trust bank tanzania ltd vs le marsh enterprises ltd 2 others 2004 tzhccomd 3 9 june 2004

trust bank tanzania ltd vs le marsh enterprises ltd 2 others 2004 tzhccomd 3 9 june 2004

The 1st defendant breached the loan agreement by failing to repay the principal and interest as stipulated. The 2nd and 3rd defendants, as guarantors, are jointly liable for the outstanding amounts, including interest and charges, as their liability is co-extensive with the principal debtor. The defendants' argument that the bank's failure to disburse the overdraft excused repayment was rejected, as the loan repayment was not contingent on the overdraft. The counterclaim for specific performance was deemed abandoned as it was not included in the amended defence.

Citation
trust bank tanzania ltd vs le marsh enterprises ltd 2 others 2004 tzhccomd 3 9 june 2004
Parties
Plaintiff: Trust Bank Tanzania Ltd; 1st Defendant: Le-Marsh Enterprises Ltd; 2nd Defendant: Joseph Mbui Magari; 3rd Defendant: Lawrence Macharia
Court
TZHCCOMD
Jurisdiction
Tanzania
Judgment Date
9 June 2004
Procedural Posture
Commercial Case / Final Judgment
Outcome
Judgment for the plaintiff
Legal Topics
Loan Agreements, Guarantee and Indemnity, Interest Calculation, Breach of Contract, Counterclaim Procedure
Source Language
English
Banking Law Contract Law Loan Agreements Guarantee and Indemnity Interest Calculation Breach of Contract Counterclaim Procedure

Case Brief

Summary, issues, holding and outcome

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Parties

Trust Bank Tanzania Ltd

Plaintiff

Le-Marsh Enterprises Ltd

1st Defendant

Joseph Mbui Magari

2nd Defendant

Lawrence Macharia

3rd Defendant

Procedural Posture

Commercial Case / Final Judgment

Legal Issues

  1. 1 Whether there was an agreement to extend loan and overdraft facilities and the terms thereof
  2. 2 Whether Guarantee and Indemnity Agreements were executed and their terms
  3. 3 Whether there was breach of the agreements by the defendants

Ratio Decidendi

The 1st defendant breached the loan agreement by failing to repay the principal and interest as stipulated. The 2nd and 3rd defendants, as guarantors, are jointly liable for the outstanding amounts, including interest and charges, as their liability is co-extensive with the principal debtor. The defendants' argument that the bank's failure to disburse the overdraft excused repayment was rejected, as the loan repayment was not contingent on the overdraft. The counterclaim for specific performance was deemed abandoned as it was not included in the amended defence.

Court Disposition

Judgment for the plaintiff

Orders

  • Defendants to pay the plaintiff TShs 45,230,040 as principal loan amount with interest at 28% per annum and penalty interest at 7% per annum up to 20.6.2000.
  • Defendants to pay further interest at 7% per annum on the decretal amount from 20.6.2000 until full satisfaction.