguments of both parties. It is undoubted from the petition under paragraph 21 (iii) of the petition that the petitioners are seeking for orders of preservation of the subject matter of the dispute be issued by this Court pending commencement and final disposal of

the arbitration. Indeed, under prayer No. 3 to the petition, the petitioners are seeking for orders that transfer of the 1st applicants farm No. 140/1/1 and farm No. 140/01/02 Chekereni Arumeru District, Arusha be stayed pending final disposal of arbitration between the applicants and the 1st respondent. 6 In the light of the above reliefs sought, the Court has to ask itself on the role of TIB in this matter. It is not in dispute that TIB was a creditor. The appointed receiver obligation was to realize the debt due owed by the petitioners. The role of recovering the debt was brought to finality at the conclusion of the auction. The auction is deemed to have been concluded when a certificate of sale over a right of occupancy comprised under (T. No. 44371. N.O Arusha Blooms Limited of P.

0. Box 6175 Arusha was issued by Kilindi and Company Limited certifying that TIB Development Bank Ltd was the purchaser of farm no 140/1/1 and No. 140/01/02. It is the finding of this Court that, with the afore said successful auction, the whole petition becomes of no use. The petitioners should have preferred this matter prior the auction or at least prior issuance of the certificate of sale. Hence, the fifth ground of objection is sustained with costs. Order accordingly. 31/10/2019 Ruling delivered and dated 31st October, 2019 in the presence of Judith Kyamba Advocate for the petitioners Grace Lupondo state attorney for the 1st respondent and Beatrice Mtembei for the 2nd and 3rd respondents.